Why create your company in Singapore ?!
Well, the emerging economies of India, China and other South-east Asian nations have ensured that an increasing number of companies are moving in this region to take advantage of large domestic markets, cheap labour availability and booming infrastructure. And standing firm on the pillars of low corporate tax rates, integrity, quality, reliability, high productivity, rule of law, availability of skilled manpower, and enforcement of intellectual property rights, the city-state of Singapore provides the most conducive environment for companies looking to expand in the region. There are many reasons why this is the case. In this post we look at just a few of them which make this country the easiest place to do business in and why consider Singapore as your new best place to do business.
Low Corporate Tax Rates
The Singapore government has signed over 21 free trade agreements (FTAs) with 27 economies and 76 comprehensive avoidance of double tax agreements (DTAs). These agreements facilitate business and trading across borders and are aimed at minimising tax barriers to the flows of trade, investment, technical know-how and expertise. This, along with absence of capital gains and dividends tax, as well as lower withholding taxes, make Singapore the desired destination to incorporate a company.
Singapore also offers one of the most attractive corporate tax structures in the world with the highest corporate tax rate on taxable income being 17 percent. Even though its marginal rate is the third lowest in the world, the effective rate, taking into account the various schemes, is even lower. Overall, Singapore has a progressive tax framework, which is based on territorial policy. This means that individuals and companies are taxed on incomes generated in the city-state, and on foreign sourced income remitted into the country.
Since 2003, in a bid to increase the country’s attractiveness as a wealth management hub, the government has progressively relaxed the taxation policy on qualifying foreign sourced remitted income. Singapore-based holding companies or headquarters can repatriate dividends from their directly-held foreign subsidiaries to Singapore free of Singapore tax. Those whose foreign subsidiaries are engaged in substantive economic activities but are unable to meet the qualifying conditions for this tax exemption may apply for a specific exemption.
Also, to encourage multinational companies to relocate their headquarters to Singapore, the Economic Development Board offers regional headquarters (RHQ) and international headquarters (IHQ) incentives. Most importantly, the Singapore personal tax structure is progressive. Marginal rates range from zero to 22 percent and the framework allows residents to tap various reliefs, thereby lowering their effective payments.
Related article: What are the corporate taxes in Singapore?
High degree of personal safety and benefit from a strong legal system
Singapore has the most stable political environment in South-east Asia, offering entrepreneurs and investors a strong sense of security and comfort. The rich variety of dining and entertainment options, world-class education systems, and quality health-care providers in Asia provide an ideal location to raise a family. Moreover, in the event of cross-border disputes, businesses can rely on Singapore’s reputation as a world-class arbitration facility.
Additionally, in its Global Competitiveness Report 2015 – 2016, the World Economic Forum ranked Singapore as having the best IP protection in Asia. The same report recognizes Singapore as a country with sound political infrastructure and policy-making procedures; leading to its ranking as the most transparent country in Asia that enjoys a stable business environment. It is also the least corrupt country in the Asia region, where transparency is valued highly. This is according to the IMD World Competitiveness Report 2015.
Efficient All-round Governance
Both the general government policies and the country’s anti-corruption laws are the best-enforced in the world, which tremendously aids the businesses operating here. You will also find this country unencumbered by red tape and endless layers of bureaucracy, which is a major factor contributing to the ease of doing business. Those who do find themselves entangled in legal issues have access to an impartial judiciary system which is quick to resolve matters.
On top of a great strategic location, Singapore has the best-ranked infrastructure in the world and is also among the safest countries to be in. The country is well-connected to all parts of the world with its Changi international airport among the busiest globally. Gaining a Singapore visa is also a straightforward process. Wherever in the world you may be based, it’s only a matter of you getting the right papers and hopping onto a plane to Singapore to explore it. Once you are in Singapore, you’ll find Singapore has got everything you’d want in a world-class city, including excellent telecommunication facilities and internet connectivity.
Competitive Labour Force
It’s not just the country and its policies that rank so high when it comes to aiding business, Singapore also has the luxury of hosting a highly skilled and the most competitive labour force in the world. So whatever line of business you are in, you can rest assured that you will have access to a great pool of workforce to support you along the way. Due to its multi-ethnic and cosmopolitan nature, you will not find it difficult to feel at home there regardless of your background. Singaporeans pride themselves on their tolerance towards each others’ cultural sensibilities, and foreigners have no problem blending in with the locals.
There is no one thing that singles out this vibrant and dynamic country as a highly preferred investment place – all of the above mentioned factors together contribute to Singapore’s continuing charm as a top business destination. And we have only scratched the surface with this post; Singapore offers a lot more. So, if you’ve been scouting for a new place to set up shop, we strongly recommend that you give Singapore some serious thought.