Singapore is strategically located at the heart of Southeast Asia and well placed to serve the fast-growing markets for Asia-Pacific region, and as well as the rest of the world. Its strategic location and well-developed infrastructure enable easy access to global markets.
In this article, you will find the information about the benefit of setting up a firm in Singapore. Before getting into detailed information, you should know the overview of Singapore’s business situation!
Overview of Singapore’s Business
Singapore Exchange (SGX) has the world-class connectivity that gives traders greater reach, increases the speed of trading, and provides better security. It definitely keeps SGX at the forefront in exchanges globally, and also attracts both regional and international issuers.
Furthermore, Singapore has a strong position as Asia’s risk management centre. Its global currency and derivative trading hub could enable international investors and traders to manage their investment, as well as trading portfolios efficiently from a single location.
It makes Singapore consistently ranked as the world’s most active trading center, beside London, New York, and Tokyo.
Moreover, there are some big industries in Singapore, and the foreign entrepreneurs have their eyes on them. The industries are, financial services, electronics, chemicals, oil drilling equipment, petroleum refining, ship repair, tourism, manufacturing, and many more.
The Gross Domestic Product (GDP) in Singapore was worth US$382 billion in 2019. The GDP value of Singapore represented 0.32% of the world economy. The information is based on the official data from the World Bank and Projections from Trading Economics.
Not only that, but the Venture Capital Industry in the country also remains robust. In 2018, the number of deals grew to more than 220 deals, with a net worth close to US$4.2 billion. Thus, the government aimed to bring an additional S$200 million of additional funding in 2019 which was to add to the S$1.3 billion that has been made available to the local small and medium enterprises.
Additionally, the Southeast Asian Venture Capital industry continues to develop strongly, while Singapore has a majority of the market, and it has become a more attractive hotspot for investments from 2019 onwards.
Singapore has a very pro-business environment, and it makes no surprises if many foreign investors want to set businesses there. However, potential investors need to be aware of additional regulations and permits that apply to non-Singapore citizens. All businesses of any sort must be registered with the Accounting and Corporate Regulatory Authority (ACRA) before commencing business.
Hence, any company wishing to do business in the country should consult the relevant regulatory body to establish whether additional licenses are necessary. In addition, the most common business structures in Singapore are sole-proprietorship, partnership, and company incorporation.
The employment rate of Singapore citizens rose from 60% to 63.6%, between the years 2009 to 2019. According to an occasional paper released by the Manpower Research and Statistics Department, Singaporeans also experienced income growth over the same period, while more were working as professionals, managers, executives, and technicians.
It proves Singapore has skilled labor who are highly trained, educated, or experienced for the workforce, and can compete more on specialized jobs.
In the next part, you will be given information about the benefit of having a business in the country. So, you can imagine what you will get when you enter the Singaporean market for your business.
Benefits of Setting Up a Firm in Singapore
The government of Singapore provides several incentives to promote entrepreneurs there. The government collaborates with the Inland Revenue Authority of Singapore (IRAS) which is the tax authority of Singapore, to implement tax reduction schemes which targeted at businesses, especially startups in Singapore.
The eligible startups in Singapore will be exempted from any tax on the first S$100.000 of the normal chargeable income. In addition, the company will be exempted up to 50% of tax on the next S$200.000 normal chargeable income.
This exemption is applicable to the startup for its first three years, and as a result of these benefits, the effective tax rate of the startup is drastically reduced in the first three years of their operation.
Apart from tax incentives, Singapore is also well known for the ease of incorporating a company. Yet, it is fast and free from unnecessary red-tape, also ranked as one of the best places in the world for doing business.
The requirements for incorporating a company are straightforward and the procedure for doing so is simple, and it even takes less than a day to incorporate a new company.
To add more benefits of having a business, Singapore allows a foreigner to own 100% of the stock of a Singapore incorporated company. It enables you to start a company with the type of capital structure that you desire and distribute its ownership to fit your investment needs.
It is no wonder to us, if Singapore has a productive workforce, as Singaporeans have a reputation for being hardworking, rule-following, productive and highly educated. Singapore’s liberal immigration policy also brings global talent to the country.
As a result, the country makes it easy for a foreign professional to obtain and maintain work visas or permanent residence (PR) status. In fact, nearly a third of the country’s workforce is from abroad, and companies enjoy an endless supply of both domestic and foreign high-skilled labor.
Singapore also has a strategic location in Southeast Asia, and its extensive connectivity to regional and global markets has connected Asia to the world and the world to Asia. It also enables businesses to access the region’s rapidly expanding markets, and with this benefit, you can set up your business there easily.
Singapore is having unparalleled connectivity to passengers and cargoes, and it makes an efficient location to access the Asian economies. It is one of the world’s top transportation hubs for sea and air cargo. Singapore’s container ports are the busiest in the world, and meanwhile, Changi International Airport is linked to 300 cities in 70 countries. It is no surprise for foreign entrepreneurs, the country has become a prime location in the market for global players.
As quoted from the local site, the country has virtually no corruption, because most government officials are very well paid, and there will be harsh punishments for corruption. Keep it in mind, if you incorporate a company there, you can be assured that you are not going to be at the mercy of corruption because your business will succeed or fail on its own integrity.
In conclusion, if you dream to set up a business in Singapore, it is better for you to make it happen right now. As you already know Singapore’s business situation, yet the benefits of having a business there, therefore you should start thinking about what business you should set up, and prepare everything to get a successful business in the future!