- October 6, 2022
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Benefits of Incorporating Business in Singapore
Numerous organisations that track the business friendliness of global nations consistently rank Singapore at top for the ease of starting new businesses in Singapore. A robust economy, attractive tax system, double taxation prevention, 100 percent foreign ownership, ease of registration and operation, entrepreneurship support, productive workforce, beneficial location, great infrastructure, rule of law, global workforce and professionalism are some favourable factors making Singapore a global business hub.
This article examines some of the key factors that make Singapore an attractive place to start and run a business for both local and foreign entrepreneurs. Numerous elements make Singapore a very attractive place to register a new company. Let’s take a closer look.
Singapore has a well-developed free market economy, based on trade, finance and manufacturing. The island nation actively invests capital in foreign markets. The state uses its good financial position wisely. That is, it finances grant programs for housing, education, transportation and health care. All of these make Singapore a very robust and well-managed economy. For a small country with limited natural resources, such a strong economy is a testament to the wisdom and planning of its founding leaders.
Attractive Tax System
Singapore has one of the simplest and most affordable tax systems in the world. Singapore does not charge taxes on capital gains or dividends received from businesses. This is a particularly attractive country for entrepreneurs looking to register and build new businesses. Singapore uses a tiered tax system for both individual and corporate taxes. New businesses receive significant tax relief during the first three years of operation. The corporate tax rate is up to 17%.
Double Taxation Prevention
Singapore has an extensive Double Taxation Agreement (DTA) network with more than 50 countries. This agreement is designed to ensure that economic transactions between Singapore and the treaty countries are not subject to double taxation. Singapore also offers a Unilateral Tax Credit (UTC) for countries that do not have a double tax treaty. Therefore, Singapore resident companies are less likely to experience double taxation.
100% Foreign Ownership
Singapore allows foreigners to own 100% of shares in Singapore registered companies. No local partners or shareholders are required. This allows you to create a company with the desired capital structure and assign ownership according to your investment requirements. There is also no limit on the amount of capital you can bring from your home country to invest in a Singaporean company.
Easy to Register and Operate
Singapore has one of the most efficient and bureaucratic regulatory environments in the world. For the ninth year in a row, Singapore has been ranked number one in the World Bank’s Ease of Doing Rankings. The requirements for registering a company are simple and the registration process is straightforward. In most cases, it takes less than a day to register a new company.
The Singaporean government has a very favourable policy for growth and innovation. It provides various subsidies, tax benefits and support systems for startups. In some preferred sectors, the government subsidises labour costs for new businesses. These benefits are available to both domestic and foreign companies. Over the past decade, Singapore has fostered a venture capital community. It is currently the leading venture capital fund source in Asia. Registering in Singapore and doing business can benefit from these funding sources.
Chances are you’ve read about Singapore’s excellent education system and its students score high on global standards of comparison. These students eventually become part of Singapore’s workforce, applying the same excellence to their work. Singaporeans are known for being hard-working, disciplined, productive and highly educated. In addition, Singapore’s liberal immigration policy has attracted talent to Singapore from all over the world. Singapore makes it easy for foreign professionals to obtain and maintain a work visa or Permanent Residence (PR) qualification.
Due to its central location in Southeast Asia, Singapore is the physical and metaphorical gateway to the continent of 3 billion people. Some of the world’s most important economies (China, India, Malaysia and Australia) are just a short flight away. The port of Singapore is one of the busiest ports in the world and is classified as a major international maritime hub. Singapore Changi Airport is a world-class airport serving approximately 20 million passengers annually and providing convenient flights to almost every major city in the world.
Most newcomers to Singapore are overwhelmed by Singapore’s first-class infrastructure. This includes the country’s airports, highway systems, subways, internet infrastructure, commercial buildings, museums, hotels and public parks. Most of the infrastructure has been developed over the past decade, so it is very modern and new. This infrastructure not only creates a pleasant working environment, but also improves business productivity.
Rule of Law
Singapore recruits the “best and smartest” citizens for its civil servants and pays well to avoid the temptations of corruption. Most entrepreneurs shudder at the thought of dealing with dishonest government officials in Asian countries where bribing is the only way to get things done. Singapore is the exact opposite. If misconduct is found, Singapore will impose severe penalties for such corruption. As a result of this policy, the country is now considered one of the most corruption-free countries in the world. In addition, modern regulatory frameworks reliably protect intellectual property.
English Speaking Workforce
Almost every young or average Singaporean speaks English. Singaporeans are among some of the most productive and well-trained workers in the world. The country’s excellent education system produces global citizens, a step ahead of other countries in terms of wages and salaries.
Singapore is perceived as a disciplined, well-functioning, modern and honest country. This positive perception of the Singaporean brand is also having an impact on business. By placing your business in Singapore, you are demonstrating professionalism and quality to your customers, partners and suppliers. Their first impression that you give of your business is that of a professional, competent, honest and well-managed company.
Singapore is a developed Asian nation providing a highly favourable business environment for aspiring entrepreneurs. A solid economy, strategic geography, attractive tax system and efficient government make it a very attractive place to start a new business. For these reasons, thousands of domestic and foreign entrepreneurs choose Singapore for their business establishments.