The emerging markets of India, China, and other Southeast Asian nations including Vietnam, Thailand, Malaysia, and Indonesia, mean that an ever-increasing number of companies are relocating in this region.
Here standing firm on the three pillars of a business-friendly environment and supportive government policies; a diverse talent pool with the right expertise; and access to fast-growing markets in and around; Singapore has the most conducive environment for companies looking to relocate and start a company.
It is indeed, as Singapore’s Economic Development Board calls the country – “the best home in Asia for your business”.
We detail the benefits Singapore provides to companies looking to head-quarter their Asian operations here.
Table of Contents:
Excellent global connectivity due to Singapore’s great strategic location
Singapore is home to the world’s top companies across all industries, in part, due to its location in the heart of Southeast Asia. Singapore’s strategic location – within a six-hour radius of any Southeast Asian country – means it is an ideal hub to access the region and its growing consumer market.
It is the 2nd most globally connected country, with over 7,400 flights to and from the Changi Airport weekly. Regularly ranked as the world’s best airport, it serves more than 100 airlines flying to about 100 countries and territories globally, along with hosting many leading logistics firms such as UPS and FedEx. Over 62 million passengers use the airport every year.
Additionally, Singapore’s sea-port infrastructure has been ranked the best in Asia for the past two decades. The city links to more than 600 ports globally, with 200 shipping lines passing through Singapore. Annually, more than 130,000 ships call at Singapore.
No wonder, in a worldwide survey of global freight forwarders and express carriers, the Logistics Performance Index – a benchmarking tool developed by the World Bank, rated Singapore as the top in Asia for logistics performance.
Singapore’s future-ready infrastructure
In telecommunication and information technology, the country’s mobile penetration rate is 159%. It is also a top submarine cable hub connected to 23 active subsea cables. Singapore will also roll out 5G networks in 2021, with 5G coverage expected to extend across at least half of Singapore by end of 2022.
Singapore also has one of the most reliable supplies of electricity in the world. Its power grid has an average interruption time of less than one minute per customer per year and is more reliable than most cities in the world such as Tokyo, London, and New York.
World’s most business-friendly ecosystem in Singapore
Singapore consistently aces World Bank’s Ease of Doing Business index due to its hassle-free business set-up processes. It is also rated as offering the best IP protection, infrastructure, and incentives in Asia by successive World Economic Forum’s Global Competitiveness Reports.
Strong investor confidence
According to Euromoney Country Risk, Country Risk Survey, 2019 Q3, Singapore is the least risky country for worldwide investment. Singapore receives more foreign direct investment (FDI) than most of the world’s developed economies, and more than 10 percent of the total FDI inflows to Asia are channeled here. With access to global capital and low levels of risk, businesses can be confident in the potential growth of their investments.
Digitally ready economy
Singapore’s Smart Nation drive harnesses advancements in digital technologies to create seamless, tech-driven experiences, all with one key objective: to enable the success of businesses in a digital world. To make it possible, the Government aims to invest US$ 1 billion in smart city projects every year.
According to the Economist Intelligence Unit, The Asian Digital Transformation Index 2018, Singapore is the best in Asia in the digital transformation environment. Juniper Research, Global Smart City Performance Index 2017, ranks it as the best-performing smart city in the world.
Related Read: How to simply start a Singapore company in 2021 »
Leading innovation centre in Asia
Consistently rated as one of the world’s most innovative cities, Singapore has built a vibrant ecosystem featuring global R&D labs for leading Fortune 500 companies, as well as over 150 venture capital funds, incubators, and accelerators. One can also find the Asia-Pacific headquarters of ‘unicorns’ such as Grab, Sea, Lazada, and Razer here.
Advanced manufacturing hotspot
With deep engineering and innovation capabilities, Singapore is the world’s fourth-largest exporter of high-tech products. Moreover, under the Research, Innovation and Enterprise 2020 plan, the government is investing more than S$3 billion over five years to further boost Singapore’s advanced manufacturing capabilities.
Quick business set-up
The Singapore Government has fully digitalised business regulations and processes so that one can start a business conveniently, even if one is not yet in Singapore. It takes 15 minutes to register a company in Singapore – the quickest in Southeast Asia; and one and a half-day to set up a business – 17x faster than the regional average. Also, importantly, the minimum issued capital needed to register a new local company is just $1.
Availability of funding
Singapore continues to be regarded as a triple-A-rated economy, and a politically stable location for business expansion.
The country hosts over 128 commercial banks, 31 merchant banks, and 604 capital markets services license holders in Singapore. Singapore also hosts over 150 venture capital funds, incubators, and accelerators. It has the world’s third-largest forex trading centre, Singapore Exchange (SGX).
The Singapore Government also supports a thriving start-up ecosystem. One of its initiatives is called Startup SG – a launchpad for entrepreneurs by providing them a platform to access local initiatives and connect to the global entrepreneurial network.
As a result of all this, over 3,000 start-ups are plugged into a global network of 300 investors in Singapore’s thriving start-up ecosystem.
Other initiatives of the Singapore Government include:
- $8.3 billion over three years to help the economic transformation and business growth
- $300 million funding for deep-tech startups
- Absorption of bank loan risk (up to 70%) for new companies (<5 years)
- Tailored assistance for large and high-growth companies from EDB and other agencies
Attractive tax framework and extensive trade agreements
The Singapore government has signed over 25 free trade agreements (FTAs) and over 70 comprehensive avoidance of double tax agreements (DTAs). These facilitate business and trading across borders. These are aimed at minimizing taxation barriers to trade, investment, technical know-how, and expertise.
Moreover, for cross-border disputes, businesses can rely on Singapore’s reputation as a world-class arbitration facility.
This, along with no capital gains and dividends tax, as well as very low withholding taxes, make Singapore the desired destination to register a company.
Singapore offers one of the world’s most attractive corporate tax structures in the world with a corporate tax rate of 17 percent.
Moreover, over the years, the Singapore Government has progressively relaxed the taxation policy on qualifying foreign-sourced remitted incomes. Singapore-based holding companies can repatriate dividends from their directly held foreign subsidiaries to Singapore free of Singapore tax.
Also, to encourage companies to relocate their headquarters to Singapore, the Economic Development Board offers regional headquarters (RHQ) and international headquarters (IHQ) incentives.
Best quality of life in Asia
Singapore is considered one of the safest countries in the world, with a transparent legal system, and a reliable police force supported by proactive citizens.
Some surveys notes:
- Singapore tops Mercer’s 21st Quality of Living Ranking for Asia 2019.
- Bloomberg, Health Care Efficiency Index, 2018, ranks it 2nd most efficient healthcare system in the world.
- HSBC, Expat Explorer Survey 2019, ranked Singapore as 1st in the world in school quality.
With hundreds of parks, nature reserves, mangroves, tidal flats, and coral reefs in Singapore, it is no concrete jungle. The Singapore Botanic Gardens, our first UNESCO Heritage Site, and the award-winning Gardens by the Bay are especially popular. 47% of Singapore’s area is covered in green spaces.
Singapore is also the least corrupt country in Asia where transparency is valued highly. This according to the IMD World Competitiveness Report of previous years.
High skilled local talent pool
Based on the Annual Report 2018-19 of the Singapore Tourism Board, Singapore has ranked the top city for international meetings for the 11th year in 2018. INSEAD’s Global Talent Competitiveness Index 2020 ranks it the world’s best in attracting talent for 7 years in a row.
Consistently rated as one of the world’s most competitive workforce, Singapore’s workforce is highly skilled and educated. More than 30 percent of our workforce hold a university degree, with another 15 percent having earned a diploma or professional qualification. The adult literacy rate in Singapore is 97.5%, and the population ranks first in Asia in terms of English proficiency.
The Singapore Government has also introduced initiatives such as SkillsFuture to help people upgrade their skills or learn new ones. TechSkills Accelerator (TeSA), a SkillsFuture initiative, provides various programmes to prepare workers for digital and tech roles.
In conclusion, Singapore enjoys a unique position in the global economy and plays a pivotal role as the business epicentre of Asia. At SCI, we are well apt to aid entrepreneurs opting for Singapore company set-up.
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