Singapore has consistently been ranked by numerous international economic and financial organisations as the best country, or among the top countries to do business.
These rankings take into consideration factors such as business friendliness, efficiency and openness of the economy, bureaucracy, corruption, IP protection, infrastructure and investment potential.
Globally, Singapore is known as a sea and air transportation and cargo hub. It has a vibrant business climate that attracts investors and start-ups across myriad sectors.
Within Asia, this thriving cosmopolitan city-state is a leading financial hub. It boasts a fast-growing economy, socio-political stability and well-developed infrastructure. Singapore has also been lauded for being a safe place with world-class transportation, healthcare and education systems.
Here are some of the reasons why you should incorporate your company in Singapore.
Singapore is a free market economy with a healthy financial position. Its economy grew by 14.7% year-on-year in Q2 2021, according to the latest statistics released by the Ministry of Trade and Industry (MTI). It achieved a per capita GDP of $82,503 in 20201 and has managed to maintain a low overall unemployment rate of 2.7% as of Q2 20212, as well as a low inflation rate.
These conditions contribute to a robust economy that provides a conducive environment for doing business.
Favourable tax system
To enhance Singapore’s attractiveness as a business hub and to boost Singapore’s services export, tax exemption may be granted to certain foreign-sourced income if qualifying conditions are met3.
Start-ups and new companies enjoy substantial tax exemptions. For the first three Years of Assessment (YAs), start-ups are given 75% exemption on the first S$100,000 of normal chargeable income. A further 50% exemption is given on the next S$100,000 of normal chargeable income4.
The corporate tax rate is capped at 17%, one of the world’s lowest.
The sale of a business will not incur any capital gains tax. Neither will the distribution of dividends to shareholders.
Singapore has established Avoidance of Double Taxation Agreements (DTAs), limited treaties and Exchange of Information (EOI) Agreements5 with over 100 countries. Business owners are relieved of double taxation of income that is earned in a jurisdiction in which they are not a resident.
Effective since YA 2009, a Unilateral Tax Credit (UTC)6 will be granted on all foreign-sourced income received in Singapore by Singapore tax residents from jurisdictions that do not have DTAs with Singapore.
Companies may claim Foreign Tax Credit (FTC)7 for tax paid in a foreign jurisdiction against the Singapore tax payable on the same income. With all these schemes in place, double taxation is highly unlikely.
Complete foreign ownership
Singapore allows foreigners 100% share ownership of a company incorporated in Singapore without the need for any local partners or shareholders. This puts you in full control of your company.
No restrictions on the movement of foreign currency
Singapore does not impose restrictions on the amount of capital investment that foreign investors can bring into Singapore from their home countries. There are also no restrictions on the repatriation of profits.
The ease of moving funds in and out of Singapore is one of the factors that makes Singapore an attractive and easy place for foreign investors to set up businesses.
Less red tape
You can incorporate a company in Singapore within hours, thanks to an efficient and bureaucracy-free system. The regulatory framework is robust and transparent, but the requirements and procedures are straightforward. Annual compliance obligations are also not unduly complicated.
With MyCo, the process is even more hassle-free and can be done without leaving your desk.
Incentives and support for start-ups
The Singapore government offers start-ups, both local and foreign-owned, a slew of tax incentives, subsidies, grants, loans and other schemes8 to help them along during their infancy.
These include infrastructural support for start-ups, support for talent sourcing, start-up capital support for first-time entrepreneurs and co-investment opportunities.
Many of these are administered through government-led organisations. One example is SEEDS Capital9, an investment arm of Enterprise Singapore, which supports the growth of promising Singapore-based start-ups.
Some of these are in the form of loans, such as the Enterprise Financing Scheme (EFS)10 that makes financing more accessible to start-ups throughout various stages of growth.
Local and global pool of talent
With limited natural resources, Singapore has always placed a great emphasis on its human resources through education, training, upskilling, retraining and lifelong learning. These ensure that the local workforce is well-equipped to contribute meaningfully to their respective industries. Apart from possessing a high proficiency in English, Singaporeans are also known for being highly-motivated, efficient and productive.
Singapore also attracts a large number of foreign talents who choose to work in Singapore. This is a boost to the calibre and diversity of its human resources.
Connectivity to the region and beyond
Located at the southern tip of the Malay Peninsula, Singapore is home to the world’s busiest transhipment sea port, as well as one of Asia’s largest cargo airports.
With 200 shipping lines offering connections to 600 ports in some 123 countries, Singapore is ranked by the World Bank as Asia’s top logistics hub since 200711. Its port handles one-seventh of the world’s container transhipment- the most for any hub in the world. Its airport handles 85 million passengers and three million tonnes of cargo annually.
Singapore also boasts Asia’s most extensive network of Free Trade Areas (FTA)11 that covers 60% of the world’s GDP.
These factors make Singapore the ideal place to base a business with a global reach.
Singapore’s developed network of road and public transport systems, built, digital and R&D infrastructures improve connectivity and productivity and provide a conducive business environment.
Political stability and reputable governance
Singapore is known for its reputable government that upholds the rule of law with impartiality. Corrupt practices are not tolerated and all business transactions are carried out following a set of clear and above-board regulatory guidelines.
Such an environment makes doing business a more transparent process. It also sends the right signals to your business partners and associates.
Incorporate your company with MyCo today. We have your business needs covered.
1 SingStat.Gov.sg – https://www.singstat.gov.sg/modules/infographics/economyf $82,503 in 2020
2 Stats.mom.gov.sg – https://stats.mom.gov.sg/Pages/Unemployment-Summary-Table.aspx
3 IRAS.gov.sg – https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Companies-Receiving-Foreign-Income/Tax-Exemption-of-Foreign-Sourced-Income/
4 IRAS.gov.sg -https://www.iras.gov.sg/irashome/Businesses/Companies/Learning-the-basics-of-Corporate-Income-Tax/Common-Tax-Reliefs-That-Help-Reduce-The-Tax-Bills/
5 IRAS.gov.sg – https://www.iras.gov.sg/irashome/Quick-Links/International-Tax/List-of-DTAs–limited-treaties-and-EOI-arrangements/
6 IRAS.gov.sg -https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Claiming-Reliefs/Foreign-Tax-Credit/
7 IRAS.gov.sg -https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Claiming-Reliefs/Foreign-Tax-Credit/
8 Startups.gov.sg – https://www.startupsg.gov.sg/programmes/
9 Enterprisesg.gov.sg – https://www.enterprisesg.gov.sg/financial-assistance/investments/investments/seeds-capital/overview
10 Enterprisesg.gov.sg – https://www.enterprisesg.gov.sg/financial-assistance/loans-and-insurance/loans-and-insurance/enterprise-financing-scheme/overview
11 EDB.gov.sg – https://www.edb.gov.sg/en/our-industries/logistics-and-supply-chain-management.html