Top 7 Benefits of Starting a Business in Singapore
7 Benefits of Starting a Business in Singapore – Being acknowledged as the “Four Little Dragons of Asia”, Singapore is considered a dream destination for aspiring entrepreneurs globally. The rapid economic development, business-friendly regulatory environment, and relaxed compliance have transformed this nation into a viable business hub for diverse industries.
Today Singapore is home to 7000 multinational companies and over 6 lakh registered entities, reflecting its mettle in the global business arena. From E-commerce, advanced manufacturing, and IT to robotics, Singapore is witnessing formidable growth in diverse business verticals. This is a clear sign of potential growth from a business point of view. With that being said, let’s take a closer look at the top 7 benefits of starting a business in Singapore.
Business-oriented location
Owing to the close connectivity with Japan, China, and Indonesia, Singapore provides access to cross-border markets, enabling local and overseas businesses to boost their global presence.
Its ever-growing seaport is home to world-class logistic companies, including FedEx and UPS. Presently, Singapore sits in first position in the World Bank’s Logistics Performance Index.
Coming to seaport infrastructure, currently, Singapore has connectivity with around 600 ports across 120+ nations. The sea transport is supported by 200+ shipping lines, ensuring vast and uninterrupted connectivity. Besides, the port of Singapore witnesses 1.15 billion gross tonnes of trade every year, accounting for 20% of the world’s transshipment.
World-class infrastructure
From commercial buildings, subways, and airports to public parks, Singapore has done a commanding job in advancing its infrastructure. It’s world-class infrastructure and alluring urban settings attract millions of avid travelers every year.
Singapore puts extra emphasis on developing its technological capabilities and resources, making it a pioneer on digital and technological fronts.
Singapore is among the first nations in Asia that had aggressively adopted the IT revolution in the 80’s. This early adoption has helped the country to outrank every nation and become a pioneer in the technology realm.
Robust economy – 7 Benefits of Starting a Business in Singapore
Singapore has relaxed policies for foreign businesses seeking easy entrance and increased market presence.
Owing to robust governance, increasing reliance on technology, and an ever-growing service sector, the country has continued to generate ample jobs and keep inflation under control.
In addition to that, Singapore’s balance sheet has hardly encountered a negative deficit – thanks to ever-growing export rate and unmatched financial services.
Speaking more about numbers, Singapore has gross national savings equivalent to 50% of its GDP, and a whopping export figure of S$500 billion per annum.
Even the trade-to-GDP ratio of the country has managed to remain top-rated (336% in 2022) worldwide, giving a much-needed thrust to innovation, entrepreneurship, and wealth management.
Business-supportive tax system
Singapore’s tax structure favors diverse local and foreign businesses. Presently, the nation charges a corporate tax rate of 17% on business income, which is among the lowest in the world. Even the VAT rates are highly competitive when compared with other developed nations.
The capital gains and income generated by the foreign subsidies do not attract any taxes whatsoever, encouraging more overseas entities to join the forces in Singapore.
The indigenous entities aren’t isolated from taxation benefits either. Such entities have access to partial tax exemption courtesy to the tiered tax system for personal and corporate taxes. In terms of numbers, these benefits translate to a tax rate of 8.5% on income of up to S$300,000 per annum- a lucrative prospect from the profit standpoint.
Singapore has treaties with 62 nations for the prevention of double taxation and protection of overseas investment, which in turn, reinforces a trade-friendly environment.
Support for startups
7 Benefits of Starting a Business in Singapore – The Singapore government ensures a level playing field for local as well as overseas businesses. With ample funding avenues and opportunities to set up diverse ventures with zero hassles, Singapore is committed to facilitating a world-class environment for businesses of all types.
In the purview of the same, Singapore is running a slew of business-friendly initiatives that pave the foundation of sustainable and considerable growth. These include;
- Startup SG Tech,
- the Enterprise Development Grant
- EDB Singapore’s Innovation, R&D, and Capability Development
Apart from rendering underlying benefits, these initiatives aim to reduce labor costs, a potential barrier to the companies’ growth.
Similarly, there are some other schemes as well which primarily focus on amplifying the growth of the entities. These include;
- Global Trader Programme ‘GTP’,
- International Headquarters Programme ‘IHP’,
- Regional Headquarters Programme ‘RHP’).
Singapore has taken the startup ecosystem to the next level by instituting a tech community that is internationally recognized and is deemed to be on par with Silicon Valley on account of startup talent.
Ease of doing business – 7 Benefits of Starting a Business in Singapore
Singapore has continued to own the title of a triple-A-rated economy for the past few years and it is evident in the World Bank’s Ease of Doing Business Report. It is deemed a primary location for global endeavors- thanks to increased emphasis on international trade, investor protection, construction permits, and insolvency resolution.
Presently, Singapore is home to 128 commercial banks, 31 merchant banks, and 600+ capital market service license holders. These avenues are startup-friendly and promise to facilitate capital with zero hassles.
The startup ecosystem is fuelled by relaxed economic and regulatory policies, which obliterate complicated legalities and reinforce a risk-averse trading environment.
The ease of doing business, relaxed taxation policies, level field playing, seamless access to a technologically robust environment, and presence of investment-friendly policies have transformed Singapore into what it is today.
Zero hassles in incorporation
Owing to the absence of a bureaucratic framework, Singapore ensures a seamless incorporation journey for new ventures irrespective of their nationality. Compliance considerations for forming a venture in Singapore include one shareholder, one director, one local company secretary, a local address, and a share capital of just $1.
Singapore’s Accounting and Corporate Regulatory Authority (ACRA) hardly takes 72 hours to register an entity. However, this timeline may vary depending on the structure being chosen by the applicant.
Legalizing a business in Singapore involves three fundamental steps: Selecting an apt business structure, forming an entity (which entails a Company Constitution and signed Consent to Act as Director and Consent to Act as Company Secretary), and opening a corporate bank account.
While various structures are available for registration, ACRA witnesses a high influx of applications concerning private limited companies owing to their corporate flexibility and minimal compliances. Since such a structure provides for limited liability, shareholders’ assets are safe from the company’s incurred losses and debts. Notably, the shareholders’ contribution is limited to their extent of shareholding.
Conclusion
Singapore’s presence in the global business arena is second to none. Its ever-thriving economy and robust governance are paving a strong foundation for businesses worldwide.
If you are gearing up to leverage this unprecedented opportunity to become a global player, you must know every legality and have a strong grasp of compliance. Having said that, if you are not committed to going this far and still want to get started, let Adviso’s professionals help you out.
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