Starting Your Business in Singapore
Singapore is an island, a city, and a state all in one. Due to its highly developed economy and educated workforce, Singapore is a very attractive option for many businesses. Businesses may reach the constantly increasing markets in the region thanks to Singapore’s advantageous location in the centre of Asia. Due to its strong connections to local and international markets, Singapore has established itself as the key hub for connecting Asia and the rest of the globe.
Singapore has significant linguistic, cultural, and business ties to numerous Asian markets as one of the region’s historic trading hubs. Additionally, Singapore supports the international business community in Asia thanks to its linkages to other Asian cultures and languages, a highly skilled workforce, and an openness to the best global talent.
Starting a new business or moving an existing one to a new market that offers exciting prospects and new opportunities can be daunting. However, if you’re considering Singapore as the place to host your business, you might be surprised at the superpowers that come along with it. In this blog, we will discuss the advantages of company registration in Singapore, how to register your business in Singapore and why doing business in Singapore opens the Gateway to all South East Asian markets.
- Starting a Business in Singapore
- Stats and Figures
- The Hub of The ASEAN Wheel
- The South-East Asian Economic Powerhouse
- Trading in Singapore
- The Connecting Hub
- The Wheel of South Asian Economies
- Benefits of Doing Business in Singapore
- A Vibrant Economy
- Tax Advantages
- Foreign Ownership of Businesses
- Qualified and Competent Workforce
- Minimal Corruption
- Strategic Location and Effortless Market Access
Starting a Business in Singapore
Stats and Figures
More than 4,000 multinational corporations have their regional headquarters in Asia located in Singapore. Many businesses and start-ups who wish to invest in the area make opening a subsidiary in Singapore their first pick.
Singapore, which had previously held the top spot on the ranking for several years, was ranked by the World Bank as the second-best nation in the world for conducting business in 2020.
Singapore was ranked as the world’s most globally competitive nation by the World Economic Forum in 2019. In addition, from 2015 to 2019, The Economist’s Intelligence Unit ranked Singapore top worldwide in this area.
The Hub of The ASEAN Wheel
The South-East Asian Economic Powerhouse
With a fast-expanding middle class and a combined consumer market of 628 million people, ASEAN has the third largest economy in Asia.
The goal of the ASEAN Economic Community (AEC), established in 2015, is to combine the economies of 10 countries into a single market. It is believed to strengthen ASEAN’s position as a global economic force. By 2030, ASEAN is expected to create a borderless economic community with an OECD-equivalent standard of living for its citizens once the AEC is fully operational.
One of the first signatories to the ASEAN Economic Community in Singapore. The nation-state is a vital entry point for SMEs and MNCs looking to establish or strengthen their position in the ASEAN region due to its longstanding reputation for economic stability and a business-friendly climate.
Trading in Singapore
It is commonly known that Singapore is a trade-friendly nation; it has significant commercial ties with the United States and the European Union, as well as its ASEAN neighbours Malaysia, Indonesia, Vietnam, and Thailand. A significant signatory to AFTA and other pan-ASEAN FTAs, Singapore also offers first-rate infrastructure facilities and connectivity for trade facilitation.
The Connecting Hub
The geographic advantage of Singapore within ASEAN is that it is situated at the tip of the Malay Peninsula, where major global trade and maritime routes converge, and is only a few hours flight from other ASEAN nations. As a result, Singapore’s connectivity-based services have improved its travel, logistics, and shipping offerings thanks to its advantageous location.
The Changi Airport in Singapore operates 7,200 flights every week to 400 destinations in more than 100 countries, including the major cities of all 10 ASEAN members. Additionally, the airport includes a designated 24-hour Free Trade Zone that can assist businesses needing air freight services with transhipment cargo while minimising the need for customs formalities.
More than 140 multinational shipping organisations in the container, bulk, tanker, offshore, and liquefied natural gas sectors are based in the Port of Singapore. One of the busiest ports in the world, the port handled 626.2 million tonnes of cargo in 2017 with a throughput of 33.7 million twenty-foot equivalent units (TEU) containers.
The Wheel of South Asian Economies
MNCs like Unilever have already taken advantage of Singapore’s openness to trade to establish a regional office and a global supply chain hub while also constructing food and consumer care processing facilities in Thailand and new business ventures in Myanmar. The trained local workforce in Singapore and the regional workforce that has congregated there are useful to MNCs establishing a regional presence there to expand into other ASEAN countries. MNCs often seek out local partners to assist them in breaking into the Singaporean and ASEAN markets if they plan to utilise Singapore as a platform for establishing their ASEAN footprint.
The connectivity of Singapore to South-East Asian Nations with highly skilled workforces is one of its biggest strengths. The Singapore government actively ensures the quality and competence of the local workforce and updates their skills required in ever-evolving job functions. Singapore’s appeal to foreign professionals from all over the world also helps augment its talent pool. Employment visas for foreign professionals are comparatively more abundant in Singapore than in other ASEAN countries. An example of this strong connectivity is Malaysia, where over 400000 people work and live in Singapore. In this way, Singapore has established itself as the hub of the wheel of South-East Asian Economies.
Benefits of Doing Business in Singapore
A Vibrant Economy
In addition to having a prosperous free-market economy, Singapore also bases most of its economic growth on commerce, industry, and banking. About 80% of the eligible workforce is employed in the services sector, which contributes 75% of the nation’s GDP.
Both the unemployment and inflation rates are low in Singapore. Additionally, it has no foreign public debt and is now in surplus. Moreover, the government makes wise foreign investments and offers its citizens housing, transportation, education, and health incentives. These all point to a healthy and stable economy.
There is no tax on dividends or capital gains from a firm in Singapore, which has one of Asia’s friendliest tax systems. Both corporate and individual taxes are applied in a graduated manner in this nation. New enterprises receive significant tax breaks for the first three years, which reduce their tax obligations to 0% for the first $100,000 in revenue. Moreover, corporation taxes are restricted at a rate of 17%. Additionally, the nation has DTAs in place with more than 50 other countries. Registration for tax with the Inland Revenue Authority of Singapore (IRAS) is also automatically generated when the annual taxable turnover exceeds a prescribed limit using the same online forms used in the incorporation.
Foreign Ownership of Businesses
Companies and business branches are frequently required to have a predetermined number of local shareholders. Through this method, the host nation gains some influence over the business operations as well as a small portion of its profits.
However, a company incorporated in Singapore may have 100% foreign ownership. Due to the possibility of maintaining complete ownership and control over their new operations, this option makes Singapore an alluring location for business expansion for many multinational corporations.
Qualified and Competent Workforce
Singapore’s excellent educational system is well-known around the world. Therefore, it is not surprising that this nation has one of the most skilled labour pools in the world. Along with their education and technical proficiency, Singaporeans are renowned for their diligence and adherence to the law. Additionally, the welcoming immigration policies draw a lot of talent from across the world, which you may hire for your company by collaborating with an established recruitment firm. The fact that this workforce speaks English as its primary language makes communicating with most overseas HQs simple.
Due to the frequency of corruption, businessmen have their fair share of reservations when it comes to conducting business in Asian countries. However, Singapore has strict Anti-corruption laws, and bribery is often not viable to sway the local officials as they get paid a handsome salary for maintaining their integrity. As a business owner, you are less likely to be burdened by pointless bureaucracy or at the mercy of corrupt officials. The majority of Singaporeans are devoted upholders of the law.
Strategic Location and Effortless Market Access
Your company will have simple access to many other Asian markets if you conduct business in Singapore. Since Singapore sits in the middle of South-East Asia, several of the continent’s biggest economies, such as Australia, China, Malaysia, and India, are easily accessible by plane.
Around 36 million shipping containers pass through Singapore’s port each year, making it one of the busiest in the world. Thanks to Singapore’s location and shipping and travel capabilities, you can readily obtain resources, transfer your goods promptly to their final location, and support the strong relationships on which your firm depends.
Registering Your Business in Singapore
The authority regulating the registration of companies in Singapore is known as the Accounting and Corporate Regulatory Authority(ACRA). It also regulates the Public Accountants and Corporate Service Providers in Singapore.
Incorporation is implemented through an electronic filing system and web portal called Bizfile+. The platform provides a business facilitation service to the customers at the point of registration. The entire process has to be done through a registered filing agent.
The services include reserving a domain name, registration for goods and services tax, subscribing for e-newsletters, registration for e-service alerts on government procurement opportunities, activating customs accounts and applying for a corporate bank account.
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