Why Singapore?

Today most entrepreneurs choose Singapore as their preferred jurisdiction for business setup and expansion for three primary reasons:

1. Ease of doing business in Singapore;
2. Singapore taxes; and
3. Quality of life in Singapore.

Here is quick look as the three factors:

Ease of doing business in Singapore

Singapore is ranked #1 on the ‘World’s Easiest Place toDo Business’ list in the World Bank’s Doing Business Report, 2012. Singapore company incorporation can be completed in a day's time with minimal formalities. There is no red-tape or bureaucracy involved. Singapore's immigration policy is open and liberal facilitating  relocation of foreign company owners and foreign professional staff. Talented human resource capital is readily available. Business infrastructure is world-class.

Singapore taxes

Singapore's tax system is highly attractive owing to its low tax rates and tax incentives.  There is no dividend tax, no capital gains tax, and no estate duty. Start-ups can benefit from tax exemptions. Companies can benefit from industry-specific tax incentives and an extensive tax treaty network. Furthermore, Singapore follows a territorial system of taxation and implements a single-tier tax system.

Quality of life

Quality of life in Singapore is comparable to Western nations. The country is safe, environment friendly and cosmopolitan. Healthcare, education and housing are excellent. English is widely spoken and most expats find it easy to relocate to Singapore and settle down quite easily.

Singapore is highly ranked on most business and international country surveys. Here are some of Singapore's rankings in recent international indices and surveys.

If one were to take into account every factor that matters to businesses, Singapore is possibly the only jurisdiction that scores high on all parameters making it the most business friendly jurisdiction in the world. Briefly, here are some of the reasons why you should consider Singapore over other countries as your preferred destination for business setup and expansion.

1. Singapore presents an optimal business environment for entrepreneurs and investors. A Singapore company can be easily incorporated within a day's time without the need to be physically present at the time of incorporation. Please refer to our Singapore Company Formation guide for details.
2. Singapore's tax system is characterized by low tax rates and tax incentives. The government has taken special efforts to keep the tax system simple and business friendly. Please refer to our Singapore Tax System guide for details.
3. The political climate in Singapore is stable and conducive for business operations. The government is pro-business and visionary. Singapore authorities have been successful in cutting down red-tape and corruption that is almost non-existent in the country.
4. Singapore's workforce is formidable comprising of the world's best talent as a result of an open and liberal immigration policy. Foreign entrepreneurs and foreign professional staff find it easy to relocate to Singapore for running their business, thanks to innovative work permit schemes that facilitate speedy relocation. Please refer to Singapore Immigration Options for details.
5. Singapore provides an excellent quality of life to its residents. Foreign entrepreneurs find it easy to settle down in Singapore, if they decide to relocate to the country permanently. Refer to our Living in Singapore guide for details.

Most global entrepreneurs and businessmen consider Singapore an ideal business hub in the Asian region. Here are Mr. Gautam Banerjee's - Executive Chairman of PricewaterhouseCoopers Singapore - view's on what makes Singapore such a great place to live, study, work and play in.

Both Singapore and Hong Kong are excellent locations for conducting business in Asia. Although each jurisdiction has its own set of advantages, Singapore retains an edge over Hong Kong in certain aspects.

Tax: A popular notion held by most entrepreneurs is that Hong Kong's corporate tax rate of 16.5% is lower than Singapore's corporate income tax rate of 17%. However, if one were to look beyond the surface and examine the effective corporate tax rate, it becomes evident that Singapore imposes a lighter tax burden. The effective corporate tax rate for Singapore companies is approximately 8.5% for profits upto S$300,000 and 17% for profits above S$300,000.

Cost of doing business: Generally, Singapore offers a lower cost environment as compared to Hong Kong. For isntance, Hong Kong has emerged as the world's second most expensive office market, after London. According to a Global Office Rents survey conducted by CB Richard Ellis in 2010, the average rent in Hong Kong's CBD is US$158.20 per square foot. By contrast, Singapore ranked 37th in the survey with average rents hovering around US$57.4. Furthermore, the cost of hiring manpower is usually higher in Hong Kong as compared to Singapore.

Quality of life: This is the single largest factor that gives Singapore an edge over Hong Kong.  Many expatriates, including business professionals and entrepreneurs have expressed concern over Hong Kong's rising level of air pollution and hectic lifestyle. Some bankers and financial executives prfer to move to Singapore for lifestyle reasons. According to Lee Quane, Regional Director, Asia, ECA International - a company that surveys living conditions in top cities for expatriates,

"Air pollution in Hong Kong continues to be the dominant factor that makes Hong Kong a harder location for international assignees to adapt to living in. This can have an effect on its competitive edge with other countries in the region, particularly as the economy improves, as organisations may find it harder to recruit top talent to this location."

Singapore's tax rates are not only competitive but are also amongst the lowest in the world. While the current trend in most countries is to increase tax rates, Singapore differs in approach and has been steadily lowering its tax rate over the past few years. Businesses can maximize their profits by capitalizing on Singapore's tax system and relocating here. Some of the features of Singapore's tax system include:

• Low corporate taxes: Businesses are taxed@ 8.5% for profits upto S$300,000 and a flat 17% above S$300,000.
• Low personal taxes: Personal tax rates range from 0% to 20%.
• Low Goods and Services Tax (GST): GST rate is 7%.
• Territorial taxation system: Foreign sourced income is taxed in Singapore only if it is remitted into Singapore.
• One-tier tax system: Shareholder dividends are not taxed in Singapore.
• No Estate Duty.
• No Capital Gains tax.
• There are tax incentives in the form of exemptions or reduced tax rates for targeted industries.

Singapore is one of the countries that is highly regarded for its business friendliness and pro-business climate. It has been consistently ranked as the world's easiest place to do business. Singapore's visionary government has crafted policies and regulations keeping in mind the interests of its business community. As a result, any entrepreneur who decides to establish a business in Singapore will be guaranteed of the following:

• Easy entry into the Singapore market: There are virtually no restrictions for foreigners who want to do business in Singapore.
• Ease of company setup: The government has streamlined the company formation procedure; as a result it takes only one day to incorporate a company in Singapore. There are no huge costs involved in establishing and running a business in Singapore.
• Access to a competent and impartial legal system: Singapore is widely recognized as the legal hub of Asia. Singapore's legal environment is fair, transparent, efficient and market favorable. Above all, regulation does not impede business growth.
• Infrastructure: Business infrastructure is excellent in Singapore. The country is well connected to the rest of the world. Moreover, there is a high penetration of technology that has in turn contributed to efficiency. Businesses are assured of state-of-the-art physical and research infrastructure.

Singapore has created an optimal business atmosphere for moth multinational corporations and small to medium sized enterprises. The country is highly ranked in several business indices and rankings for its investment potential, business environment and global competitiveness.

There is practically no distinction between a foreigner and a local who wishes to do business in Singapore. Here are the top 5 unique advantages for foreigners wanting to set up a Singapore company.

1. Unlike most other countries, Singapore does not impose any restrictions on the permissible fields of business that a foreigner can engage in.
2. There are no caps on investment limits.
3. Foreigners are entitled to 100% shareholding of the company.
4. There are no special or additional compliance requirements for Singapore companies that are owned by a foreign resident.
5. Foreign owners need not relocate to Singapore to establish and operate their Singapore company, if they do not wish to do so. Foreign owners who do wish to move to Singapore to run their company are free to do so by relocating under an appropriate Singapore work visa scheme.  It is relatively easy to satisfy the eligibility criteria of the work visa schemes and relocation to Singapore is not a time-consuming or difficult process.

Red-tape and corruption are cited as the two single largest deterrents to business growth. The good news is that businesses that operate in Singapore are free from the shackles of corruption and red-tape. Singapore government agencies are renowned for their efficiency, high level of integrity and equally high standards of corporate governance. Singapore's political leadership has committed itself to maintaining a competitive business environment by enforcing a strict 'no tolerance' approach towards corruption and bribery. As a result, corruption is perceived as almost non-existent in Singapore. Singapore has also been successful in cutting down red-tape by ensuring that its regulatory environment responds to the demands of the business community.

• According to a 2010 business survey conducted by the Political and Economic Risk Consultancy (PERC), Singapore remains the least corrupt nation in Asia-Pacific.
• According to Transparency International's 2009 Corruption Perception Index, Singapore is the 3rd least corrupt country in the world.

A common question on the mind of most foreign entrepreneurs is "Is Singapore a safe and good place to move to?' Other concerns center around the quality of life, socio-cultural environment, cost of living, etc. Today, many expatriates have made Singapore their home and the country is often ranked as Asia's best place to live, work and play.

Singapore can be described as a modern, westernized and cosmopolitan city that offers a safe and conducive living environment. Crime rates are low in Singapore as compared to other countries and the quality of life is excellent. Unlike neighboring Hong Kong, pollution levels are low and the social environment is friendly. The country also scores high on factors such as healthcare, education, entertainment, public transportation, and housing.

According to ECA International's Location Ratings System, Singapore ranks as #1 for offering the best living environment for Asian assignees for 11 consecutive years. Lee Quane, Regional Director, Asia, ECA International, captures the essence of Singapore by rightly stating,

"Singapore’s high quality infrastructure and health facilities, combined with low health risks, air pollution, crime rates and a cosmopolitan population help make the city an easy place for Asian assignees to live in."

Ah, the "chewing gum" question! Well, before I answer this question, you need to watch the video below to know that you can buy chewing gum in Singapore :-)

The western press has endlessly highlighted the story of the chewing gum to create an image of Singapore as some type of authoritarian, Stalinist state. That is simply not true. Here is another clip that provides some context..