For many years, Singapore has been the preferred home for many global businesses. This is due to its developed infrastructure, business friendly policies, political stability, strategic location, skilled workforce and the favorable intellectual property rights laws. Global businesses have found it easy to establish their regional headquarters in this business friendly country. In fact, over 7,000 multinational companies have established their operations in this country.
The sound infrastructure makes doing business in Singapore easy and favorable. The existence of good road networks has attracted many manufacturing businesses such as a large Dutch multinational firm – which blends chemicals and fuels for petrochemical clients. It is due to the highly developed transport infrastructure, business friendly environment and the presence of other global petrochemical players that the firm has decided to establish its Asia Pacific headquarters in Singapore.
Secondly, it is a center for financial services that provides easy access to affordable funding services for business owners. It is home to 124 commercial banks, 365 fund managers and 531 license holders for capital markets. Among them is the well-known Swiss investment bank with its headquarters located here, and the United Kingdom based asset management firm which helps clients in managing their investment portfolios. It is due to the existence of these banking services that entrepreneurs find it easy to expand their businesses.
Regardless of who is investing in the country, the Economic Development Board (EDB) of Singapore offers incentives for multinational companies to establish their Asia Pacific headquarters in the country. A concessionary tax rate of 15% is enjoyed by the regional based companies from the income that arises from the business activities carried out in this state, while the international headquarters enjoy 0 to 10% attractive tax rates.
Also, those regional headquarters using the international intellectual property holding location in Singapore can get a Writing-down Allowance for the IP acquisition cost. An American market intelligence consultancy which specializes in IT has its headquarters in Singapore. This is due to the fact that Singapore plays a great role in intellectual property protection – according to World Economic Forums Global Competitiveness Report, Singapore is the fourth best place in the world and best in Asia in matter of intellectual property protection.
Additionally, the country offers a large network of free trade agreements. Investors in Singapore are able to gain great returns from over 20 Free Trade Agreements (FTA) with 27 economies and avoids double tax with 71 double tax agreements. An American firm that processes and distributes animal feed, grains and palm oil made Singapore its regional hub in the Asia Pacific because it is the perfect place to grow its business. Since then, it has been operating poultry-processing plants in Thailand, and processing imported soybeans into animal feed for the China market without limitations on industrial and financial trades.
Moreover, companies or headquarters based in Singapore receive a foreign income exemption. They are able to bring in dividends from the subsidiaries located in other countries directly without taxation. Exemptions apply to those companies who do not meet the required qualifications. This is possible because Singapore uses a tax system that is territorial based. In actual fact, tax is only levied on foreign-sourced income if it is repatriated back to Singapore.
The republic’s strategic location and extensive air connectivity is another benefit for establishing a business in Singapore. It is located in Southeast Asia, and is surrounded by emerging markets. The republic facilitates trade with its effective and efficient logistics infrastructure. The Singapore’s international airport – Changi, serves over 100 airlines flying to about 80 countries in 320 cities. This facilitates business activities with other countries and makes it more efficient with its daily flights; both in and out of the country.
In conclusion, doing business in Singapore is easy, and reaps great benefits. This is evident from the large number of firms who have made it their regional home.