The city-state offers a business-friendly regulatory environment, a highly skilled local workforce, and strong enforcement of intellectual property rights. These elements, along with several others, have contributed to Singapore achieving one of the highest GDP growth rates in the world, averaging 7.7%.
With a solid economy, an attractive tax system, and ease of incorporation and operation, Singapore has earned its reputation as one of the “Four Little Dragons of Asia.”
This guide details the numerous advantages Singapore provides to both new and established businesses. Here’s why you should consider company registration in Singapore for foreigner:
1. Strategic Location
Situated close to economic giants like China and Japan, as well as emerging markets like Indonesia, Singapore is strategically located in the heart of South-East Asia.
At the city-state’s capital, Changi International Airport hosts over 80 international airlines and connects to more than 330 cities worldwide. With approximately 20 million passengers passing through annually, travelers can quickly reach most Asia-Pacific destinations within hours.
In addition to a high volume of domestic flights, Changi International Airport is home to leading logistics firms like FedEx and UPS. Notably, the World Bank’s Logistics Performance Index, a global survey of express carriers and freight forwarders, rated Singapore as Asia’s top location for logistics performance.
Singapore’s seaport infrastructure features over 200 shipping lines, linking to around 600 ports in 123 countries. As one of the world’s busiest container ports, the Port of Singapore handles 20% of the world’s transshipment trade, equivalent to 1.15 billion gross tonnes annually.
2. Established Infrastructure
Visitors to Singapore can attest to its remarkable infrastructure, which includes commercial buildings, internet infrastructure, an efficient airport, highway systems, subway, and public parks.
Singapore has made significant advancements in its technological infrastructure and the agility of its firms. As a regional digital hub, it has shown consistent progress in capital availability and supportive regulation for technological development.
According to Mercer Human Resources’ 2012 Quality of Living Survey, Singapore ranks as Asia’s top location for infrastructure. Additionally, the IMD World Digital Competitiveness Ranking 2019 lists Singapore as the second most digitally competitive economy globally.
Most of Singapore’s infrastructure has been developed over the past decade, ensuring its modern design can meet the growing demands of businesses. It offers state-of-the-art port facilities and excellent air connectivity to global destinations, particularly the emerging Asia-Pacific markets.
3. Robust Economy
Singapore is known for its well-established free-market economy driven by trade, manufacturing, and finance. Services account for approximately 80% of Singapore’s GDP, and the city-state maintains an extremely low unemployment rate and low inflation.
Despite its small domestic market, Singapore is considered one of the most stable economies in the world. It is largely driven by exports in machinery, electronics manufacturing, and financial services, resulting in high government revenue, no foreign debt, and annual budget surpluses.
Today, Singapore’s economy is ranked by the World Economic Forum as the most open globally. The country’s gross national savings are close to 50% of its GDP, and with exports around S$500 billion annually, Singapore’s trade-to-GDP ratio is among the highest in the world. These factors have established Singapore as a hub for innovation, entrepreneurship, and wealth management.
4. Favorable Tax System
Singapore is renowned for its competitive tax structure, with the highest corporate tax rate on taxable income being 17%. Additionally, Singapore has one of the lowest value-added tax rates globally.
There is no tax on capital gains, and income tax is levied only on locally generated income.
Income earned by foreign subsidiaries of these companies is also exempt from tax, attracting many entities wishing to form Singapore holding companies.
With a tiered tax system for personal and corporate taxes, all Singapore resident companies are eligible for partial tax exemption, translating to a typical tax rate of 8.5% on taxable income up to S$300,000 annually.
Singapore also has an extensive network of Avoidance of Double Taxation Agreements (DTAs) with 62 countries and investment protection agreements with most countries worldwide. DTAs ensure that economic transactions between Singapore and a treaty nation are not subject to double taxation.
5. Support for Startups
The Singapore government offers numerous grants, funding, and subsidies for local and international startups. These include initiatives like Startup SG Tech, the Enterprise Development Grant, and EDB Singapore’s Innovation, R&D, and Capability Development, which help subsidize labor costs and enhance business operations.
Singapore has also introduced measures promoting business development, such as the Global Trader Programme (GTP), International Headquarters Programme (IHP), and Regional Headquarters Programme (RHP).
With a growing culture of entrepreneurship, Singapore’s business infrastructure is innovative and startup-friendly. The country’s investment in startups ranks second in Asia, with a tech community now rivaling Silicon Valley in terms of startup talent.
6. Easy to Conduct Business
Consistently topping the World Bank’s Ease of Doing Business Report, Singapore is highly regarded as a triple-A-rated economy and a stable location for international expansion. This is particularly evident in international trade, investor protection, construction permits, and insolvency resolution.
Investors and entrepreneurs can easily access capital, with 128 commercial banks, 31 merchant banks, and over 600 capital market service license holders across the country.
Equal opportunities are provided to both local and overseas firms, supported by transparent economic and regulatory policies and a pro-business government.
Singapore’s sustained growth is the result of its ease of doing business, openness to global capital and technology, support for free-market competition, and investment-friendly policies. These factors make Singapore an internationally connected business center and a thriving modern, multicultural society.
7. Fast & Simple Incorporation
As one of the world’s least bureaucratic markets, it’s possible to open a company in Singapore with a minimum of one shareholder, one director, one local company secretary, a local address, and a share capital of just $1.
In most cases, it takes less than three days to incorporate a company in Singapore (subject to compliance approval), facilitated by Singapore’s Accounting and Corporate Regulatory Authority (ACRA).
The process for incorporating a new business in Singapore can be summarized in three steps: choosing a business entity, setting up a company (including a Company Constitution and signed Consents to Act as Director and Company Secretary), and opening a bank account.
While multiple options are available, most new companies register with ACRA as private limited companies due to their scalability. A company is then recognized as a taxable entity, with shareholders not liable for losses or debts beyond their share capital.
Newly incorporated Singapore companies can obtain a business profile from ACRA. This electronic report includes information such as a business registration number and registration date, which is required to open a corporate bank account and apply for permits and licenses.
Summary
As a global hub for technological innovation and financial services, Singapore attracts thousands of investors and entrepreneurs each year.
With its strategic geographical location, robust economy, and extensive support for startups, including attractive tax incentives, it’s no wonder many choose to incorporate their companies in Singapore.
If you’re opening a company in Singapore, you need a reliable, cost-effective means for collecting and sending payments like Statrys Business Account.
We provide international financial services to businesses of all sizes and across all industry verticals. This includes non-bank business accounts, local currency accounts, and forex services, including spot and forward contracts.