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The small island nation of Singapore is a heavyweight when it comes to global business. According to the World Bank and the International Finance Corporation (IFC), it earns the top position for ease of doing business.
The country's elevated business reputation is due to a variety of factors, including a strategically important geographical location, a worldwide set of connected networks, a strong and established legal system and a favorable tax climate.
While Singapore is undoubtedly one of the world's most business-friendly environments, it's also home to a variety of complex regulations and rules which must be closely followed.
The benefits of doing business in Singapore
Singapore is an economic tiger, marrying powerhouse growth with business-friendly policies. In 2011 Business Environment Risk Intelligence (BERI), a leading analysis and consulting firm, awarded Singapore its highest ranking. The country places no restrictions on repatriation of profits or import of capital while offering close diplomatic ties and extremely favorable operating conditions. Given this combination of political and economic stability and growth, Singapore offers a near-perfect climate for investment.
Singapore is also noted worldwide for its low level of corruption and high degree of government efficiency. The country has very strong labor and goods markets, and is one of the world's foremost nations in financial market development.
Singapore is a highly competitive global player. It possesses second-to-none infrastructure, extensive transportation networks and a rigorous approach to education that provides students with the skills required to thrive in today's rapidly evolving economy.
As the most transparent government in Asia, Singapore is on constant guard against corruption. The IMD World Competitiveness Yearbook praised Singapore's strong political infrastructure and wise policy making process. Perhaps no nation treasures transparency more than Singapore, a country with strict laws and regulations governing business transactions.
Finally, Singapore's educational system is considered one of the world's strongest. The nation's secondary schools were ranked number one in the world for math and science education, earning these high marks from the Deloitte 2013 Global Manufacturing Competitiveness Index.
Business challenges in Singapore
While Singapore is certainly fertile ground for new business and investment, it does present a few distinct challenges.
First, new business ventures in Singapore must register with the Accounting and Corporate Regulatory Authority. During this process a name search will be undertaken and a new company will file for incorporation and a tax number. A company seal and registration for Work Injury Compensation Insurance at a local insurer must also be completed during this time.
Registering property in Singapore isn't always easy, particularly with regard to payable fees. Most new companies spend days sorting through a long list of relevant governmental agencies. These include the Inland Revenue Authority, the Ministry of the Environment and Water Resources, the national water agency (PUB), the Land Transport Authority and the Urban Redevelopment Authority.
Singapore's tax system may also present challenges to newcomers. Companies must make five tax payments annually, and these payments take about 82 hours of business time to complete. Fortunately, corporate income tax is competitive and may be filed online. Online filing also applies to VAT and social security contributions, which helps streamline and simplify the process.
Finally, Singapore is an expensive place to do business. The cost of living in this country is high, and obtaining a worker's permit is costly—particularly when dealing with in-demand sectors. Inflation pressure, elevated property prices and a tight labor market have raised the cost of doing business, as both overhead and rental costs have spiked in recent years.
The challenges of operating in a new country are often daunting—regulations are constantly evolving and no business landscape remains static. Without a solid grasp of the issues at hand, businesses are exposed to tax penalties, and even the prospect of civil or criminal litigation.
If you are considering entering the Singapore market, it is critical to have an experienced partner with a global footprint. CT has a worldwide network of offices and partners who will make sure your local needs are met, accurately and on time.
CT can help you get set up, provide a single point of contact and provide you with customized solutions for all your needs. We know that one-size does not fit all. From incorporation to dissolution, major mergers and acquisitions, registered agent services and all the day-to-day compliance needs in between, we’ll make sure you have the right support tailored for your global needs.
We offer a full suite of international products and services for our customers, including:• Global Transactional Services• Global Managed Services• Global Business Expansion GuidesCT has helped businesses and law firms expertly manage compliance issues for 120 years. To learn more about how we can help you better manage your global compliance needs, contact a CT representative at 844-318-1457 (toll-free US).
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