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The small island nation of Singapore is a heavyweight when it comes to global business. The country's elevated business reputation is due to a number of factors, including a strategically important geographical location, a set of connected networks worldwide, a strong and established legal system and a favorable tax climate.
Singapore’s economy is heavily dependent on exports, with a focus on electronics, technology and pharmaceuticals. The financial services sector has also recently experienced notable growth. Singapore has been a part of the World Trade Organization (WTO) since the organization’s inception in 1995 and has maintained low barriers to trade as part of an outward-looking open economy.
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.
Singapore was listed by The World Bank as the second-best country for ease of doing business. It has low barriers to trade and a pro-business, pro-enterprise outlook. For instance, organizations are typically able to provide input for major business-related policies before they pass. There is minimal red tape, plenty of tax incentives, and other types of assistance available to organizations.
Singapore is an economic tiger, marrying powerhouse growth with business-friendly policies. The country places no tax on capital gains while offering close diplomatic ties and extremely favorable operating conditions. Given this combination of political and economic stability and growth, Singapore offers fertile ground for investment.
As one of the most transparent governments in Asia, Singapore is on constant guard against corruption. It was ranked the third least corrupt nation in the 2018 Corruption Perceptions Index reported by Transparency International. It’s a country with strict laws and regulations governing business transactions.
Considered a technology hub, Singapore’s economy promotes knowledge-based and research-intensive industries. By 2025 Singapore is expected to reach $714 million in revenue related to the Internet-of-Things (IoT).
And the workforce is prime to support it. Singaporeans in their 40s benefit from an educational shift that focuses on technological literacy, skills development, innovation, and enterprise.
New business ventures in Singapore must register with the Accounting and Corporate Regulatory Authority. You will need to use a registered agent to submit the online application and, in certain situations, may need to employ a director who resides in Singapore.
Registering property in Singapore isn't always easy either, 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.
In order to successfully do business in any foreign country, it is important to consider cultural differences. For those doing business in Singapore, keep in mind that there are certain gestures and topics to avoid. For instance, pointing is considered rude. Avoid conversation topics about personal life, politics, and religion. Instead try discussing safer topics like travel, architecture or local cuisine.
Another important cultural difference to consider is punctuality. While it may not be an issue to start a meeting a few minutes late in the U.S., it is considered rude in Singapore to keep an executive waiting. Age and seniority are revered as well. Avoid publicly correcting or disagreeing with an older person or a superior as this is considered disrespectful. Be sure to look into additional cultural nuances for a smooth transition while doing business in Singapore.
Companies expanding to Singapore can face barriers if they are importing beef, pork or poultry products. There are also some hurdles to overcome regarding service barriers, including restrictions on using satellite dishes, direct-to-home satellite TV services, paid television subscriptions, legal, banking, and healthcare services.
Businesses expanding to Singapore may face challenges in regard to IP protection and enforcement. U.S.-based companies have raised concerns about limitations of trade secrets protection, a need for stronger enforcement against infringing goods transshipped through Singapore, and inadequate deterrent penalties for end-user software piracy.
Finally, Singapore is an expensive place to do business. The cost of living in this country is high. Inflation pressure, elevated property prices and a tight labor market have raised the cost of doing business as well.
The challenges of operating in a new country can be 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 important 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 the day-to-day compliance needs in between, we’ll make sure you have the right support tailored for your global needs.
To learn more about how we can help you better manage your global compliance needs, contact a CT representative at (855) 444-5358 (toll-free US).
1. What should I know about Singapore’s economy?
Singapore has an advanced, free-market economy that is heavily reliant on exports including electronics, technology, and pharmaceuticals. It boasts an open and corruption-free environment.
2. What are the official languages in Singapore?
Singapore has four official languages: English, Chinese (Mandarin), Malay (National Language) and Tamil.
3. What is the corporate income tax?
17% for YA 2018
4. What are the main entity types available?
The main entity types are Sole Proprietorship, Partnership, Public or Private Incorporated Company, Branch, or Representative Office. A newer option available is Variable Capital Companies (VCC)
Prepare for expansion in this region with all of the key information about tax rates, incorporation details, entity types, business environment, and more. Download the country guide for a comprehensive and easy-to-read breakdown.
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