Singapore is an innovation hub for entrepreneurs around the globe and is fast emerging as a top destination for South Africans who are looking to set up a business in Singapore or invest overseas. Already home to around 7, 000 multinationals and 3, 000 start-ups, the Singapore government has created a pro-business environment that encourages innovation and productivity. The country saw its international patent applications swell by 23% last year alone, according to the UN's World Intellectual Property Organisation (WIPO).
“Singapore has always been a great place to do business, so it's no surprise that it's high on the wish list for entrepreneurs, digital nomads and multinationals looking to expand internationally,” says Sovereign Trust (SA) director Coreen van der Merwe. “It's consistently ranked among the easiest places to do business globally, and provides a safe and supportive environment for individuals, businesses and entrepreneurs alike.”
“Apart from a friendly business environment, Singapore also offers a superb quality of life. It is one of the safest countries in the world, has a first-class healthcare system, top quality schools and comfortable housing. That's why it's home to more than a million expats.”
Here's five compelling reasons to consider Singapore as your next business destination.
As one of the world's easiest places to do business, setting up in Singapore is seamless and efficient. Whether you are a corporate or individual investor, the Singapore government is committed to creating a pro-business environment through its economic and manpower policies. With a fully digitalised system in place, Singapore allows most personal and business administrative tasks to be conducted using a smartphone. Registering a company can be performed remotely and takes less than an hour to finalise, and there's an online portal for all government corporate-related matters.
Foreign businesses with plans to grow through conducting high value and substantive activities in Singapore may be eligible to apply for various incentive programmes, while Individual foreign entrepreneurs and investors who are interested in setting up a long-term base in Singapore can either apply for the EntrePass, or consider applying for Singapore Permanent Residence (PR) under the Global Investor Programme.
Hub for innovation
As a global hub for innovation, Singapore has built a vibrant ecosystem featuring global R&D labs for leading Fortune 500 companies, as well as over 150 venture capital funds, incubators and accelerators. The draw of Singapore as an ideal place to grow innovation lies in its ecosystem. Companies are able to tap on a diverse pool of talent, draw on cutting-edge research from top universities and connect with thought leaders in their industries. The government is also fully supportive of the push for innovation, including adopting a ‘sandbox' approach for the development of newer sectors, like Fintech, giving players the room to experiment with new business models in a lightly regulated environment.
By investing significantly on its basic infrastructure and public services, Singapore continues to elevate the quality of life for its residents and expatriates. It has excellent transport networks which connect every part of the island, and it is ranked number one in Asia for digital connectivity. Singapore's infrastructure is built to allow businesses to run efficiently and conveniently. It also has a strong financial ecosystem, which makes it easy to source professional services and capital, while government agencies like the Economic Development Board and Info-communications Media Development Authority proactively support start-ups. This world-class infrastructure can be attributed to Singapore's high quality inputs, technological innovations, economic robustness, political stability, financial prudence and cultural diversity.
Location, location, location
Singapore is one of the world's most connected countries, strategically located along the world's major trade, shipping and aviation routes, making it an ideal hub from which to do business. Changi Airport – regularly ranked as the world's best airport – serves more than 100 airlines flying to about 100 countries and territories globally, while Singapore also links to more than 600 ports globally, with 200 shipping lines passing through Singapore.
Singapore's strategic location – within a six-hour radius of any Southeast Asian country – makes it an ideal hub from which to access the region and its growing consumer market. Singapore is part of the ASEAN Free Trade Area, which supports local trade and manufacturing in all ASEAN countries and works towards lowering intra-regional tariffs. It is also within the ASEAN Investment Area, which ensures mostly non-discriminatory treatment for ASEAN and ASEAN-based investors, transparent rules and regulations, and protection for investors and their covered investments.
Attractive and transparent tax regime
Singapore's tax regime aims to support substantive economic activities in Singapore for long-term, sustainable growth. It offers a highly competitive corporate tax rate of 17% and a 250% tax deduction for qualifying expenditure for eligible R&D activities in Singapore. The basis of taxation in Singapore is source and remittance-based, which means companies with activities outside Singapore – or whose bank accounts are outside Singapore – are not liable for tax in Singapore on foreign-source income. There is no withholding tax on dividends payments, irrespective of where the shareholders are tax resident, no capital gains tax and Singapore has an extensive network of tax treaties with over 85 countries and territories.
Singapore personal tax rates are also highly competitive. They start at 0% and are capped at 22% above S$320,000 for residents, with a flat rate of 15% to 22% for non-residents. There is no capital gains tax or inheritance tax.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.