Benefits of Choosing Singapore for Your Business

How do you pick the right country for your business, when many countries are touting their advantages? Governments across the globe are cutting business taxes, implementing entrepreneur-friendly policies, launching their own venture capital funds — all in the hope of attracting the next Uber, Apple, Google, Microsoft, or Amazon.

Amidst this global competition, Singapore emerges as a compelling choice for incorporation, boasting a myriad of benefits for businesses. Let's explore top-8 key factors why Singapore stands out as a prime destination for entrepreneurs seeking to establish and grow their companies.

Ease to Incorporate and Conduct Business

Access to Startup Resources and Incentives

Access to One of the Best Skilled Workforce

Singapore’s Robust Legal Framework

Singapore’s Favorable Tax System

Strong Intellectual Property (IP) Protection

Singapore's Strategic
Location

High Quality of Life in Singapore

How We Choose Factors to Consider Where to Launch Your Business?

CorporateServices.com conducted a survey of more than 100 business founders from five countries — India, UK, USA, Japan, and Australia — who have launched their businesses in Singapore. Every participant in the survey was leading a startup that had received external funding and employed more than ten employees. The participants were asked to rank the various factors they considered most important in selecting Singapore as a country to incorporate and grow their company. Let's delve into these eight key factors identified through the survey.

We will assess each factor using a five-point scale with possible ratings of Poor, Fair, Good, Excellent, and Outstanding.

#1 Ease to Incorporate and Conduct Business in Singapore

Fast and Simple Incorporation Process

For more than 10 years, World Bank has ranked Singapore in the top 3 countries among 190 countries for its ease of doing business. Registering a new company in Singapore is simple, efficient, and quick. The total time can be anywhere from 1 day to a few days. The corporate compliance rules are straightforward and easy to follow. Startups can follow these rules without excessive red tape or financial burden. For small and mid-sized firms, the basic rules can be summarized as follows:

Accounting standards must be followed and taxes must be filed on a timely basis.
Government records must be updated in a timely manner whenever there are changes to the company structure.
Employment regulations must be complied with.
Personal data of employees and customers must be protected.
Competition between markets must be kept open, and
Certain industrial sectors require that the business obtain a permit or license to operate.

These relatively simple and easy-to-follow regulations make corporate compliance significantly less onerous than in most other countries.

Singapore Business-Friendly Regulations for Foreigners

Singapore’s corporate tax policies are pro-market, and these tax benefits extend to companies owned by foreigners. Foreign-owned businesses also benefit from open ownership rules and minimal controls on currency movement. The government allows foreigners to own 100% of the stock of a company incorporated in Singapore, without the need to have local partners or shareholders. This enables startups to adopt the capital structure that is suitable for them rather than be forced into something the government desires. There are no restrictions on capital movement into or out of Singapore. These factors allow startups to function freely, with easy access to funds and without onerous laws.

Our assessment of how Singapore ranks on business-friendly policies: Outstanding

#2 Access to Startup Resources and Incentives

Singapore is a small country with a population of less than 6 million. Yet, with more than several thousand startups launched each year, dozens of investment funds and angel investor networks, more than 50 co-working spaces, and an emerging culture of entrepreneurship, Singapore is aiming to make the country the “startup factory” of Asia.

Government Grants and Support

Singapore’s government is supportive of startups and provides many resources for new businesses, including grants, tax incentives, and in-kind assistance. The type of help available depends on your startup’s needs as well as its ability to meet the qualifying requirements. Many of the resources become available simply by incorporating your startup in Singapore. Singapore’s government has created several funds and grants that target specific emerging industries. Nearly all large global VC funds have a presence in Singapore and target startups that are based here.

List of Benefits of Singapore Incorporation

The free movement of international capital allowed by Singapore makes fundraising efficient and quick. The early-stage investor ecosystem in Singapore is stronger than ever before. The industry is international in character as more startups seek funding from seed, angel and venture capital investors, who may be based outside Singapore. With access to local and international capital, Singapore startups are not capital-constrained.

Singapore is a hub for innovation and technology, making it an attractive destination for entrepreneurs looking to launch an IT business. With a stable and business-friendly environment, a highly educated workforce, and a thriving tech industry, Singapore offers numerous advantages for IT companies.

Finally, Singapore has been described as the 1st freest economy in the world, making it a great place for startups to operate. You are able to set up a business in any sector; trade is not limited; and currency is strong and stable, allowing for capital to flow easily in and out of the country.

Our assessment of how Singapore ranks on accessibility of resources that are critical to startups: Excellent

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#3 Access to One of the Best Skilled Workforce

Today’s startups cannot succeed without a knowledgeable, skilled, and efficient workforce. Entrepreneurs and investors are therefore attracted to countries where a high-skill workforce can be hired at a reasonable cost.

Highly Educated English Speaking Talent Pool

Singapore ranks as the best country for developing human capital, according to a report released by the World Bank. The country’s education system is considered the best in the world by various international organizations (such as OECD, World Bank, and The Economist). The country’s high school students consistently rank at the top of the OECD's Programme for International Student Assessment (PISA) in the three main categories of mathematics, reading, and science.

Nearly every young or middle-age Singaporean speaks English. Singaporeans are some of the most productive and well trained workers in the world. The country’s excellent education system produces a workforce that is good at what it does, yet on wages it is extremely competitive with other countries. However, a common complaint about Singapore’s workforce is the lack of “creativity” in Singaporeans. Perhaps an educational system focused on cut-throat competition and a culture of obedience has created a rule-bound mentality that has impeded students from exploring the creative side of their brain. Singaporeans are very efficient, follow protocol, listen to instructions, plan ahead, and are very organized and analytical.

Singapore Immigration Policies

Singapore’s government recognizes these shortcomings and is implementing educational reforms that nurture creativity and innovation. At the same time, Singapore welcomes foreign talent and hopes to bring creative ideas to the city-state through this talent pool. The country has several immigration schemes that give preference to persons who can show a history of innovation and creativity, either in business or in the arts. In general, the state’s policies on immigration are liberal, especially when it comes to skilled foreign talent. For foreign entrepreneurs and skilled professionals, it is not difficult to acquire and maintain a work visa, which can be converted eventually to Permanent Residency in the country if the business becomes a success. Not only can you obtain a working visa to start a business, so can your employees from other countries. Thanks to these pro-immigration policies, the country attracts a large number of workers from all over the world.

Our assessment of how Singapore ranks on workforce talent: Excellent

#4 Singapore’s Robust Legal Framework

Singapore’s legal system is known for being fair, efficient and impartial, and it is ranked as the fifth least corrupt country in the world.

Absence of Corruption

Right from the nation’s inception, corruption has been limited because of the moral standards set and exemplified by the country’s founder, Lee Kuan Yew. Motivation to take bribes or commit other misdeeds within the government is low, by careful design. The country’s civil service selects top students and pays them very well so that they are not tempted by illegal offers of money or favors. For those who stray, strict punishment is meted out, further reducing the temptation to engage in corrupt behavior.

Rule of Law

Strong protections for contract law are in place with Singapore’s legal system. The laws themselves are strictly enforced by the courts, and its judiciary is respected worldwide for its neutrality, quality, fairness, and lack of political meddling. It is a testament to the country’s legal system that many large companies often mutually choose to apply Singapore law to their contracts even when neither party is located in the country.

Our assessment of how Singapore ranks on the rule of law: Outstanding

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#5 Singapore’s Favorable Tax System

Taxes stand as a foremost concern for entrepreneurs, serving as one of the pivotal factors when deciding to set up a business anywhere in the world. Singapore has one of the world’s simplest and most rational tax system.

Newly incorporated companies in Singapore receive attractive tax breaks for the first three years of their operation: such companies are given a 75% tax exemption on the first S$100,000 of taxable income and an additional 50% exemption on the next S$100,000 of taxable income, while the rate for corporate taxes is capped at 17%. Furthermore, numerous tax deductions are available that promote R&D and productivity improvements by startups, thus further reducing the effective tax rate. Business losses can be carried forward to reduce future tax liabilities. Since 2002, Singapore has followed a single-tier corporate tax system. Corporate dividends are tax-exempt in the hands of shareholders, and companies are not required to deduct tax from dividends that are paid to shareholders.

Singapore also has no tax on capital gains. This means that if a business is sold, shareholders receive the full amount of the sale price tax-free, since no capital tax is to be paid. This is in sharp contrast to the tax policies of most countries, including the US, Germany, UK, Australia, Japan, India, Brazil, and China.

Selecting Singapore as the place to launch my startup and moving to Singapore was one of the best decisions of my life. I spent five years growing my business, but I was cash-flow positive after 14 months. By the third year, my company was generating more than 700,000 SGD in gross profit annually. Given the various tax incentives and R&D expense deductions, my effective tax liability on corporate income was less than 10%. At the end of each year, I declared dividends from the post-tax profits of my business. As a shareholder, I received the full dividend amount and I had to pay no further tax on this amount, either at the corporate or personal tax level.
“In my fifth year, I received an offer to acquire my company. I sold it for nearly 9.5 million SGD and received the full sale amount totally tax-free. Given my personal experience, my best advice to all entrepreneurs, no matter from which country, is — if you are serious about your business, incorporate in Singapore!
Rajesh, an Indian entrepreneur who relocated to Singapore in 2007

Double Taxation Avoidance Agreements

To make Singapore’s tax system even more appealing, the country assiduously avoids double taxation of its companies. It has signed Avoidance of Double Taxation Agreements (DTAs) with more than 50 countries. And for countries without DTAs, Singapore provides Unilateral Tax Credits (UTC).

Our assessment of how Singapore ranks on tax policies: Outstanding

#6 Strong IP Protection

Singapore constantly stands in the top 10 countries of the world on the protection and enforcement of Intellectual Property laws, according to this International IP Index.

The Singapore government actively supports and encourages the protection of intellectual property, making it one of the most secure countries for the protection of intellectual property rights. Through the government’s IP Hub Master Plan, Singapore protects IP rights with a very modern legal framework for patent, copyright and trademark laws, trade secrets protections, and industrial designs protections. All of these rights are mediated and enforced by Singapore’s efficient legal system. Many foreign companies for whom IP protection is of paramount importance (such as Microsoft, Meta, and Google) have selected Singapore because of these protections.

Our assessment of how Singapore ranks on IP policies: Outstanding

#7 Singapore's Strategic Location

Singapore’s central location in Southeast Asia makes it a physical and metaphorical gateway to the continent’s 3 billion people. Singapore’s Changi Airport has been named “world’s best airport” for the seventh consecutive year by Skytrax. Over 20 million passengers enter or depart from the airport each year, and flights to major cities around the world are available daily. Some of the largest economies in the world — such as China, Japan, Australia, and India — are a short flight away. For any entrepreneur, having convenient access to other major markets is an important factor.

The port of Singapore is one of the busiest in the entire world and is classified as a major International Maritime Center.

Ease of Global Expansion

Singapore also provides a range of assistance programmes to help startups expand globally. These grants can be used to perform market research, hire marketing staff, or perform contract negotiations.

Singapore’s corporate laws provide very good support for a holding company structure. Therefore, Singapore is an ideal place to set up a holding company that expands overseas through subsidiaries. Other advantages such as an extensive network of double tax treaties, ease of capital flow, no currency restrictions, etc. have already been highlighted in this article.

Our assessment of how Singapore ranks on the geographical location and ease of global expansion: Outstanding

#8 High Quality of Life in Singapore

The majority of foreign-born professionals and entrepreneurs who establish businesses and relocate to Singapore typically do so with their families. Among the primary concerns for new residents in Singapore is the quality of life.

Singapore is ranked as the safest country in Asia and the third safest city in the world. Nearly all of the infrastructure in Singapore — from information and communications to transport and water sanitation — is modern and world-class. Recently, the World Economic Forum’s Global Technology Report named Singapore as the most “tech-ready” nation.

The city offers excellent quality and variety for transportation, including subways, buses, taxis, trains, e-scooters, and bicycles. Singapore has one of the best and most affordable public transport systems in the world. While residents can own a car, the number is capped by the government to combat pollution and road congestion. Public transport — including the taxi system — is cheap compared to other countries, making it a smarter choice for most residents. The healthcare system is affordable and efficient. With plenty of public places for recreation, such as the Gardens by the Bay and the ArtScience Museum, as well as famous landmarks like the Merlion fountain, Singapore provides ample options for outdoor activities.x

While it’s exciting to contemplate launching in a new city, a concern you might have is how will you be received as a foreigner — and how difficult will it be to communicate with others when you don’t know the local language. Singapore is a vibrant, polyglot city, but it requires all its residents to learn English. As one of the city’s four official languages, English is spoken by roughly 80% of the population and is the primary language for business, government, and education. This makes it easy for a foreigner to establish a business and live without worrying about language barriers.

Singapore has a large diversity of culture, religion, and food. Chinese, Malaysians, Indians, and Europeans live harmoniously together in an environment that embraces cultural and religious tolerance. Thanks to this acceptance of diversity, there is no need to worry about your ability to operate easily in Singapore’s culture.

With its tropical climate, Singapore offers some of the most wonderful dining experiences anywhere in the world. Chinese, Indian, Malay, and Western ingredients are combined to create uniquely Singaporean dishes such as roti prata (a fried pancake served with a vegetable or meat curry), laksa (a spicy noodle soup with chicken, prawns or fish) and Singapore’s national dish, chili crab (stir-fried mud crab with a mild sweet-and-sour chili sauce). Even the pickiest eaters will find something they will love in Singapore’s rich and diverse cuisine.

Our assessment of how Singapore ranks on quality of life: Excellent

Things You May Not Like About Singapore

While Singapore is a remarkable city — safe, clean, efficient, modern, and friendly — no place can be perfect for everyone. Some of the things that make Singapore a great place for one person can also make it challenging or annoying for another. What follows is a list of some of the aspects of Singapore that some foreigners complain about.

Singapore is sometimes called a “fine city,” the phrase being used as a double entendre. It plays on the country’s fixation on cleanliness and safety and its reputation for issuing fines for nuisance behaviors that may be common and accepted in other countries but are forbidden here.

Some of the more “colorful” rules that that can attract a fine include:

Importation, selling, or chewing of gum: Chewing bubble gum in public can result in a fine
Littering: Get caught littering in Singapore and pay a fine
Forgetting to flush a public toilet: Don’t forget to flush
Feeding birds: If you feed the pigeons, you may pay a fine
Using WiFi without permission: If you log on to an unprotected WiFi account without authorization, it can attract a fine
Eating or drinking in public: Consuming food outside of permitted areas is subject to a fine

While these strict laws are still on the books, they mostly act as a deterrent to behavior not welcomed in Singapore. Most visitors will rarely have occasion to face a fine and will experience Singapore as an open, easygoing, respectful, friendly, and relaxed country.

Singapore also has stringent laws that apply to more serious infractions, such as vandalism, drug use, and drug importation. Singapore takes these laws very seriously and such offenses can result in heavy imprisonment and corporal punishment.

Overall, Singapore is a rule-following country. It is extremely safe, and visitors of either sex will rarely feel uncomfortable walking alone late at night in any part of the country.

Singapore has the fastest Internet speed in the world, and the Internet plays a major role in the lives of most Singaporeans. However, the Media Development Authority (MDA) controls what Singaporeans can find online. The MDA controls the licensing of Singapore-based websites and can block external websites if it finds them objectionable. While the majority of the blocked websites related to gambling or pornography, in a few cases, the Singapore government has blocked or censored news, religious and political websites that it finds do not best serve the interests of its people.

Overall, MDA regulates Internet content, and Singapore companies engaged in certain content publishing activities may need to obtain a license from MDA.

Some Singaporeans lament that the rapid rise of Singapore’s standard of living over the past 50 years has created a culture of materialism. It is said that the Five C’s (cash, car, condo, credit-card and country club) seem to define the “Singapore Dream”. Although discouraged by the country’s leaders, ostentatious displays of wealth are common. This consumerism may make some foreigners uncomfortable.

Singapore is a country where the top 1% of the population holds more than a quarter of the country’s wealth, according to the Credit Suisse Global Wealth Report. This divide is a result of Singapore’s extraordinary economic growth in the past 5 decades. This economic success has resulted in a sizable group of extremely wealthy individuals in the country. The elite of Singapore lives the good life and frequently indulges in ostentatious displays of wealth. The movie Crazy Rich Asians is set in Singapore and provides an accurate vignette of the lifestyle of this select group. Given the small size of the country, this chauffeured lifestyle is often on display in your face. It can be uncomfortable for some foreigners who are used to living in countries with smaller extremes in wealth.

Singapore is a tropical country. It is hot and humid. The average year-round temperature is 26.7 degrees Celsius (80.1 degrees Fahrenheit), with an average humidity of around 84%. The country averages 2150 mm (84.6 inches) of rainfall a year. Most rains fall during the monsoon season, but unpredictable showers occur throughout the year.

To mitigate the year-round heat and humidity, offices, stores, and public spaces blast the air conditioning, resulting in frigid indoor temperatures. It is common to find people wearing jackets indoors in this tropical country.

The diversity of any nation’s populace is often viewed as a positive, but it may create a few disadvantages for expats living in Singapore.

There are 11 nationally recognized public holidays in Singapore. These holidays represent all of the major religious and ethnic groups of the nation. Every employee working in Singapore has the right to take time off during these holidays. Those who are required to work on national holidays are required to be given an additional paid day of leave, or they may accept an additional day’s salary in lieu of time off. In addition to the public holidays, during the month of Ramadan, many Muslim-owned businesses follow curtailed hours of operation. Many ethnically Chinese-owned businesses modify their business hours during the Lunar New Year. These disruptions can potentially affect your business adversely.

English is the official language of Singapore, but locals often speak “Singlish” — a portmanteau created by combining “SINGapore” and “EngLISH.” It’s a mixture of English, Malay, Tamil, and Chinese. Although the vast majority of Singaporeans can understand and speak standard English, many foreigners initially may have a problem understanding what they hear. Singlish is only a minor annoyance, and after a few weeks in the country, most expats pick up the basics. Learning a few Singlish essentials is a good idea to help you adjust quickly if you plan to visit Singapore.

Conclusions

Singapore is a country with limited resources, but it has managed to achieve world-class economic growth by focusing on its core proficiencies. Singapore’s current strengths are excellent infrastructure, a technologically advanced industrial sector, pro-business policies, excellent global reputation, and pro-growth, reform-oriented economic policies.

While it can be stressful to start a new business, Singapore is a very attractive choice because the country makes it easy to plant roots for your business and thrive. It is a world-class economy and a rich culture, full of opportunities for people with innovative ideas and the drive to create a successful business. With many programs focused on supporting foreign startups, in particular, it’s fast becoming a popular home to entrepreneurs from around the world.

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