Improvements in global transportation and communications systems and shifting economic might on the global level is making it more important than ever to effectively join the global market. Instead of operating within a single nation or small number of similar nations, international business is growing at an incredibly rapid pace and making it possible to engage in a truly global enterprise.
But you need an ideally situated global headquarters to make it all happen. While virtually all global business enterprises get their start within a single nation, growth leads to many to become truly massive global enterprises. Whether you are part of a team leading global expansion efforts for a large and well-established enterprise or an entrepreneur looking for an ideal global business base, Singapore is a highly attractive locale for many great reasons.
High International Rankings for Business Environment
Many of the most prestigious and respected organizations that are focused on international markets and the global economy as a whole agree Singapore is an outstanding business locale. The independent city-state ranks at or near the top of many prominent global business rankings by prestigious organizations. The World Bank and globalEDGE consistently rank Singapore among the world’s most attractive economies in which and from which to do global trade.
The World Bank is a global non-profit organization with 189 member nations and is focused on sustainable economic growth and shared prosperity. The World Bank is comprised of five global organizations that address international reconstruction, development, finance, investment, and economic conflict resolution.
Michigan State University’s Eli Broad College of Business and the university’s International Business Center created globalEDGE to study international economies and global business and provide useful resources to help guide more sustainable and beneficial economic growth. Both organizations commend Singapore’s very business friendly economic policies and affirm it is a truly exceptional international business locale.
Also affirming Singapore is a great place to do business is the large number of globally prominent brands that have at least a regional headquarters located in Singapore. Those global entities include:
* Apple
* BMW
* Sony Corporation
* Bayer AG
* Carl Zeiss
* GlaxoSmithKline
* Walt Disney
A long and very impressive list of exceptionally successful business entities and other organizations all affirm there are many great answers to “Why do business in Singapore?” The following offers a much closer look at why doing business in Singapore is a great idea.
Highly Strategic Location
Singapore is very strategically located in the East Asia & Pacific economic region with many nations and population centers located within easy reach via traditional methods of commerce. The high-income nation has a population of 5.64 million and a representative government that uses a parliamentarian system of governance.
English is the primary language spoken while about 70 percent of its citizens are of Chinese heritage. Malay, India and indigenous people also round out Singapore’s top population centers. With English as its official language and many of its citizens also fluent in Chinese, Singapore is the kind of locale where the world’s two largest national economies can conduct business in an efficient manner.
Its international flavor and history as a former British naval base and port of commerce dating back to the late 19th century help to affirm Singapore as a truly global naval center and place to get business done. Singapore has been a globally prominent shipping center for more than a century and in many ways now leads to world in supporting and enabling global commerce.
Exceptional Port Facilities
The Singapore Port Authority formed in 1996 with the mission of creating a world-class global shipping center. The Port Authority’s work has succeeded admirably well with a thoroughly modern and state-of-the-art port facility that ranks second in the world in TEU capacity. Singapore is the world’s leading transshipment hub and leads all global ports in bunkering.
The Port of Singapore connects with 600 global ports located in 120 nations and at any given time has about 1,000 vessels making use of port facilities. Singapore handles more than 130,000 ships annually and has more than 5,000 maritime organizations enabling the commerce.
Singapore’s proximity to many of the world’s top emerging economies make it an ideal location for shippers and freight-forwarders. Many of the world’s top companies across virtually all industries have business operations in Singapore. A big part of the reason why is the outstanding port and all its great facilities that earn top marks in all of Asia.
Singapore’s port facilities rank as Asia’s best and have owned that crown for more than 20 years. Its container ports provide 200 shipping lines that connect 600 ports in 123 nations. Singapore is the world’s busiest container port and likely will continue to hold that title as economic growth continues in Southeast Asia and beyond.
Outstanding International Airports
Singapore’s Changi Airport continually ranks among the best airports in the world in terms of passenger service, capacity and processing. Skytrax in 2020 named Changi Airport the world’s best for an eighth straight year and ahead of Tokyo Haneda, Munich Airport, Hong Kong International, and many other notable international airports.
Changi Airport also earns the top spot among airports that annual handle between 60 million and 70 million passengers. Skytrax issues its annual award based on surveys of more than 13 million international air travelers. Changi serves more than 80 international carriers and is connected to more than 330 airports.
Changi also is a global host for the world’s best logistics firms, like FedEx and UPS. Logistics Performance Index says Singapore is the best in Asia when it comes to logistics performance and enabling the wheels of commerce to keep on rolling. Its port facilities and airport are big reasons why.
A 2018 BusinessInsider feature story on the world’s best airport shows Changi offers much more than very efficient passenger air services and fast processing – which whisks passengers happily from start to finish in an average time of about 15 minutes when arriving at the airport and getting ready to board a flight.
Those who have might have long waits for a connecting flight or who arrive very early can enjoy a wide range of amenities that redefine airport service. Changi offers a rooftop swimming pool, free movie theater, spas open around the clock, a butterfly garden and much more. It has shopping, dining, entertainment and attractions that spurred the New York Times to publish a story from a reporter who flew to Singapore just to spend a day in the world’s best airport.
While Changi Airport ranks as the world’s best, it also operates the Seletar Airport, which is a nearby business airport facility that also provides maintenance and repair services for commercial aircraft. Seletar Airport supports general aviation and business charter and private flights and has a passenger terminal capable of handling more than 700,000 business passengers annually.
With such outstanding air services available, Singapore is an ideally situated locale for reaching Europe, Australia, India, China, Korea, Japan, Brazil and many other nations. The business airport does an exceptional job of handling private business flights that enable important clients, business partners, investors and others to enter privately and legally while also enjoying the benefits of charter and private flights.
World-Class Communications Connectivity
The DHL Global Connectiveness Index in 2020 named Singapore the world’s best connected nation of its size and the second-best connected in the world. The Netherlands edged Singapore by 2 points with a Global Connected Index (GCI) ranking of 91 points to Singapore’s 89. Both nations held the same rankings in 2019.
Deutsche Post DHL Group and researchers with New York University’s Leonard N Stern School of Business conduct the annual rankings based on more than 3.5 million data metrics in order to track the total globalization of the 169 nations included within the rankings.
The rankings focus on two separate rankings for each nation’s GCI score. One is based on the amount of incoming data from the international flow of information, which is referred to as “depth.” The other is based on the global spread of where that data originated. The more nations, the wider the breadth or spread of incoming data. That is referred to as “breadth” in the GCI rankings.
Singapore, Hong Kong, Belgium, the Netherlands and Estonia lead the world in depth with the largest proportions of data flows that cross national borders. The UK, United States, Netherlands, Israel and South Korea are the global leaders in the breadth category.
The world-leading communications connectivity in Singapore means businesses and other entities that choose to do business there have all of the latest tools at their disposal. It also means the ability to make rapid global communications internally or with external business partners is never better than in Singapore.
You can initiate a very rapid and highly coordinated plan on a truly global scale while addressing important matters. The ability for remote face-to-face communications in real time makes Singapore an ideal locale for engaging in truly global endeavors.
Ease of Establishing Business
When it comes to setting up business in Singapore, it really is simple and very fast to do. It is possible to file paperwork one day and be an officially recognized business based in Singapore the next. That is because Singapore appreciates international commerce, big business, and enabling global economies to grow and foster great societies.
Singapore continually ranks at the top of The World Bank’s Ease of Doing Business report because of its business-friendly environment and efficient business foundations. Singapore offers exceptional intellectual property protections, has excellent supporting infrastructure and offers many great business incentives – including a very pro-business tax policy.
The World Economic Forum has cited Singapore’s innovation and economic incentives as the best in the world. Singapore has a flat 17 percent corporate tax rate, which is much lower than most nations. Singapore also allows many tax incentives that help to reduce corporate tax liabilities, such as a 75 percent exemption on the first $100,000 of business income and other tax incentives that are designed to help entrepreneurs successfully found new business ventures.
By comparison, the U..S. recently had a 35 percent corporate tax rate that in 2017 was lowered to 21 percent. A recent change in control of the U.S. federal government means that corporate tax rate will go up. Early proposals suggest a 28 percent rate or higher might be enacted by the end of 2021.
Singapore’s Three-Step System
Founding a business in Singapore is a very simple process that you can complete in 1.5 days, per The World Bank. The first step to founding your business entity is to choose the name and register the business entity with Singapore’s Accounting & Corporate Regulatory Authority (ACRA). You can form a private limited company in a matter of hours, and Singapore has the added benefit of limiting investor liability to no more than their actual investments in the business entity. That helps to encourage new investment and the entrepreneurial spirit.
The second step is to structure your Singapore company to conform with the national standards there. ACRA must approve of the entity name, and you need to name at least one shareholder who is legally accountable for the entity.
The business entity must have a board of directors with at least one director being a resident of Singapore. A company secretary also must be a Singapore resident and helps to affirm the business entity will appreciate and take into account Singapore’s best interests as well as the new entity’s best business interests.
The third step is to open a banking account and deposit money into it to at least show the intent of going forward with actual economic investment in Singapore. The business entity must have at least $1 in paid-up capital and a registered address to a physical office space in Singapore.
No post-office boxes or hotel suites will comply with the requirements for establishing an official business entity in Singapore. That helps to thwart fraud and money-laundering while ensuring the entity will make a true investment in the national economy.
Easy Access to Credit and Capital
A new business entity cannot succeed without capital or credit to get everything rolling smoothly. The initial investments requires to establish a physical location, appoint directors and hire executives, managers and staff all prove overwhelming for most start-ups in the United States and other nations.
Singapore does a better job of aiding new business interests. Obtaining business loans and operating capital is much easier in Singapore, which ranks among the world’s best locales for obtaining business loans and capital to establish a successful business.
Singapore has a very robust economy and plentiful channels to obtain credit and capital for establishing truly beneficial and successful global business interests based in Singapore. It provides great protection for minority investors, which enables the raising of capital to pay off loans and other business credits needed to get started in Singapore.
Low Corruption and Ample Legal Protection
Perceived corruption and legal protection of intellectual property are two major factors in deciding where to establish a global business entity. Singapore ranks at or near the top in global surveys that affirm the island nation runs to tight ship and does not harass business entities or others with corrupt practices.
Singapore also recognizes and strictly enforces intellectual property rights and laws. When you set up shop in Singapore, you know exactly what the guidelines are and are not subject to unpleasant surprises. You enjoy plentiful benefits in a wholly pro-business environment.
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