Business Climate
Singapore’s open economy and excellent strategic location in Southeast Asia make it a very attractive business hub for companies who want to build their presence in the ASEAN (Association of Southeast Asian Nations) region and have access to its many free trade zones.
The city-state of 5.69 billion people is located where major East and West shipping lanes converge and is one of Asia’s largest trading hubs. This, in addition to its stable political environment, low taxes and highly skilled workforce contributes to Singapore’s consistent rating as one of the most favourable business locations in the world by the World Bank.
Singapore is a global financial hub, but the city is also known for its diverse business ecosystem, which is a generator for ideas and innovation. Testament to this is the city’s vibrant start-up scene. Singapore actively supports Start-Ups through tax exemptions. The Start-Up Tax Exemption (SUTE) scheme was introduced in 2005 to support the growth of new business and entrepreneurs in the country. Companies that do not qualify for SUTE may benefit from other Partial Tax Exemption schemes or business support initiatives.
Many international entrepreneurs find the combination of Singapore’s low taxes, pro-business environment, high living standards, impressive education system (of both local and international schools) and strategic port, the perfect English-speaking gateway to the ASEAN market.
Sectors
Trade has always been a consistent economic driver for Singapore. But the growth of its business services and a market-driven economy have become determining qualities that made Singapore become the fourth largest business centre in the world.
Apart from being one of the main financial and economic hubs world-wide, Singapore is a strong, export driven economy focussed on electronics, technology, and pharmaceuticals.
In recent years Singapore’s economic landscape has developed into one that stimulates knowledge-based and research-intensive industries. Significant growth and development can also be seen in the biomedical sciences, clean technologies, and interactive digital media industries.
Growth
Singapore is an advanced, successful, free-market economy that scores persistently high on the Corruption Perceptions Index, meaning its government, business, and society experience little or no corruption.
The city is globally connected with a strong and stable infrastructure that is equipped and keen to encourage growth across industries. The government offers many grants and other business support initiatives to encourage development in digitalization, innovation and fintech across sectors.
Singapore is already the world’s 4th largest global exporter of high-tech goods, and the government wants to further boost advanced manufacturing capabilities through investing more than S$3 billion over five years through its Research, Innovation and Enterprise 2020 plan.
Companies from all over the world are wanting to capitalize on the enormous increase in business opportunities across the ASEAN region and often choose Singapore as a hub because of its maturity, strategic location and low trade barriers with other ASEAN countries.
At this point in time, the progressive easing of Singapore’s domestic and border restrictions as its vaccination rates continue also makes it one of the most accessible hubs in Asia from which to do business, further stimulating its growth.
Setting Up
Corporate formations available in Singapore to foreign investors:
Private Limited Liability Company
- Incorporated by at least one director (Singaporean citizen, permanent resident, EntrePass or Employment Pass holder).
- Must have a local auditor and a local registered office which must be a physical address and not just a Post Office box.
- Must have at least one shareholder (resident or non-resident). Details of the company’s directors, secretary and shareholders must be filed at the Companies Registry and are on public record.
- All companies must obtain a Business Registration Certificate from ACRA (Accounting and Corporate Regulatory Authority)
- All companies and are required to file a set of audited accounts and tax return annually with ACRA once the company has commenced business. Penalties apply for late filings.
Branch/representative office
- Branches and representative offices of foreign companies in Singapore are considered legal entities and need to be registered at ACRA.
- The foreign parent company is fully liable for the branch’s actions
- The branch can engage in the activities of the foreign company
- Local activities in which the branch can engage in Singapore are limited to those performed by the foreign company.
- The branch can undertake commercial activities and derive profit in Singapore
- The representative office may not conduct commercial activities and is only used for marketing and market research purposes.
Please click here for more information about:
Registering a company formation in Singapore
Clockwork Business Support Services