Singapore

Ease of Doing Business Rank: 2

Geographic location

Singapore is an island city-state, just off the southern tip of Peninsular Malaysia in Southeast Asia. It lies 85 miles north of the Equator and consists of over 60 islands and islets. West Sumatra (Indonesia) lies to the west and Borneo lies to the east.

Spoken language

Singapore has four official languages: Malay, Mandarin, Tamil, and English. Malay is the national language, but English is the most widely spoken and the most commonly used in business. Most Singaporeans are bilingual and can speak English and their native tongue.

Population

The 2019 population estimate for Singapore is approximately 5.71 million inhabitants. Most of its citizens live on the capital island, while the remainder live on the dozens of surrounding islands.

Popular industries

The top ten industries in Singapore are manufacturing, wholesale and retail trade, finance and insurance, business services, other services industries, transport and storage, construction, accommodation and food services, other goods industries, and utilities.

Education

Singapore’s education system is one of the best in the world. The country consistently ranks near the top of the OECD’s Programme for International Student Assessment rankings and was number one in 2017. Students scored highest globally for math, reading, and science.

Singapore also has two highly-ranked universities. The National University of Singapore ranked 11th in the world and Nanyang Technological University ranked 12th. NTU also ranked as the best young university overall for the fifth consecutive year.

Popular entity types

The most common business entities in Singapore are Sole Proprietor, Partnership, or Private Limited Company.

According to Statistics Singapore, most new businesses are limited companies, followed by sole proprietorships, and finally partnerships.

Singapore incentives for business

Singapore is a very business-oriented country and offers many incentives for specific industries and activities. The Pioneer tax incentive provides a tax exemption for between 5 and 15 years for companies manufacturing high technological products and services.

The Development and Expansion Incentive kicks in after the Pioneer period and involves a minimum reduced tax rate of 5 percent for up to 10 years. However, qualifying products and activities may benefit from this incentive for up to 40 years, including the Pioneer period.

The Investment Allowance is a tax exemption on profits calculated by a percentage of capital expenditure up to a maximum of 100 percent for up to 5 years (8 years in some cases), including capital expenditure incurred for productive equipment placed overseas.

Singapore also provides a double tax deduction incentive for expenses for market expansion and investment development activities when companies expand overseas, including manpower.

Other notable incentives include the Intellectual Property Development Incentive which encourages R&D activities and the Productivity and Innovation Credit for the acquisition or leasing of prescribed IT and automation equipment, staff training, IP, R&D, and design.

Foreign entities may also qualify for a mergers and acquisitions allowance, financial services incentives, the Global Trader Programme, and many other tax credits and incentives.

History & Features

Main business areas

The Central Business District of Singapore is the center of commercial and financial activities. It lies between the Singapore River, Marina Bay, and Chinatown.

The Jurong Lake Western Business District is a secondary business district with convenient connections to the city and Malaysia and excellent access to high-value industries.

Popular historical & tourist attractions

Singapore is a bustling, vibrant city-state with countless historical sites and tourist attractions.

The iconic Marina Bay Sands complex is the focal point of the bay featuring a science museum, casino, dining, and nightlife. Equally stunning is the riverside Clarke Quay development packed with bars and restaurants, boutique shops and nightclubs.

The futuristic architectural wonder of the Gardens at the Bay include a breathtaking skywalk and stunnng gardens. Stroll through Chinatown or shop Orchard Road for goods from around the world. Take a ride on the world’s largest observation wheel, the Singapore Flyer, which is 30 meters taller than the London Eye.

Historical attractions include The Kranji War Memorial honoring those killed in the line of duty during the World War II and the Indian National Army monument to commemorate the 50th anniversary of the end of the war. Other engaging historical sites include Fort Siloso and a Battle Box beneath Fort Canning Hill.

The National Museum of Singapore features engaging interactive exhibits of historical, cultural, and social issues. The Mint Museum of Toys boasts of more than 50,000 vintage toys, of which some are as old as 120 years.

Singapore also has many stunning places of worship including a Sultan Mosque, the ornate Sri Veeramakaliamman Temple, or one of Singapore’s oldest Chinese temples, Thian Hock Keng.

History

Sir Stamford Raffles of the British East India Company founded modern Singapore in 1819. He recognized Singapore’s strategic location on the major sea spice route between India and China and established a free-trade harbor that attracted Europeans, Malays, Chinese, Indians and Arabs.

By 1867, Singapore became a Crown Colony ruled by the British government and an important commercial and military center of the British Empire. After the construction of the Suez Canal in 1869, Singapore became an even more important gateway between Europe and eastern Asia.

During World War II, the Japanese conquered Singapore, but the British re-occupied the territory when the war ended. Singapore began a slow journey toward independence and began self-government in 1959.

During the following decades Singapore experienced rapid growth and residents enjoyed a high standard of living, however it operated under an authoritarian regime. The regime changed and under the guidance of Cambridge-educated lawyer Lee Kuan Yew Singapore began an aggressive campaign to promote industrialization, manufacturing and export. By the late 1970s, the government shifted their focus to information technology.

Singapore’s financial services sector and international connections also grew rapidly. By 1990, Singapore had more than 650 multinational companies and several thousand financial institutions and trading firms.

Today, Singapore is a powerful global financial and multinational center due to its transparent and sound legal framework and economic and political stability.

Other relevant facts

Singapore is a very diverse religious state that includes Buddhism, Taoism, Islam, Hinduism, Sikhism, Christianity, and more. Almost half the population practice Buddhism or Taoism, followed by Christianity.

Singapore is also ethnically diverse. The largest portion of the population is Chinese, followed by Malay, Indian, and other ethnicities.

Additional Information for Business

According to Forbes’ 2019 Best Countries for Business, Singapore ranks 8th globally due to its “open and corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries.”

The 2019 Index of Economic Freedom rates Singapore number 2 globally and states, “The government has continued to promote economic growth through an active industrial policy that targets fiscal incentives, increases public investment, promotes development of skill sets attractive to foreign investors, and focuses on economic diversification.”

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