Singapore’s pro-business environment has established itself as a global business hub. That is why it attracts investors worldwide. Its exceptional infrastructure, taxation policies, and economic progression foster a thriving business ecosystem. Moreover, Singapore’s extraordinary air connectivity makes it a gateway to the global market.
The country’s excellent infrastructure, including its connecting network, provides a strong foundation for businesses to thrive in the digital age. This article will explore five compelling reasons why Singapore’s infrastructure sets it apart. Besides, we’ll look at how it makes the country an attractive destination for foreign investors.
Last but not least, Singapore is also leading in Asia’s sustainability movement with its groundbreaking green plan 2030.
1. Robust Economy and Political Stability
Singapore is second on the list of highest-rated countries in Corporate Governance. The biggest reason behind it is the country’s political stability. The continuous dominance of PAP since 1959 has ensured that the corruption rate has dropped down to zero. A state with such a powerful ruling party and zero corruption policies is ideal for any foreign investor around the globe.
Thanks to the efforts of its dominant ruling party, the country is thriving economically. That is one of the main reasons why Singapore’s pro-business environment is home to 7000 foreign investment companies.
To attract more FDIs (foreign direct investments), the country has put most of its economic effort into creating helpful policies for international investors. These policies include loans for foreign investors, pro-business legislation, and Economic Development Board (EDB) incentives. Here are a few testaments of Singapore’s productive economy:
- 15% increase in FDI stock in 2021.
- 37400 companies are operating in Singapore, out of which 7000 are multinational firms.
- 36000 US employees are working in Singapore all due to its progressive economy.
- In October 2021 US-Singapore Partnership for Growth and Innovation agreement was signed, which is the latest proof of prospering economies of both countries.
2. Attractive Location and Air Connectivity
If we look at the map, it is pretty clear that Singapore is one of the most incredibly connected countries in the world. In 2019, World Bank’s Doing Business issued a report reviewing 189 economies worldwide. In that report, officials named Singapore the world’s best place to do business. That is why it is considered that the country has a strategic position in the heart of Southeast Asia, offering unparalleled access to regional and global markets.
Furthermore, Singapore greatly became a centralized business hub using aviation routes and shipping patterns. BusinessTimes stated in their recent report that the Singapore Changi International Airport handled 31.9 million passengers, which proves its great air connectivity. According to recent statistics, the airport also runs more than 100 international airlines connecting to the world’s 160 countries. With a business-friendly environment and efficient logistics infrastructure, Singapore acts as a springboard for companies seeking to expand their regional presence.
Another factor impacting the country’s territory value is the type of business already running in it. As per SATS data, Singapore is home to many logistics firms, such as UPS and FedEx. This extensive network enables seamless travel and efficient business operations for investors and their teams. In addition, this vital air freight infrastructure enables foreign investors to manage their supply chains effectively, facilitating the timely delivery of products and services to regional and global markets.
3. Business-Friendly Taxation Policy
Singapore is the #1 best business environment globally, specifically in Asia Pacific. Don’t take our word for it; Business Environment Rankings 2023 stated it in their recent report. While there are multiple reasons for that, Singapore owes all its fame to transparent and investor-friendly taxation policies. Some significant ones include:
- Not Ordinary Resident Scheme: Five-year favorable tax treatment in which tax deductions are lower than expected.
- Avoidance of Double Tax Agreements: According to this policy, the same income won’t be taxed twice in two countries.
- 0-22% income-tax policy: Lower income tax for international investments.
One of the leading reasons for meager taxes is Singapore’s direct affiliation with ASEAN. AESAN is a vibrant market with a combined population of over 650 million that strives to improve the economy of its associated countries. As Singapore is its major part, ASEAN helps the government to reduce the tax barrier. As a result, it increases the deduction-free trade flow between nations.
Thanks to the territory-based taxation policy, any company with an account outside Singapore is not subjected to any tax deduction. As for the dividends payments, you won’t have to pay a single penny whether you are a resident or not. Additionally, Singapore’s pro-business environment offers a competitive range of personal taxes.
The rates start at 0% and end at 22% for every resident with a $320,000 net worth. However, the value range for non-residents is 15% to 22%. Furthermore, there are no capital gains or inheritance tax regarding personal deductions.
4. Cutting-edge Talent Pool
Singapore has been a hub for foreign investment for two decades. This long duration has trained the local workforce of the country to adapt themselves to foreign investors. The government has prioritized education and skill development, resulting in a highly educated and adaptable workforce.
That is why Singapore’s cutting-edge talent pool is a significant asset contributing to its reputation as a top destination for foreign investors. Furthermore, the top-of-the-notch talent pool inside Singapore can provide all services that a revenue-yearning foreign investor needs. Here’s why Singapore’s talent pool is the best:
1. Language Gap
The most significant gap in any international investment is the language. Singapore’s workforce ideally breaks this barrier as the employees are highly competent in English. This helps the workers understand the whole business concept easily. The better they know it, the greater and more beneficial output they’ll supply you.
2. Excellent Ethic and Professionalism
Singapore’s talent pool is known for its strong work ethic, professionalism, and skills. The local workforce has been trained to embrace diversity and work effectively with individuals from different backgrounds. That is why it becomes easier for foreign companies to integrate and establish a cohesive working environment.
3. Government Tasks for The Workforce
The Singaporean government supports talent attraction and retention through various programs and actions. These include grants and incentives for companies to hire and train local talent. Plus, it contains schemes that facilitate hiring foreign professionals with specialized skills. The government’s focus on nurturing and sustaining a highly skilled talent pool ensures foreign investors access all the resources.
4. Diverse Skill Set
Lastly, Singapore’s talent pool possesses diverse skills and expertise across various industries. The country has invested heavily in vocational training, technical education, and research institutions, producing a skilled workforce in finance, technology, engineering, healthcare, and more. This diverse skill set allows foreign investors to find the talent needed to support their business objectives and industry requirements.
5. Exceptional Infrastructure
Singapore’s infrastructure is a solid foundation for businesses to flourish and provide numerous advantages for foreign investors. The country has an enterprise ecosystem that helps companies gain synergies through digital and physical means. It has multiple agencies working day and night to assist foreign investors, such as EDB (Economic Development Board).
Moreover, the government has created nine free trade zones (FTZs) scattered around the country, bringing foreign and local companies to the same table. Foreign enterprises can use this opportunity to store, export, and repackage their goods in a better and more optimized way.
While the country’s physical development infrastructure is one of a kind, the digital framework doesn’t hold back either. Its extensive fiber-optic network provides high-speed and reliable internet connectivity. Therefore, it facilities seamless communication and data transfer.
Singapore’s commitment to digital transformation is further evident in its widespread adoption of 5G technology and enhanced IP protection. This advanced digital infrastructure empowers foreign investors to leverage the latest digital tools and technologies to compete in the global market.
Conclusion
Singapore’s pro-business environment stands out as an ideal destination for foreign investors. There are multiple reasons behind it. The combination of various causes and exemplary actions contribute to its appeal. Furthermore, Singapore’s strategic location makes it an attractive gateway for international business ventures. As foreign investors seek opportunities to grow and expand their operations, Singapore offers a supportive ecosystem that facilitates success.
Whether it’s seamless connectivity, reliable utilities, or a talent pool, Singapore sets the stage for everything. By capitalizing on the advantages of Singapore’s pro-business environment and exceptional infrastructure, investors can tap into a world of opportunities and unlock their full potential in this dynamic business landscape.
