Why It Makes Sense To Invest And Live In Singapore

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In a short few years, Singapore has become an investor hub for regional and multinational corporations, becoming an economic bridge for industry leaders between the East and the West.

Ongoing economic investment backed by local government support has in recent times seen several major-league businesses and companies set up regional headquarters within the city-state.

Offering investors attractive incentives such as low taxes, political stability, and financial prowess, Singapore now boasts some 43% of Southeast Asia’s unicorns according to Mckinsey research. What’s more, since 2018, roughly 40 corporate ventures have successfully launched in the country, only further growing the nation’s economic influence on the global stage.

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Experiencing major economic tractions has seen a surge in new developments scattered around the city, leading to an influx of foreign investors hoping to scoop up lucrative investment opportunities in a country that provides economic and political stability.

The regional success of Singapore has led to international claims, giving business tycoons and venture capital magnets a seat within one of the fastest-growing economies in Southeast Asia.

A Central Financial Hub In Asia

Singapore holds a steady position among other well-known financial centers, becoming one of the largest and most influential financial hubs in Asia-Pacific and the third largest in the world.

Falling only behind New York and London, and ahead of Hong Kong, Singapore is now considered to be one of the most thriving financial hubs for businesses and corporations according to the Global Financial Centre Index 2022.

Among its many achievements, Singapore has been ranked third in terms of forex turnover by country, fourth for the total number of mega-wealthy residents, and third best for financial secrecy. Not only this, but attractive corporate tax rates - 17% - are nearly 9 percent lower than in other places such as the United States.

Improved tax regulations and policy infrastructure has given the country a step above the rest and helped the nation outpace other leading finance hubs in Pacific Asia.

An Economic Bridge For Companies

As we’ve already mentioned, Singapore has become a gateway for businesses to the Southeast Asia region. This however was not done without seeing hefty investments coming from government programs and economic development strategies.

Back in May 2021, Singapore's Economic Development Board (EDB) introduced a Corporate Venture Launchpad, or CV Launchpad for short.

At the time of induction, the launchpad program allocated roughly S$10 million or US$7.4 million to help support qualifying regional companies. The pilot program was an effective tool that helped new corporate companies build ventures more effectively.

After the pilot program's initial success, the Ministry of Trade and Industry (MTI) announced that these efforts will now be extended to other companies as well, helping increase the pool of potential qualifying companies.

The success has meant that Singapore currently sees more than 700 family offices scattered across the city, including some high-profile regional names and multinational firms.

A Transparent Environment For Businesses

Another aspect that makes Singapore worth considering is its highly transparent business environment in terms of corruption perception.

The Lion State was ranked as the fifth least corrupt country in the world out of 180 countries according to The Transparency International (TI) Corruption Perceptions Index (CPI) 2022. Until now, Singapore has continued to be one of the only Asian countries to be ranked within the top ten.

Furthermore, the Corrupt Practices Investigation Bureau (CPIB) in 2022 indicated that the number of public sector corruption cases has remained relatively low, which in turn has made the nation a well-performing contender among other incorruptible countries.

Out of 16 Asian economies, The Political and Economic Risk Consultancy (PERC) ranked the city-state as the least corrupt country, a position it has held since 1995.

The absence of corruption, strong transparent laws and judicial infrastructure, and ongoing development to improve its incorruptibility has made Singapore a hub for business practices and operations, among other benefits.

Growing Investment Opportunities

Aside from the country’s dynamic business and corporate landscape, other aspects such as investment opportunities and growth have also made Singapore a prime location for offshore wealth investment, both for private and public entities.

Some prominent investment vehicles in the country include Singapore Savings Bonds, Corporate Bonds, and exchange-traded funds geared towards real estate, financial and industrial.

Foreign direct investment in real estate and property has in more recent years skyrocketed, as the country offers not only an array of real estate investment opportunities, but ongoing development has made it more appealing for investors alike.

According to figures by Statista, as of 2021, more than S$ 44.17 billion - more than US$ 33 billion - foreign direct investment deals were made in the real estate sector. This only further shows the magnitude at which the country is steaming forward, captivating investment audiences from around the globe.

Jae Hei, a real estate advisor at J’Den Condo, formerly known as JCube, mentioned that foreign investment in real estate not only helps the local economy, but it’s also helping to put the country on the map and stand out against other leading economic contenders in the developed world.

Over the last few quarters, property prices increased by 4.1% Quarter-over-Quarter (QoQ), while Year-over-Year figures jumped by 13.2%. While construction of planned residential units has come down from 90% to 78%, demand for residential and commercial real estate units remains steady.

Progressive Tax System

One can argue that tax regulations remain one of the biggest considerations for investors, business leaders, and those looking to relocate to another country.

However, in Singapore, attractive and seemingly progressive tax regulations have made the country one of the most appealing destinations for expats and investors.

Currently, tax rates range between zero percent and 22%, with the most notable being the flat corporate tax rate of 17%. What’s more, there are currently no taxes on capital gains, inheritance, and estate duties, and investors are exempt from having to pay stamp duties in scriptless shares listed on the Singapore Stock Exchange.

The government recently introduced a global minimum effective tax rate of 15% for large regional multinational enterprises, which will come into effect in 2025.

The move comes after several developed countries have agreed to impose a global minimum tax rate for multinational firms, to help level out the playing field and ensure more transparent tax regulations for corporate leaders.

Incorporation Regulatory Framework

Business owners looking to relocate their businesses to Singapore, or better yet, incorporate their company in the country will need to submit and register the relevant information to the Accounting and Corporate Regulatory Authority of Singapore (ACRA).

Although it may seem like one of the more tedious challenges for business owners, incorporating a business in Singapore is a lot easier than one might think, and the government has outlined several important procedures to make the overall process more convenient.

Allowing business and corporate firms to incorporate their operations within the country not only gives them access to the seemingly lucrative financial opportunities presented in Singapore but also gives them better accessibility to businesses in the Asia Pacific region and connects them to other growing economies in the East.

There are however several procedures that will need to be completed for a business to become incorporated here, but it would be considered a long-term investment for business prosperity.

An Entry Point To Business Opportunities In Asia And Asia Pacific

Singapore’s location in Southeast Asia makes it a gateway for businesses to the Asia and Asia Pacific region.

Being located so close to other financial hubs, including China, Australia, the Philippines, Malaysia, and India gives business owners and industry leaders better opportunities to tap into existing markets while using Singapore as a launchpad to do so.

The country has become a hub for international trade in recent years. Over time, Singapore has grown its network of free trade agreements to roughly 27 implemented agreements.

Some of these include Australia-New Zealand Free Trade Area (AANZFTA); China Free Trade Area (ACFTA); Hong Kong, China Free Trade Area (AHKFTA), and Japan Comprehensive Economic Partnership (AJCEP); and Korea Free Trade Area (AKFTA), among others.

Groundwork is also being laid for the Singapore-India Comprehensive Economic Cooperation Agreement (CECA), which would help the country further strengthen its ties with the Indian government and local economy.

To Finish Off

The small island-state packs a sizable punch when it comes to economic and financial quality for businesses and trade. Progressive policies and regulations have meant that the country has quickly become one of the leading financial hubs in the East, but also on the global stage.

The country’s strong devotion to economic independence and thriving markets create the perfect conditions for investors, corporate organizations, and investors seeking economic refuge in a time when globalized economies are stumbling and political instability is further dragging down growth.