Wednesday, February 28, 2024

Why Singapore is ideal for international business

A thriving city-state in Southeast Asia which has earned its reputation as a global business hub, Singapore has a compelling proposition for international companies looking to establish their presence in Asia.

With a strategic location, robust infrastructure, supportive business policies and favourable corporate taxes, doing business in Singapore has become a milestone for many. In fact, the small yet powerful country has held the title of the best place to do business for a decade by the World bank.

And international expansion has never been easier. Their seamless banking system and talented manpower has allowed for minimal difficulties.

So without further ado, let’s delve into why Singapore is ideal for international business.

Corporate taxes

Often the first and most talked about advantage of doing business in Singapore are the favourable corporate and income tax rates.

Interestingly, some of the highest salaries in all of Southeast Asia are in Singapore and their unemployment rate is also low. 

Singapore has a corporate tax rate of 17%. 

Companies are charged tax based off their income in Singapore and any foreign incomes if it is deemed as being received in Singapore.

As a reference, the average global corporate tax rate is 23.37%, placing Singapore in an advantageous position. 

  • United Kingdom: 25%
  • United States: 21%
  • Australia: 30% (this amount is 25% for small or medium businesses)
  • China: 25%

Strategic location & ease of setting up

The geographic positioning of Singapore couldn’t get any better.

The country is situated at the crossroads of major trade routes and it gives Singapore a unique proposition. This major factor is why businesses choose to expand internationally into Singapore, because of the vast access to to many Asian markets and consumers.

A graphic which illustrates the statistical advantages of doing business in Singapore.

There’s also the added benefit of phenomenal transportation and logistic structures in Singapore, which is particularly lucrative for those in the trades industry. There are currently 37,400 international companies which have their headquarters in Singapore, and this includes 7,000 multinationals – quite a significant number.

But the benefit of Singapore being an integral player in the Association of Southeast Asian Nations (ASEAN) doesn’t stop there.

The country’s free trade agreement which includes 21 bilateral and regional free trade areas, is looking to expand these policies with other countries. Either way, the costs for businesses to sell with neighbouring countries is a lot cheaper.

Additionally, business owners will find the process of setting up their firm in Singapore quick and easy. Research suggests that a company can be setup within one day as long as all obligations have been completed.

Growing economy

The consistent economic growth and stability of the country is a testament to conducting local, along with international business in Singapore.

In the ASEAN, Singapore has the stronger purchasing power parity and consistently ranks first. Even though the nation has a small population and landmass, it produces a GDP of 397 billion USD, with the number experiencing consistent growth.

Cultural balance

It’s important for businesses to appeal to the right target audience, and this if often achievable for most businesses who choose to expand in Singapore.

The country’s unique uniformity of the east and west blending together in one nation creates an ideal social fabric. The mix of Asian, American and European touches have made it easy for international businesses to find their foothold, regardless of how far away Singapore may be from their origin.

Incentives

If it’s not enough to have favourable corporate tax rates, phenomenal structure and more, then businesses will be pleased to know there are incentives for establishing headquarters in Singapore.

If you’re a multinational business considering to relocate your headquarters in Singapore, then the international headquarters incentive applies to your business. This includes extremely attractive tax rates which range from zero to 10%, making operations much more seamless from a capital standpoint.

The Singapore government have set these incentives in place to make it profitable destination for international businesses.

How to expand your business in Singapore

The formal business culture of Singapore has a strong emphasis on professionalism and respect. Hence your method of expansion plays a pivotal role in making a positive first impression, along with the likelihood of attracting new clients.

There’s two methods we recommend for expanding your operations into Singapore, and this is completely dependent on your goals.

Expanding with a virtual office

Businesses which are aiming to expand in Singapore with minimal risk, set-up time and low costs can opt for a virtual office. This is especially beneficial for a business which either has no team members in Singapore, or are looking to hire remote employees in Singapore.

Here’s a quick rundown of how it works.

Select an address: the address you select will be used for legally registering your business in Singapore and becomes your business address. The address can be used for marketing, mailing, websites and anything which requires an address for business purposes.

Virtual offices in Singapore are legal and the setup process is seamless.

When selecting your address, be sure to pick one which delivers a desirable impression of your business. For example, virtual office locations in CapitaGreen or Marina Bay Financial Centre will give an established and credible look.

Mail handling: any mail sent to your virtual office location is handled by a team of professionals, which can be redirected to any address of your choosing. Such as your original business location, or it can simply be scanned and sent online.

Receptionist: businesses receive their own bilingual receptionist to answer business calls as part of the virtual office. This is advantageous in a country such as Singapore, where multiple languages are spoken. The receptionist handles calls as instructed by the business owner and can take messages, redirect calls, answers inquires and more.

Local landline: a virtual office also provides a local landline number for the business. This number should be used as your contact point for all Singapore related business, and all calls to this number are handled by your receptionist, which are then redirected to the extension numbers you provide.

This ensures your local presence is credible.

All of this can be acquired from SGD $160 per month and can be leased on a monthly, half yearly or yearly contract. This ensures a minimal commitment period and low costs.

Expanding with a serviced office

Businesses which require a physical presence and office space for employees in Singapore can expand with a serviced office.

Similarly to the virtual office, the lease terms are flexible and require minimal commitments which mitigates a lot of the risk associated with acquiring commercial real estate. On top of this, the costs are much lower than a traditional office.

A businessman working from a serviced office in The Metropolis Tower 2, in SIngapore.
A serviced office in The Metropolis Tower 2, Singapore.

For example, a serviced office in The Metropolis Tower Two can be rented from SGD $2,250 per month, and there are many other serviced office locations in Singapore. And just like the virtual office, you have access to many amenities such as meeting rooms, shared kitchen, storage space, coworking lounges. You also have team support including a receptionist, IT and secretarial support.

Not only do businesses have a fully furnished office space, but they also have staff support without needing to pay salaries or train them.

Should my business expand into Singapore?

If your business has the capital to expand internationally and has a plan ready, then Singapore is a perfect destination. The world class infrastructure enables people to quickly setup their business without difficulty, and the low capital gains tax makes it more achievable to be profitable.

The corporate regulatory authority in Singapore is mindful of the significance it has over business structure, and consequently it makes the process of establishing your international headquarters seamless.

It’s also become easier to expand with the advent of virtual offices and serviced offices, which let businesses gain an international foothold with minimal risks or costs. Overall, Singapore is an attractive destination for international business.

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Worldwide Virtual Office Locations

 Australia – English
 Bahrain – English اللغة العربية
 Belgium – FRANÇAIS  Nederlands  English
 China – 簡体中文   English
 France – FRANÇAIS   English
 Germany – Deutsch   English
 Hong Kong – 繁體中文   English
 Japan – 日本語   English
 Kuwait – اللغة العربية  English
 Lebanon – English  اللغة العربية
 Malaysia – English  Bahasa Melayu
 New Zealand – English
 Philippines – English
 Qatar – English  اللغة العربية
 Saudi Arabia – اللغة العربية  English
 Singapore – English  簡体中文
 Thailand – ภาษาไทย  English
 Turkey – Türkçe  English
 United Arab Emirates – English  اللغة العربية
 UK – English
 United States – English