Establishing Business in Singapore
Starting your own business requires great preparation and careful planning. Choosing the type of product or services you want to offer and examining your target audience is vital in the early stages of your research.
Singapore became the world’s fourth largest FDI entry recipient in 2018, after the USA, China, and Hong Kong. According to UNCTAD’s revised figures, FDI inflow increased from $75.72 billion a year ago to $ 77.65 billion in 2018 from its highest level to date. Singapore is also a major investor abroad and has sought to expand its investment beyond its traditional target markets in Asia, China, India, and Vietnam in recent years. The main investors in Singapore are the US, British Virgin Islands, Cayman Islands, and the Netherlands.
Financial and insurance activities are the main recipient of foreign investments and account for 54.5% of all foreign direct investment stock.
Singapore based its economic development on a proactive strategy to attract foreign direct investment by using trade openness. Since the World Bank’s Doing Business ranking was first published in 2003, the country has always been the leader until 2018, when it was undertaken by New Zealand. The country retained its second position in 2019. Being available to lend to foreign investors, a simple regulatory system, tax incentives, a high-quality industrial property park, political stability and lack of corruption make Singapore an attractive place to invest. Hina is the largest FDI buyer in Asia and the second-largest buyer in the world. The rapid development of the high technology sector, the establishment of free zones, and liberalization plans created
steady growth. This all-time growth was despite trade tensions with the United States. Although these tensions lowered US investment, China managed to maintain its position and continued to grow.
In this issue, you can find everything you need to know about Singapore’s business environment.
• What should you consider?
• Protection of Foreign Direct Investments in Singapore
• Investment Aids
• Sectors You Can Invest in Singapore
• General Information
What Should You Consider?
Singapore has been recognized by the World Bank as one of the best countries in the world for ease of doing business for many years. The workforce is one of the most qualified in the world and consists of many expatriates, which is diversified, flexible, and incredibly open to international functions. It has high-value-added sectors (such as ICT, finance, chemistry, and pharmaceuticals) very well developed. Financial infrastructure (robust banking system), telecommunications, and transportation are in excellent condition. Its strategic location at the intersection of maritime routes and close to major emerging markets (in Asia and the Middle East) makes
it an important hub for regional and international trade. To attract more and more FDI, the country is working to maintain an attractive tax regime and offers tax cuts and facilitated credit terms and other investment incentives.
Although Singapore has its downsides, it also has downsides. Singapore’s national economy is very dependent on exports and therefore vulnerable to the state of the economies of its main trading partners and the world economy. Like all developed countries, the country faces an aging population and a “soft” growth, which forces the country to find new growth factors. Getting more and more FDI each year, the government enforced many rules, and getting a work permit is getting more and more difficult, and even though Singapore is a free port, tariff protection for industrial businesses, the company set up a business in China without fear.
Foreign investors opening their first company in Singapore can be assisted by institutions like the Singapore Trade Development Board (STDB) that promotes FDI and exports and the Economic Development Board (EDB) that provides different incentives for foreign businessmen setting up companies in the city. Apart from the industries mentioned above, the government strongly supports the manufacturing and services sectors which are part of its policy to replace the low-valued labor activities that were moved to China. Singapore has three free trade zones (FTZs) that provide the same opportunities for local and foreign companies. Enterprises can use the free trade zones for storage,
repacking and export activities.
Singapore is one of the few countries in the world to provide for industry-specific tax deductions and incentives. This is also one of the facts that makes Singapore very appealing for foreign entrepreneurs.
Among the industries which benefit from assistance schemes is the financial and banking industry with incentives for both resident and non-resident investors. Among these, the Withholding Tax Exemption Regime for Banks is one of the most appreciated by foreign entrepreneurs who can obtain an
exemption for interest payment and other qualifying incomes related to their businesses in Singapore.
Recognized as one of the most important maritime centers in Southeast Asia, Singapore also offers several incentives to those setting up maritime companies there. Among the most popular benefits granted to Singapore companies in this sector, the Maritime Sector Incentive which provides for tax
concessions for up to 10 years is quite important.
Protection of Foreign Direct Investments in Singapore
Singapore is open to foreign investment and offers tax benefits that businesses can take advantage of once registered with the Economic Development Board. The government constantly provides public investment to the national economy. Examples include transport infrastructure projects (such as the high-speed train line between the city-state and Kuala Lumpur) or
programs that encourage transfer to the future economy. In 2017, the government mobilized $ 8 billion (about 2.5% of GDP) to increase
productivity and increase innovation across 23 associated industries in growth sectors. The biggest obstacle to FDI is that the country continues to hold monopolies in certain key sectors (financial services, professional
services, media, telecommunications). Government-related initiatives play a
dominant role in the domestic economy and, accordingly, investment.
Sectors You Can Invest in Singapore
Singapore is considered a financial center in Southeast Asia and is home to a variety of businesses. The country’s economy is dependent on trade, so it raises the level of innovation and entrepreneurship. With advanced technological innovations, growth in various industries varies from sector to sector.
Despite its small domestic market and lack of natural resources, Singapore was successfully worn down by the 1997 and 2008 financial crises. Today, the Singapore economy is consistently one of the most stable in the world, with foreign debt, high government income and. positive plus.
Here is a guide on some of the fastest-growing industries in Singapore to help you identify the path you want to follow:
Globally, the manufacturing industry has transformed into a new era of smart
manufacturing. China is boldly responding to this transformation to increase its position in the global value chain and improve its competitive standing in the world. The smart manufacturing output value of China Production in 2015 was around RMB 1 trillion It is expected to exceed RMB 3 trillion by 2020, with an average annual growth of 25 percent over the next five years.
Specialized manufacturing companies in the mass production of technology products and product components robots to push and increase against rising wages competition.
Both traditional manufacturers and technology companies take advantage of this opportunity by gaining new opportunities. Mergers and acquisitions targeting the automation sector have grown rapidly in the last five years. In
2015, Chinese companies announced 36 deals with a total value of the US $ 2.4 billion, including Alibaba’s acquisition of Softbank Robotics (the US $ 235 million).
Singapore is a financial hub that makes it vital to increase the benefits and leverage of fintech disruptors. Technology is developing rapidly and has led to segments such as online product management and digital marketing. This means that the financial segment and technology are used together.
In the last few years, Singapore has witnessed a cornification of several fintech startups, and the momentum does not seem to be waning. The growth of the fintech industry is due to the increasing demand for individuals who know
about financial markets and products.
Some of the initiatives leading the burgeoning fintech industry include Trade Hero, Money smart, and Flywire. Over the years, these initiatives have gained popularity in educating people about financial matters. They offer all readers
reviews of credit cards, loans, cost guides, and financial policies.
-Health and Fitness
The fitness area in Singapore has evolved significantly over the past decade. People move from traditional gyms and look at different fitness options. Nowadays, people are turning to boutique fitness, which offers many innovations in the sector. With technology startups growing in Singapore, it is now easier to innovate and develop user-friendly fitness apps that allow people to try a variety of workouts in different disciplines. Singaporeans are looking for more diverse and newer fitness options these days. Boutique fitness businesses are more likely to be successful than ever.
What is more, the 2016 closure of California Fitness, one of the fitness industry’s biggest players in the country, opened more room for smaller, boutique players in the fitness industry. Tech startups such as KFIT and
GuavaPass have also paid off the Singaporeans’ passion for sampling and innovation by allowing users to sample a wide variety of fitness classes across many disciplines. Thanks to increased wealth with health and fitness, especially from the rich PMET demographic, the fitness landscape in Singapore seems poised to grow further. It could also have a spillover effect on the retail industry, where fitness-related products such as fitness trackers and
sports equipment are becoming more profitable.
-Energy and Infrastructure
Singapore is very important in Asia as it is both the primary center of oil trade and pricing center in Asia. The oil industry alone contributes about 5% of the total gross domestic product (GDP). This high contribution is that Singapore is among the top three global countries with export refining centers. In 2017,
the country’s oil exports were around 68.1 million tons. As a result of the oil-exporting sector, other sectors such as the chemical industry and manufacturing of gas and petroleum equipment have also been promoted.
Looking at market share, 70% of the world’s need for conversion of jacking equipment and Floating Production Storage Unloading (FPSO) units is met by Singapore. As of 2007, around 20% of the world’s ship repair needs are met by
Singapore, which translates into the jobs of around 70,000 people. To further improve the sector, the country is expanding underground caves that store oil products. By expanding the industries, there will be more opportunities for
investors in the industry from around the world.
However, the oil sector is not fixed like all other sectors. In the last three years, there has been a decline in the sector leading to a decrease in the number of projects. However, new projects are expected with anticipation that
the next two years will be better.
The Republic of Singapore (Republic of Singapore) is a city-state located on the island of Singapore in South East Asia and 58 neighboring small Islands located at the southern tip of the Malay Peninsula. It is bordered by Malaysia and Indonesia (on the island of Riau). The name Singapore comes from Malay Singh (lion).
The area of Singapore is 710.2 km2 and about 10% is man-made. This is one of the smallest countries in the world (ranked 175th in the world by region). For comparison, the area of Moscow – 1000 sq. Km State area is increasing at the expense of “reclamation area”.
Despite its small size, Singapore has one of the leading economic roles in the Asian region. Gross national product per capita is one of the highest in the world.
The tourist season lasts year-round in Singapore. Some tourists delay their travel to the country due to the rainy season (November to January), but to no avail. Rains during this period are even higher but short, and during this time the temperature is slightly lower and easier to transport.
Singapore is a tropical monsoon climate just 2 degrees north of the equator.
Seasonal changes and severe temperature fluctuations here throughout the year. Daily temperature fluctuations are also minimal. Average monthly temperature:
In December and January at night 30 ° C at night 24 ° C.
• 32 ° C at night and 26 ° C at night for the rest of the year.
In general, the rainy season and the dry season in Asia were almost not felt. The rainy season occurs between November and January, but the difference in precipitation between seasons is small. The maximum size of precipitation (300 mm) occurs in December and the minimum (140 mm) in June. The sun shines almost all the time, only interrupted by short but abundant rainfalls. The effects of the rain disappear within an hour. Only occasionally, in the rainy season, rain can last all day.
The humidity here is traditionally extremely high, up to 90%.
Singapore’s four official languages: English, Chinese, Malay, and Tamil. English, the most popular and official language of government agencies. Approximately 80% of the population of Singapore can speak English. Anywhere, wherever you are in Singapore, you understand English.
According to 2010 data, the population of Singapore was 5.1 million people. Singapore ranks second in the world in population density after Monaco. Most of the population is China – 76.8%. Malaysians of different origins account for 13.9 percent. Immigrants from India make up 7.9%, most of them Tamils, fewer Malayali, Punjab, and Bengal. Small groups are Arabs, Jews, Thai, Armenians, Japanese, and mestizos (Eurasians).
Singapore’s population uses different religions. The most common religion is Buddhism, supported by 33% of the population. 18% Christian. At least the spread of Islam and Taoism. 17% are atheists.