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Singapore: World Bank Ranks Singapore Easiest Place to Do Business
The recent 2011 Doing Business Report issued by the World Bank revealed that Singapore has yet again emerged as the world's easiest place for doing business and ranks number one in the world. No doubt, this is the fifth year that Singapore has been ranked first in the index for its business regulations relating to company start-up and operations, trading across borders, paying taxes, and closing a business. Taxand Singapore takes a look at the policies in place that makes this jurisdiction so tax efficient for multinationals.
Singapore has been consistently performing well in all recent business surveys and rankings and has been by far one of the best jurisdictions in the world for setting up a business or expanding an existing one. The Singapore government has been introducing timely, progressive and pro business policies, to ensure that the economy remains competitive and attracts a large proportion of foreign investment. These include streamlining the Singapore company formation process, lowering tax rates and introducing tax incentives, providing strong IP protection, protecting investors, minimising barriers to cross-border trade and maintaining an open immigration policy.
The business setting up procedure in Singapore involves just two steps, that is, securing name approval and filing incorporation documents and in most cases can be completed within a day's time. There are no foreign ownership restrictions and 100% foreign shareholding of a Singapore company is allowed. There are no restricted fields of business for foreigners and no special permits that are required for foreigners wishing to start a business in Singapore. Business licenses are minimal and can also be applied for online. The World Bank Report revealed that Singapore's online registration system for new firms saves businesses an estimated $42 million annually.
Also Singapore's tax rates are one of the world's lowest. The effective corporate tax rate for profits up to S$300,000 is less than 9% while profits above S$300,000 are taxed at 17%. Furthermore, qualifying start ups are exempt from paying tax on the first S$100,000 of taxable income during the first three consecutive years of company incorporation. Additionally, there is no tax on dividends, capital gains, estate duty, and foreign sourced income.
The World Bank also reconfirms Singapore's position as the most open economy to trade with efficient and transparent trade procedures in place. There is no cumbersome documentation; import/export permits can be applied for online; the quality of transport infrastructure is top-notch; and finally the customs service is unparalleled. Moreover, Singapore's extensive tax treaty network facilitates trading between borders.
Other factors that contribute towards Singapore's business environment are its strict legal environment, politically stable climate, and availability of the world's best workforce. It is observed that a number of foreign investors and entrepreneurs are taking note of Singapore's emerging economy and are exploring the Singapore incorporation route. The World Bank's verdict only serves to strengthen investors' confidence in Singapore as a place to do business.
Your Taxand contact for further queries is:
Kwong Wing Leon
T. + 65 6238 3018