Why Foreign Companies Relocate to Singapore?
In the 2012 World Bank Global Economic Ranking, Singapore ranked first in the list of countries most friendly to businesses. This is because Singapore has a culture that is business-oriented, with a strong legal framework to protect intellectual property and the provision of a sturdy economic support. Moreover, the tax incentives in Singapore are what attract many businesses to the country. Here are some of the many reasons why foreign companies relocate to Singapore:
0% tax on Dividend and Capital Gains
The tax regime in Singapore is extremely friendly and simple for investors. The tax on dividend income and capital gains is zero percent, and the tax rate on revenues over $300 is only 17%. Below $300, the tax rate is 8.5%. Moreover, tax is exempted for all foreign-sourced income that has been subjected to a tax of at least 15% in any country other than Singapore.
Double Tax Treaties in Singapore
The extensive network of double tax agreements (DTA) in Singapore, which have been made with more than seventy countries all around the world, is a key driving factor in driving foreign companies to relocate to Singapore.
With DTA, foreign companies can:
- Avoid double taxes
- Lower withholding taxes, and
- Enjoy the preferential tax regime.
Strategic Location and Extensive Connectivity
Singapore is at the heart of the Asia-Pacific, surrounded by the countries that are some of the fastest growing markets in the world. This provides businesses in Singapore access to a market of over 2.8 billion people.
What is more, Singapore connects with the rest of the world seamlessly, providing a secure 24 hour financial trading with a sturdy foreign exchange industry.
Singapore is the only Asian country to rank top ten in the 2012 Global Information Technology Report, as the country with an amazing telecommunications structure.
Singapore is Asia’s Most Transparent Country
Singapore is one the least corrupt countries in Asia, providing you a safe and transparent environment to conduct your business in. The government policies in Singapore regarding business are transparent, so that you have a stable setting to work in.
Availability of Skilled Labor and Flexible Immigration Policies
Singapore’s labor is multilingual, and ranks in the top ten of the most skilled workforce all around the globe. The fast-paced working environment has created a workforce that is ready to take on a project whole heartedly and to complete it as efficiently as possible.
In addition to this, Singapore offers a wide array of immigration schemes, so that you can easily hire foreign talent, if you need to.
Appropriate Location for Relocation of Senior Management with Their Families
Apart from being one of the most industrially developed countries in the world, Singapore offers a beautiful natural environment for the residents, and the literacy rate is 95.9%, which is very important for families relocating to Singapore, as it makes the country a great place to live, work, and study in a peaceful environment.
One of the Best Intellectual Property (IP) Protection in the World
Singapore is ranked 2nd for providing the best Intellectual Property protection in the world. The legal system aims to help the businesses conduct their activities in a fair and healthy atmosphere.
Lucrative Options for Foreign Companies
Foreign companies have the chance of choosing how to enter the Singapore market with these options:
- Representative Office: Foreign companies who wish to first have an insight about the Singapore market are allowed to set up a Representative Office to conduct market research.
- Subsidiary Company: After 3 years of research at a Representative Office, the company has to switch to either a subsidiary company or a branch office. A subsidiary is the preferred option by many foreign companies as it allows 100% shareholding of the parent company.
- Branch Office: A branch office is considered as a branch of the parent company, which is held accountable for the liabilities of the branch office.