The island of Singapore, has come a long way from the sleepy fishing island that Europeans found to becoming one of the largest and most international cities on the planet. Today, Singapore has a highly developed state capitalist mixed economy; the state owns stakes in firms that comprise perhaps 60% of the GDP through entities such as the sovereign wealth fund Temasek. It has an open business environment, relatively corruption-free and transparent, stable prices, low tax rates (14.2% of GDP) compared to other developed economies, and one of the highest per-capita gross domestic products (GDP) in the world, according to the Heritage Foundation. If you’re interested in doing business with Singapore, there are some essential numbers that you need to know.
Business in Singapore Affected By Economy
Due, to Singapore’s relatively small population and effective government; Singapore’s economy grew by a whopping 17.9% in the first half of 2010. As Singapore looks to a future increasingly marked by globalization, the country is positioning itself as the region’s financial and high-tech centre in competition with other East Asian cities. Singapore also has a strategic port which makes it more competitive than many of its neighbours in carrying out such entrepot activities. The Port of Singapore is the busiest in the world, surpassing Rotterdam and Hong Kong. To maintain its competitive position despite rising wages, the government seeks to promote higher value-added activities in the manufacturing and services sectors. As a result, there has been a huge rise in Financial Services in Singapore. Banking in Singapore is a service industry that has grown significantly in recent years. Total banking assets under management in Singapore rose from about $92 billion in 1998 to about $350 billion in 2004. Singapore is also aggressively promoting and developing its biotechnology industry. Hundred of millions of dollars were invested into the sector to build up infrastructure, fund research and development and to recruit top international scientists to Singapore.
Despite its small size, Singapore is currently the fifteenth-largest trading partner of the United States, according to the US Census Bureau. Singapore’s principal exports are petroleum products, food/beverages, chemicals, textile/garments, electronic components, telecommunication apparatus, and transport equipment. Singapore’s main imports are aircraft, crude oil and petroleum products, electronic components, radio and television receivers/parts, motor vehicles, chemicals, food/beverages, iron/steel, and textile yarns/fabrics. Due to the wide range of import and export opportunities, doing business in Singapore maybe be beneficial depending on what industry your company is in.
Essentially, Singapore is a very welcoming trading city located right in the heart of Asia. It also has a relatively low tax rate at 17%. In a move to sharpen Singapore’s competitiveness, Finance Minister Tharman Shanmugaratnam said the corporate income tax rate will be cut by one percentage point to 17 per cent from the Year of Assessment 2010, according to Channel News Asia. Singapore has also performed quite well in International Rankings on the Economic and Political environment. In 2010, IMD World Competitiveness ranked Singapore’s labour regulations as the most business conducive in Asia and among the top 5 in Asia for the best skilled labor. In 2011, the World Bank also ranked Singapore as the world’s easiest place to do business. The Economist Intelligence Unit, also ranked Singapore as having the best business environment worldwide. The 2009-2010 Global Competitiveness Report, ranked Singapore as first in the world for having the best protection of intellectual property. The list goes on and on.
Singapore, is clearly a great market for businesses to invest in. Especially, since Singapore’s economy continues to post good growth rates in the current poor global economic environment. Businesses of all kinds can find good investment opportunities in Singapore, but high-tech companies and service businesses are likely to find the most promising opportunities. Since, Singapore is a high-cost environment with a highly skilled labor force. While, the conditions are great for doing business in Singapore, the costs are also high due to the limited amount of land available and the high wages of a skilled labor force can create high costs for businesses. However, it all depends on the kind of industry you operate in and how you plan on trading in Singapore.