By Sahnur Yurt
Throughout the twentieth century, Singapore has been mostly known as a British colony, where people worked mostly in plantations. Today, it has become the easiest place to do business in the world, according to a report published by the World Bank in 2012. Singapore, the city-state that spreads across 63 small islands, is often regarded as the gateway to mainland Asia with thousands of people passing through its airport every single day.
World War II and Independence
On 15th February 1942, Winston Churchill famously remarked how Britain suffered its worst defeat at the hands of the Japanese in the Battle of Singapore. The Japanese occupation lasted for three years until September 1945. The island declared independence from the United Kingdom on 31st August 1963 and joined the Federation of Malaysia after the Merger Referendum of 1962. Nevertheless, tensions remained constantly high with Malaysia – due to Singapore’s attempts to create an equal society, as opposed to Malaysia’s requests for special treatment and rights to ethnic Malays. After much ideological strife, Malaysia expelled Singapore from the federation in January 1965. The city-state declared independence as the Republic of Singapore in August 1965, joining the Association of Southeast Asian Nations (ASEAN) in 1967 and the Non-Aligned Movement in 1970. The “Lion City” also hosts the Asia Pacific Economic Cooperation (APEC), the Secretariat of the East Asia Summit, and is a member of the British Commonwealth.
Singapore is often regarded as a friendly place to set up businesses. This can be accounted for by several factors: its geographical location; governmental incentives for businesses; a relatively straightforward bureaucratic process to establish companies; and an excellently educated workforce.
Gateway to Asia
The Lion City is a gateway to mainland Asia that includes over 63 small islands. Despite its tiny size, millions of people transit through Singapore’s airport each day. Visas for travelling purposes are not needed for citizens coming from several areas of the world with the exception of most countries in the Middle East, the Commonwealth of Independent States, the People’s Republic of China, and India. For instance, EU citizens do not require a traveller’s visa to enter Singapore. This policy on the movement of foreign individuals encourages people to visit the city-state.
A Friendly Environment for Business
Singapore presents suitable conditions for establishing businesses thanks a thoroughly drafted set of policies, aiming to foster a prosperous ground for foreigners to undertake business opportunities. Firstly, the government is renowned for providing a solid regulatory framework protecting intellectual property rights. In fact, Singapore has been ranked second best place in the world for intellectual property protection, by the World Economic Forum’s Global Competitiveness Report of 2011/2012. Secondly, the fiscal regime provides strong incentives for attracting foreign investors such as: total exemption from Capital Gains Tax, a competitive Corporate Tax (17%), and interesting Income Tax rates (20% as the highest levied band). Thirdly, the country relies on an extensive network of free-trade agreements with Asia and beyond. Existing FTAs exist between Singapore and important economies such as the United States, Japan, Australia, China and – most recently – the European Union. Being a prominent destination for EU investments in Asia, the extensive web of connections between Singapore and the rest of the continent is greatly beneficial for potential investors from Europe. Finally, the island has a well-educated workforce – ranked top in the world over the last 30 years (Business Environment Risk Intelligence’s 2008 Labour Force Evaluation Measure Report) – and flexible immigration policies that allow business owners to hire employees who best suits their companies’ from all over the world.
Registration Process for Businesses
Setting up a business in Singapore is relatively simple for foreigners and involves a number of steps. An applicant must first apply for an Entrepass (an entrepreneurial visa scheme for foreigners intending to set up a business in Singapore) and a Singpass (an electronic password allowing people to access key government services online). A business plan must also be prepared containing details regarding: the structure of the business in question; the availability of the business name; and proof of business address with local authorities. Registration with the Accounting and Corporate Regulatory Authority (ACRA) – the government agency in charge – only takes 15 minutes and involves a registration fee of 300-1,200 SGD (141-568 GBP). Times of registration may vary depending on whether a business requires approval from other agencies or additional permits are needed.
Despite not having any reserves, Singapore is Asia’s leading oil hub and one of the world’s top export refining centres. Its geographical location, massive storage infrastructure and technical capacity unquestioningly determine Singapore’s success in refining, trading and logistics. With a capacity of refining 1.3 million barrels per day, Singapore was one of the world’s top three export refining centres in 2007 (BP Statistical Review of World Energy June 2008).
Because of its position on the Asian Sunbelt, Singapore is being chosen by several solar and wind technology companies. The intellectual property regime and its strengths in manufacturing sectors allow the city-state to grow in the wind energy, smart grids, green buildings and energy efficiency fields. Due to its geographical position, Singapore receives approximately 50% more radiation than Japan and Germany, thus providing many opportunities for entrepreneurs who are interested in solar energy field.
As a leading country in the region for the Maintenance Repair and Overhaul (MRO), it reached 8.7 billion SGD output in 2012 with over 100 aerospace companies. In the Island, aerospace companies hired 19,900 employees in 2012. When this numbers are compared with other countries investing in this sector, it can be understood how rapidly the Singapore aerospace industry has grown over the last couple of years.