Singapore is known by many foreign nations as a critical player in the evolving economy of the Southeast Asian region. Singapore is also regarded as the second-most country in the world, after South Korea, hence attracting many potential investors to set up businesses here.
All of the economic growth is due to the nation’s highly developed architecture and infrastructures, such as telecommunications, energy supply, and transportation. In addition, Singapore also boasts high literacy and skill development, which leads to many global corporations and investors looking to the nation for skilled workers.
Lastly, Singapore’s geographical location makes the nation an ideal trading point for the East and West. Because of this, Singapore, through its years of thriving business connections, also set up policies that benefit both international and local businesses. Hence, multinational corporations have the assurance to set up businesses and invest in Singapore.
Besides these various reasons, there are 5 other reasons that contributed to the solid business connections that Singapore enjoys today. They are:
1. Singapore’s Free Trade Agreements network
Singapore enjoys 27 Free Trade Agreements (FTA) bilaterally and regionally all around the world with nations such as China, India, Japan, New Zealand, and South Korea. The FTA means that Singaporeans travelling in these 27 nations and regions can enjoy cheap services and products without worrying about tariffs, customs, and other related barriers.
The FTA networks help to boost economic growth in Singapore by reducing additional expenses for businesses and increasing productivity. In addition, it also allows Singapore to compete in the international market by opening up access to markets previously inaccessible due to cultural or geographical reasons.
2. ASEAN Community
Being a vital member of the ASEAN community (Association of Southeast Asian Nations) has its perks. One of which is the trading economy.
ASEAN is made up of 10 member states – Cambodia, Laos, Myanmar, Singapore, Vietnam, Brunei, Indonesia, Malaysia, Philippines, and Thailand – and is also the most dynamic and largest economic community globally, with a combined population of over 600 million people. This makes ASEAN the ideal place for international corporations looking to enter the regional market. With its robust economy, ASEAN offers an excellent opportunity for tourism, investment, and trade that cannot be found in other parts of Asia.
The advantages that ASEAN members get are:
- Reduced cost for imported services and products
- Easy access to labour
- Free movement of goods and capital within the ASEAN region
- Protection from any import duties
3. Suspension of import-related GST
The Approved Import GST Suspension Scheme (AISS) was designed to allow businesses to import goods and services into Singapore without the implementation of GST-related charges. This positions Singapore as an ideal hub for distributing goods and services between Eastern and Western nations. Other benefits that come with the suspension of import-related GST are cost savings, growth opportunities, business continuity, revenue enhancement, and quality improvement.
4. Digital trading established agreements
Singapore always keeps up with the latest technological trends. This comes as no surprise as Singapore is increasingly prioritising digital agreements. Arrangements, such as APEC Cross Border Privacy Rules and Digital Economy Agreements, are examples to show us the digital direction that Singapore is heading towards. With such implementations, companies are assured of adequate protection from data breaches as well as up-to-date essential information. Additionally, such established agreements allow various parties, such as cryptocurrency businesses, the space to conduct digital trading more openly and transparently.
5. Trusted and efficient customs
An essential aspect of good supply chain management is a trusted and efficient custom. They help reduce unnecessary additional expenses and errors in the import of products. A custom procedure typically involves several steps, such as documentation, payment of applicable taxes, paperwork, and inspections. In Singapore, a trusted and smooth custom procedure assures international businesses, thus opening up more investment opportunities.
Singapore’s low taxation rates, as compared to other countries, have helped maintain the nation’s position as one of the most competitive economies in the world. Concurrently, it fosters an environment that encourages businesses to grow.
Its healthy and evolving business connections with nations all over the world and its financial hub, as well as global trade, make it a strategic location to conduct businesses.
If you start a business in Singapore, it is vital to be aware of various policies and benefits that Singapore offers by reaching out to a trusted company incorporation service provider like Ackenting Group. We provide a wide range of corporate advisory solutions and affordable accounting services in Singapore, such as branding, company incorporation, corporate financing, tax management, payroll management, and auditing services, among others. Get in touch with us today to help you get started!