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Singapore is built on its ability to harness globalisation and is renowned for integrity, quality, reliability, productivity and enforcement of intellectual property rights. But doing business is not without its challenges, and having local help on board is crucial.
The World Bank and International Finance Corporation (IFC) rank Singapore number one in the world for ease of doing business, thanks to its many assets which are essential in the knowledge economy. Competitive tax rates and a strategic location make it a preferred destination for businesses looking to expand in the Asia Pacific region, and it has long been considered an economically-advanced stronghold within a region on the tip of an economic boom.
Suzanne Holmboe of TMF Group explained that being a transparent and efficient country where all filings are done online means there are few complexities that can delay formation. “We often see companies opting for listing in Singapore due to its high standards of corporate governance,” she added, pointing to the many incentives on offer for firms looking to start up, including a tax exemption scheme for nascent businesses.
However, doing business in Singapore is not without some challenges, and demand from global businesses is providing tough competition and reducing margins, as well as increasing business costs, mostly in rentals and a squeezed labour market.
Starting a Business
Businesses looking to start up in Singapore must register online with the Accounting and Corporate Regulatory Authority, where a name search can be conducted and filing for the company incorporation and tax number (GST) can be completed. A company seal and registration for Work Injury Compensation Insurance at an insurance agency should also be completed.
Dealing with Construction Permits
There are 11 procedures involved when dealing with construction permits, although the process should take less than a month to complete. Businesses must obtain written permission from the Urban Redevelopment Authority before getting structural plans approved, obtaining technical clearance and consulting with the Central Building Plans Unit of the Ministry of the Environment and Water Resources, as well as the Land Transport Authority and Commissioner for Workplace Safety and Health.
Getting Electricity
It takes 36 days to get electrical connection, most of which is spent opening an electricity account and paying the connection fee to SP Services Ltd before external works from SP PowerGrid are carried out.
Registering Property
Registering property can be a complicated ordeal, particularly in relation to payable fees. Companies new to the environment will spend several days conducting online searches on various government bodies, from the Inland Revenue Authority, the Land Transport Authority, Ministry of Environment, PUB-Water Reclamation Network Department and Urban Redevelopment Authority.
Getting Credit
Singapore ranks 12th in the world for ease of getting credit, but businesses should be aware that individuals and firms are not listed in a public credit registry with information on their borrowing history from the past five years.
Protecting Investors
The World Bank and IFC rank Singapore in second place in the world for strength of investor protection thanks to its strong performance on the disclosure, liability, suits and protection indicies.
Paying Taxes
Companies are required to make five tax payments per year which take an average of 82 hours of business time to complete. Corporate income tax is competitive and is filed online, and social security contributions and VAT are also dealt with on the web.
Trading Across Borders
Singapore has historically acted as a global trading centre and is the most cost competitive region in the world for trading across borders. There are four documents to prepare when exporting and importing, taking five days or less to complete on average.
Enforcing Contracts and Resolving Insolvency
It takes 150 days to enforce a contract compared to the OECD average of 510. Resolving insolvency takes well under a year, compared to 2.9 years in East Asia and Pacific and 1.7 years across the rest of the OECD.
Culture
There is a strong emphasis on relationships in Singapore, which means the process of doing business should be unrushed and based on personal development at first, rather than the facts and figures of corporate life. A relatively young country, Singapore draws influences from both East and West, which can make it a hotbed of cultural values.
TMF Group
We have the local knowledge to help you navigate these minefields. Whether you want to set up in Singapore or just want to streamline your Singaporean operations, talk to us.