1.Policy and Business Environment Advantages
Known for its stable and efficient government and robust regulatory system, Singapore has a highly stable political and social environment and is a global leader in doing business. The government pursues a pro-business policy and provides a clear and transparent legal framework (modeled on the Anglo-American common law system) to ensure effective protection of intellectual property rights and contracts. This stable and reliable environment allows companies to plan for the long term with peace of mind.
At the same time, Singapore is geopolitically neutral, possesses good relations with both China and the United States, and is considered to be"Bridging East and West."According to a Bloomberg report, many global and Chinese companies are choosing Singapore to set up their Asian headquarters because of the country's better relations with the West, its broader talent pool, its diversified economy and the tax incentives it offers. In contrast, Hong Kong has become less attractive in recent years due to environmental changes and policies, while Singapore has emphasized its independence and become the most attractive location for international companies.Preferred Asia Office LocationsThe
Businesses generally view Singapore's political stability and freedom as superior against the current backdrop of elevated geopolitical risks. In addition, the Singaporean government, through multi-sectoral (e.g.Economic Development Board EDB,Enterprise Singapore ESG(etc.) actively support business development by providing settlement advice, one-stop approval services and various funding schemes to continuously optimize the business environment. Together, these factors have laid the foundation for Singapore's policy environment to serve as an ideal base for overseas operations.
2. Tax Advantages and Tax Planning Facilities
Taxation is an important consideration when choosing a place of incorporation and Singapore has significant advantages in this regard. Firstly, Singapore is a territorial tax jurisdiction, taxing only income generated in Singapore or remitted to Singapore from abroad. This means that companies that do not repatriate their overseas earnings to Singapore are legally exempted from paying tax in Singapore, thus optimizing their global tax planning.
The statutory corporate income tax rate in Singapore is17%In addition, the tax rate is close to Hong Kong's rate of 16.51 TP3T, but the Government offers many relief measures and incentive programs that can reduce the effective tax rate for specific businesses to 13.51 TP3T or lower. For example, newly incorporated companies are entitled to partial income tax relief for the first few years, and additional tax credits are available for high-tech R&D activities. Secondly, Singapore does not levy capital gains tax and companies are not taxed on value-added gains from the sale of equity and assets, which is highly attractive to entrepreneurs and investors.
3.Geographic location and the strategic significance of regional markets
Geographically, Singapore is locatedHeart of Southeast AsiaSingapore Changi Airport has an unrivaled location advantage as it is situated on the Malacca Straits, a major global thoroughfare. As a transportation hub connecting East and West, Singapore Changi Airport offers global access and an average flight time of only 2-3 hours between major ASEAN cities, facilitating regional operations and business transactions. Singapore is also one of the world's busiest container ports with a well-developed logistics infrastructure that allows goods and raw materials to move efficiently in and out of Southeast Asian markets.
More importantly, Singapore is seen as a "springboard for Southeast Asia and even the Asia-Pacific market". For companies wishing to expand into ASEAN, setting up a base in Singapore means having access to a large market hinterland of 660 million people across ASEAN. As a member of ASEAN, Singapore is an active participant in regionalEconomic integration (e.g. RCEP agreement)In addition, companies can better utilize ASEAN tariff concessions and intra-regional trade facilitation from Singapore. Many companies have chosen to test the waters of international business in Singapore before radiating into fast-growing markets such as Indonesia, Malaysia and Vietnam. An analysis pointed out that Singapore, as a bridgehead for ASEAN radiation, has become the preferred place for global multinational enterprises to set up their Asian headquarters.
