Will Singapore Rebound from Economic Difficulties?
Singapore has been posed with some serious economic challenges in recent years, but still remains a centre for foreign direct investment, which has many people wondering why?
The lion city’s GDP is expected to contract anywhere from 4-7% for 2020. As reported by CNBC, GDP in the second quarter of 2020 shrank by 13.2% compared to last year, which was worse than estimates.
Singapore experienced a major outbreak of Covid-19 in early April, leading to the city entering a partial lockdown, severely disrupting its economy. The city-state’s export-driven economy was also negatively impacted by the worsening US/China relations, as Singapore is often seen as a pivot between East and West.
Even though external issues have given the Singaporean economy a difficult time, the city still posses many qualities that give it an advantage over other places around the world. These core attributes form the characteristics of Singapore and are still the main driving force behind the city’s world-class business environment.
5 Reasons to Invest in Singapore:
1. Strategic Pivot Between East & West
With a world increasingly connected by globalisation, it comes to little surprise that Singapore’s strategic location is well-positioned to take advantage of the emerging markets of Asia. China, India, and ASEAN’s growing importance to the global economy will be increasingly reflected in the coming years. Excellent logistics infrastructure will help connect developed western markets to the emerging eastern markets, making Singapore’s stature as a transport hub grow in prominence.
The city’s Changi International Airport already serves as a connection centre for a range of international airlines while also hosting some of the world’s largest logistics companies. Singapore is also home to the world’s second-busiest container port, with shipping lines linking to over 100 countries. The proximity of the city to important markets combined with its top infrastructure will make it increasingly important as Asia continues to develop.
2. Ease of Doing Business & Good Support
Consistently ranking top 2 in the World Bank’s Ease of Doing Business Index, Singapore is known for its efficiency and simple business operations. Ranking in the upper echelons of categories such as Enforcing Contracts, Protecting Minority Investors and Dealing with Construction Permits, starting a business there will be a lot easier than other places around the world.
The Singapore Government encourages innovation and entrepreneurship, pushing schemes to make it easier for businesses to access advisors and financial capital. The triple-A rated economy offers the stable environment businesses need for expansion and investments.
3. Low Tax Rates
Corporate Tax in Singapore is at 17%, one of the lowest in the world while taxable residents also enjoy low-income tax, ranging from 0% to 22%. The city-state also has multiple free-trade agreements with several countries and is part of ASEAN, which significantly reduces tax barriers and encourages the free flow of trade and investment between these nations.
4. Excellent Legal Framework
Singapore’s legal framework is based on English common law, making it one of the most business-friendly systems due to the protection it offers. It ranks as having the best IP protection systems in Asia and is known for its political stability. The transparency, reliability, and comfort the city offers to businesses make it the perfect place for expansion in Asia.
5. Bright Minds
Singapore is home to one of the most highly-skilled populations in the world. With all the smart government initiatives and attractions, the city has attracted some of the brightest people around to world. An excellent educational system and wide-offering of training programmes have created a talent pool envied by the rest of the world. The vast majority of people are also bilingual and use English as their business language, making it easy for foreign companies to communicate and set up a business.
Expanding into Singapore?
Are you looking to expand into Singapore, but don’t have local expertise? If you are considering expanding but want to save budget, save time and ensure you are compliant with local protocols, then you should consider using a PEO/EoR services. Set up a small workforce on the ground and have operations up and running without the need for a legal entity in the city.
You can save up to 50% by hiring under a PEO/EoR arrangement by eliminating any local service fees that are required for full business operations. Avoid setup complications, reduce paperwork and have experts advising you on compliance, so you can realise your business expansion plans. For more information on how Links Secondment services can help you, contact us now!
3 Key Takeaways
Singapore Offers an Excellent Business Environment
Singapore has created one of the best business-friendly environments in the world, with low tax, smart government initiatives and a strong legal framework. With the development of Asia as a whole, we expect Singapore to continue being a premium location for businesses to expand their business in Asia.
Reduce Costs in Your Expansion Plans with PEO/EoR
Cut the costs of setting up a local entity by using secondment services. Reduce the paperwork and set up costs with this flexible alternative. Have a taskforce ready on the ground quickly and begin your expansion plans!
Partner with Professionals
Partnering with Links International will give you all the expertise you need on Singapore. Our extensive experience in the lion city will ensure your business is always in compliance with the local laws and regulations.
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, PEO/EOR Secondment, outplacement, recruitment and more! Contact us for more information on how we can help leverage your HR function.