Going Offshore: Why Transfer your Business to Singapore

The Singapore Tourism Board has recently projected visitor arrivals to be between 13.5 and 14.5 million this year. That is a whopping 10% increase from the same time frame last year! Many foreigners have come as tourists but many of them have planned to stay a little bit longer. Expats bring a unique culture and dimension to Singapore life but what do the locals think about them?

Although the island-nation prides itself on having a successful societal control despite cultural diversity, adding expats into the mix makes the ball game a lot more different. There are X factors that may play a huge role in managing the cultural divide. Expats have their own microcosms and social bubbles that separate them from the rest of the population and with that distinctiveness bring about contentious issues. Sure, nobody is perfect but without cultural sensitivity, anything foreign and different can always rub the locals the wrong way!

Some expatriates who arrive in Singapore bring their bad manners and attitudes from their home country thereby bringing in negative stereotypes like the “fat American,” “drunk Aussie,” or “arrogant Briton” imageries. Do you have these despicable traits that brand you a persona non grata? No one wants a biased comparison but if you don't know then you might as well check out the list below:

“The City-State is Number One”

“Culturally diverse,” “safe living environment,” “politically stable,” and “strong business community” are some of the words to describe Singapore by foreign expatriates living in the city-state. Reasons why many of them come to do business in the country. Not only that, the government has taken steps to take advantage of these positive impressions to attract more skilled people to drive the economy even further and compete with other established and emerging markets.

Aspiring businessmen and venturing entrepreneurs would still be asking, “why Singapore?” Going offshore would mean that you have to physically transfer your business operations, get skilled and talented people to work with you, and take care of government and regulatory bureaucracies. This can be a tough order if you are transferring your business to other countries but not in Singapore. Why?

More than just the allure that its fascinating culture and lifestyle can offer, its overall business environment is a magnet to international business. Here are tidbits of information why Singapore is the perfect business location:

1. The World Bank ranks it number 1 for ease of doing business, political stability, labour force, and quality of life.
2. Forbes Magazine ranks it as the third wealthiest nation in the world.
3. It is 3rd most globalised economy among the world’s 60 largest economies in the 2011 Ernst & Young Globalization Index.
4. There are no dividends, capital gains, and estate, death, and inheritance taxes.
5. Personal and corporate taxes start at 0% and 8.5% respectively.

So why make the move to Singapore and consider offshoring your business?

Strategic Location

Even before Sir Stamford Raffles founded Singapore in 1819, the island nation has always been in a strategic location for international trade as Indian Ocean-bound ships bring in goods from China to Europe and vice versa. Nowadays, it is the international business hub that serves as the base of operations for the biggest companies in the world who want to do business in the region. Not only that, every single airplane and ship makes a stop in Singapore with Changi Airport registering 15 million passengers annually and its world-famous port is classified as a premier International Maritime Centre.

Business as Usual

Good thing there are no business disruptions and a minimal government bureaucracy to deal with. Its pro-business environment makes it irresistible for foreign investors and capitalists not to invest. Even Facebook pioneer Eduardo Saverin decided to jump ship and move to Singapore because of the fact that anyone can transform business ideas into profitable and growing businesses. You have to understand that in other countries, it takes weeks and even months just to incorporate a company. It only takes 1-2 days to do that in Singapore and within a week you can immediately start up and manage your business.

Efficient Taxation System

A successful society needs to have an efficient taxation system in order to foster a business-friendly environment and spur economic activity. Singapore did that so well that expatriates want to set up their offices in the metropolis. In fact, the country boasts low personal and corporate tax rates through its tier system.

Personal income tax starts from 0% to as much as 20% for people with an average annual income of S$320,000 while the corporate tax rate for private limited companies with average profits of up to S$300,000 is below 9% and top earners have a 17% flat rate. Since it follows a single-tier tax system, there are no capital gains taxes. Dividends are distributed to shareholders tax-free for Income taxed at the corporate level.

Singapore is not dependent on income taxes so the government devised a way to generate income by making the economy competitive by adopting a consumption tax – the Goods and Services Tax (GST). Even with that tax, the country remains below the global average GST/VAT rate of 16.4% with its 7% GST rate.

Immigration Policy

Although Singapore is one of the most densely populated countries in the world, it is hugely dependent on a large labour force that even outnumbers the local population. The rationale of its open immigration policy is to attract skilled expatriates and foreign capital in order to boost its economy and spur greater economic activity as most industrialised countries are hit by the recession. Singapore immigration policy facilitates the relocation of foreign nationals who are interested to set up their businesses in the country. Offshoring businesses mean that you also need to hire foreign skilled workers to do the job so the appropriate work visa provisions have to be met.

Intellectual Property Protection

Singapore has very strict intellectual property laws so that IT firms and software developers offshoring their operations to the country will benefit from this setup. There specialised firms that handle all your IP assets thereby making the country a one-stop-shop for intellectual property protection. In fact, the World Economic Forum, the Institute of Management Development, and the Political Economic Risk Consultancy have all placed Singapore as one of the world’s best when it comes to intellectual property security.

Stable Government

Many countries are plagued by unstable political situations, inherent corruption, and bureaucratic red tape that drive away businesses. Offshoring businesses are dependent on a supportive and stable political infrastructure, otherwise, they won’t grow and expand. Singapore has pro-business laws and regulations that make it easier for businesses to set up shop.

Skilled Labour Force

Singapore has the best of both worlds, it has the business expertise of Western companies and the skilled and diligent labour force from all over Asia. It has built a sense of community from among different nationalities and cultures thereby producing world-class and productive workers. As a knowledge-based economy, its highly-educated and technically-proficient manpower thrives well in a work-hard and work-smart culture.

Better Quality of Life

When you move your business, you also think about what’s good for your family. Singapore offers a better quality of life than other countries as it provides residents, including expatriates, world-class transportation services, a safe living environment, an outstanding business support system, and diverse selection of cultural and educational opportunities that you can’t find elsewhere.

So, have you considered the idea of offshoring your business to Singapore?

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