This is part one of a two-part article which explores the reasons why Singapore is a very attractive investment destination for foreign investors looking to spread their eggs in more than one basket.
Since independence, the Singapore Government has always put efforts to attract foreign direct investment (‘FDI’) and worked in creating an environment (such as financial stability, excellent infra-structure, telecommunication facilities, banking system, pro-business legislation, administrative efficiency when dealing with regulatory and other administrative bodies, intellectual property protection regime, English speaking highly skilled workforce, strong political leadership and sound economic fundamentals) that helps them flourish. This resulted in Singapore being one of the easiest cities in the world to do business in and it is one of the countries with the most open economy.
Its very beneficial geographical location can be leveraged to reach into big markets of Asia. Additionally, Singapore is well positioned for businesses that use Singapore as a mid-way point to repackage goods moving across the globe.
Moreover, Singapore has developed a lot technologically in recent years and this has helped Singapore enhance its standing even further as an attractive location for foreign investors. Areas to consider in light of this advantage would be technological innovations, digital communications, fintech (financial technology), medical technology, biotechnology, healthcare, precision engineering etcetera.
Singapore has a very favourable tax system due to its low corporate tax rate and the extensive network of double taxation treaties with over 80 countries. There are numerous industry-specific tax deductions and incentives made available to businesses registered in Singapore including for the maritime sector, financial and banking sector, research and development.
Some of the general tax incentives and measures which are highly attractive to foreigners include one of the lowest corporate tax rates in the world plus tax exemptions for specified quantum of chargeable income, higher tax exemptions for newly incorporated companies, no capital gains tax, no withholding tax on post-tax dividends paid from Singapore, shareholders are not taxed on dividend income from a Singapore tax resident company, a company’s foreign source income is not taxable in Singapore until such income is received or deemed received in Singapore and companies in Singapore can also benefit from tax exemption on foreign-sourced dividends, foreign branch profits and foreign-sourced service income if certain conditions are met.
Singapore also grants tax breaks to companies in the trading sector to help them go regional and international.
Please continue to read the rest of this article by clicking here to access Part Two of this article.
If you are keen to find out more about the framework in Singapore for setting up a representative office of your existing business, setting up a new business or investing in one or more businesses in Singapore, please contact our experienced senior lawyers at AT Law Practice LLP for a short complimentary call or meeting – click here.
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