Singapore Clinched Second Spot In Asia For Ease Of Starting Business

Singapore has always been a top business destination in Asia, competing with Hong Kong for the top spot. And though we lost out to Hong Kong yet again, Singapore emerged top of countries like Korea, China, and India. The Global Business Complexity Index ranked seventy-seven jurisdictions globally in three areas – accounting and tax standards, human resources and payroll matters, and rules, regulations, and penalties. So let’s find out why has Singapore ranked second globally in terms of starting a business.

Keeping up with the business landscapes…

The dynamics of business are always evolving globally, which changes compliance requirements, setting the bar higher for most companies to start their businesses. Companies need to be familiar with all the changes in the countries’ legislation in order to stay compliant.

How does Singapore fare?

Singapore excelled, in particular, in the area of accounting and taxation, because of the clarity of rules. Filing requirements are straightforward and clear-cut, and the country adopts International Financial Reporting Standards. We have a competitive corporate tax rate of 17 per cent and we have Double Tax Agreements with more than 80 countries. That makes Singapore very attractive to foreigners. The Accounting and Corporate Regulatory Authority (ACRA) together with the Inland Revenue Authority of Singapore (IRAS) has over the years, streamlined the processes of e-filing. Almost every filing and change can be done online almost instantaneously.

Another area that has scored well is the island nation’s transparent and unbiased policies on employment and payroll guidelines. Singapore has a long-standing policy on ‘humans are our only resource’. For a long time, there is a strong focus on attracting talents to our shores. The Singapore Government has always emphasized skills upgrading for our workforce, people are encouraged to take on additional roles in companies, re-learn and redeploy human resources within an organization.

What about our competitors?

Hong Kong outperformed Singapore in the area of basic compliance regulations. The Republic has been enhancing its defence against money laundering activities and the funding of terrorism activities, which inevitably increased the complexity and business of doing business here. Recently, local banks have been tightening their compliance and regulations to foreign-owned companies opening a corporate bank account in Singapore. That also makes starting a business in Singapore slightly more challenging in this aspect. Learn more about opening a corporate bank account here.

Impact of COVID-19

COVID-19 pandemic has definitely accelerated the changes of regulatory frameworks in Asia to a much faster pace, to make it more encompassing for businesses to carry out activities. IRAS has granted extensions to filing deadlines for all companies and a three-month extension for corporate tax payments due to COVID-19.

Asia has the highest number of jurisdictions that encourage the submission of company documents, tax invoices through an authority portal. Singapore’s ACRA is one of them. Digital solutions and e-filing are the main forms of submissions right now, moving forward amid this global COVID-19 pandemic. Even if a vaccine is ready by the end of 2020, our way of conducting business is going to be different. Many businesses have already adopted digital solutions, bringing their physical shop and merchandise onto virtual space or virtual reality.

Businesses in Singapore are already accepting e-signatures for trust, property, and financial instruments in place of traditional methods. In fact, many legal firms and corporate secretary firms are already adopting such practices for overseas clients like sgcompanyservices.com.

Hence starting businesses in Singapore is a structured and straightforward process, and it will only become smoother moving forward.

If you have any questions on the process of setting up a company in Singapore, contact us today.

**This article was first written in June 2020

Editor’s note: COVID-19 vaccine has already been rolled out progressively in Singapore. Singapore is already looking at how we can open up our borders to businesses and tourism once more. 

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