Singapore, although one of the smallest countries in its region, is also one of the world’s strongest economies. It has had consistently high economic indicators which highlight how well its economy performs. Coupled with favourable government policies geared toward promoting trade and establishing start-ups, as well its strategic location, Singapore has been considered, for the longest time, as a very good place for economic activities and business. All these factors have translated to the country being an attractive place to do investments and business in.
Aside from these general indicators, there are of course a number of specific factors that make the country a better place to do business in, compared to its neighbours in the region.
Some Factors Which Make Doing Business in Singapore a Good Option
Singapore’s location makes it an ideal spot for business and trade. It is a gateway to a number of countries in Southeast Asia which means a lot of goods and people pass through it before reaching their final destination. Being exposed to a large amount of inflow and outflow of trade would of course benefit any business potentially. It also makes the acquisition of human capital and raw materials and other ingredients much easier. It is also easier to import and export in the country as importation is mostly duty-free and there are less requirements and procedures to follow.
One of the other factors which make Singapore so attractive to investors and businessmen is that it is relatively easier to put up and establish a business in Singapore. Government policies are favourable to start-ups and they are better-protected with regard to intellectual property rights than most other countries in the region. Aside from these, it generally takes a much shorter time to incorporate your business in Singapore.
Taxes and tax rates are also much lower compared to other countries. Singapore also has a number of tax treaties with other nations which business in the country can readily avail of to save up on tax-expenses, especially when they have transactions overseas. These highlight the ease and straightforwardness of doing business in the country.
Another factor which might be important to look at is the fact that a number of professionals in the country speak English. This facilitates communication between foreigners and locals who work together and tearing down the language barrier which might impede positive working relations and which may lead to misunderstanding. Having a common language that almost everyone understands eliminate problems and makes working and doing business more efficient.
Singapore’s good infrastructure as well as its urbanized setting also contributes to businesses in the country. This means that overall, the country has a good system of roads, traffic systems, and communications centres established for the benefit of everyone in the country. This means cheaper expenses with regard to transportation as well as more efficient travel times both for goods and people. It also means more stable and reliable communications locally and overseas as well, at an affordable cost. These prove to be integral to any business as they are of course essential to communications both within and with external entities, as well as to facilitate the flow of money and goods.
Essentially, therefore, the environment in the country is very conducive to the conduct of trade and business. It is very easy to do business in Singapore not only for its citizens but even for foreigners and expats alike. The strong economic performance of the country coupled with good business practices and some other local factors, which, in turn, lead to positive results in terms of business performance, make the country a prime site for starting up a new business or for expanding an already successful one.
Comparison with Other Countries
Singapore is, without a doubt, one of the most ideal countries to have your business in. Compared to other countries in the region, it is perhaps the most ideal place to put up shop. But of course, its neighbours do have certain advantages over Singapore which may be important to look at as these advantages may just be the one thing that you are looking for in the country where you are planning to set up a business.
For example, if a business is trying to be springboard for a future entrance to the Chinese market, it is perhaps generally more suitable to have it established in Hong Kong, rather than in Singapore. The location of Hong Kong alone would already be a prime consideration. Goods and other resources would also take considerably less time to travel from Hong Kong and China which translates to cheaper freight costs. So if a business would want to expand to China in the future, Hong Kong may be a better place to start.
For labour-intensive businesses, the primary factor that must be looked into is of course, labour costs or the cost of human capital. Some countries, like the Philippines, India and Indonesia, have cheaper law-mandated minimum wage. It would be prudent to consider these other countries when you plan to have a business which involves many workers, like manufacturing for example.
In relation to manufacturing, if a business is more likely to utilize raw materials for its inputs, it may be infinitely better to have it located instead in a country with rich natural resources. Having to buy or even grow raw materials will always prove to be cheaper than having to import them from abroad. With this in mind, countries like Thailand, Malaysia, Indonesia and Vietnam can be essential locations to consider as these countries have rich supplies of raw material as compared to Singapore which is almost fully urbanized.
There are a number of infinite considerations to look at in determining the location where you’ll put a business. All factors must be equally taken as a wrong appreciation of even the smallest one can lead to the biggest consequences. Singapore, being the strong economy that it is, coupled with the positive economic environment can be a very good place to first look at. But it is, of course, equally important to also consider its neighbouring countries which can possible better meet the specific needs that a business might have.