Touted as the unofficial capital of Asia, Singapore is maturing as a regional entrepreneurial hub. The country has been singled out for its potential to turn into Asia’s Silicon Valley with an increasing number of technology enterprises, Internet start-ups, venture capitalists and incubators establishing a presence in Singapore.
Singapore’s business friendly climate, corrupt free institutions, efficient legal system, low tax regime, top-notch infrastructure, innovative visa schemes, and excellent living environment have turned it into a hotspot for enterprising individuals and ambitious business owners from all over the world; India being no exception.
Indian companies constitute the single largest business community from any single country in Singapore. As many as 120 India-based companies are reported to incorporate a company in Singapore every month and their numbers have swelled to around 5,000 as of 2011.
So what is it about Singapore that is driving Indian companies and businessmen to its shores?
Ease of doing business
The Singapore government’s timely and proactive reforms have shaped the country’s business environment, which is conducive for business growth and expansion. Corruption watchdog, Transparency International confirms that Singapore is indisputably the least corrupt nation in the world.
The regulatory procedures for registering a Singapore company are minimal and can be completed in a matter of 1-2 days. Furthermore, foreign entrepreneurs wanting to setup a business in Singapore face no extra restrictions or regulatory hurdles. 100% foreign shareholding is allowed in all business sectors and no prior approval is required from authorities.
In contrast, entrepreneurs in India are faced with endless number of tedious and bureaucratic procedures and many weeks of wait time before the business can start operations. Even after business incorporation, entrepreneurs in India have to constantly struggle and deal with corruption, red-tape and inefficiency of the system. In the World Bank’s ‘2012 Doing Business Report’, Singapore ranked #1 for ease of doing business, #1 for trading across borders, #2 for protecting investors and #4 for starting a business while India ranked #132 for ease of doing business, #109 for trading across borders, #46 for protecting investors, and a dismal #166 for starting a business.
How Singapore and comparator economies rank on the ease of doing business
Attractive Tax Regime
The corporate tax rate in Singapore has been steadily going down and currently stands at 8.5% for profits up to S$300K and a flat 17% for profits above S$300K.
Take for instance a hypothetical company that earns US$500K. GuideMeSingapore’s tax calculator that helps estimate tax burden between two countries shows that the Singapore tax that the company would pay is US$64,243 making the take-home profit US$435,757 while the tax it would have to pay if it were incorporated in India is US$219,500, reducing the take-home profit to only US$280,500.
Excellent living environment
Singapore is a city of international character and is instantly appealing to Indian entrepreneurs for the excellent quality of life and exemplary living environment that it has to offer. Located within close proximity to India, Singapore is merely a four to six hour flight away from major Indian cities. Crowned as the most liveable city in Asia, Singapore is a natural pick for Indian entrepreneurs as it serves to function as a home away from home.
Singapore’s forward looking visa schemes are designed to attract the best entrepreneurial minds to the country. The Singapore Entrepreneur Pass allows foreign entrepreneurs to relocate to the country and start a business provided that they have a reasonably good business idea, certain amount of capital and can help create local jobs.
The Entrepreneur Pass (also known as EntrePass) allows business owners to bring their immediate family members to Singapore. If the business prospers, there are excellent chances of gaining permanent residence status in Singapore.
It should be noted that the EntrePass is meant for serious entrepreneurs only i.e. entrepreneurs who are serious about starting a business in Singapore. Individuals who just want to relocate to Singapore but are not fully committed to starting a business will be disappointed as Singapore authorities are very careful in assessing and granting approval of EntrePass applications.
Furthermore, there is annual assessment of meeting the set forth targets as per the initial business plan.
On a final note
Singapore is one of the best functioning cities in the world today and offers ample opportunities to realize one’s potential and achieve ambitions. It is a city of opportunity and is best described as the perfect place to work, live and play in.
[About the Author: Pardeep Boparai is the founder of Janus Corporate Solutions – a Singapore based firm that provides comprehensive and cost-effective Singapore company registration, immigration visa, accounting and tax filing services to businesses and entrepreneurs worldwide. For more information, visit http://www.GuideMeSingapore.com. ]