Singapore is often cited as the leading example of countries that continues to reduce corporate income tax rates and introduce various tax incentives to attract and keep global investments. Singapore has a single-tier territorial based flat-rate corporate income tax system.
Tax Benefits of Doing Business in Singapore
One of the key benefits of doing business in Singapore include attractive tax rates. Effective tax rates as one of the lowest in the world and the general “business friendliness” of Singapore are the two important factors contributing to the economic growth and foreign investment into the city-state. There is no capital gains tax imposed in Singapore.
Another key benefit of doing business in Singapore is that businesses can take advantage of the Double Taxation Agreements (DTA) Singapore has established and signed with several countries, which makes clear the taxing rights between Singapore and her treaty partner on different types of income arising from cross-border economic activities between the two jurisdictions. DTA between Singapore and another jurisdiction serves to prevent double taxation of income earned in one jurisdiction by a resident of the other jurisdiction. These agreements also provide for reduction or exemption of tax on certain types of income.
Strategic Geographical Location
Singapore is situated in the heart of South-East Asia, where visitors can commute to other Asia countries easily. Its international airport that serves over 15 million visitors annually, and Singapore’s port is one of the busiest in the world. Strategic geographical location is one of the key benefits of doing business in Singapore, particularly for shipping or trading businesses.
Ease of doing business for foreigners
Singapore has no restrictions on foreign ownership of business, and the repatriation of profits and the import of capital are freely allowed. Singapore has a transparent legal system which makes it an ideal location for businesses to operate in.
Comprehensive Intellectual Property (IP) Laws
Effective intellectual property laws which helps to protect the intellectual property your business has, is one of the key benefits of doing business in Singapore, especially for large MNCs. Singapore has become a one-stop center for businesses seeking to protect their IP assets. International organisations such as the Institute for Management Development (IMD), World Economic Forum (WEF), and the Political Economic Risk Consultancy (PERC) have all ranked Singapore top in Asia in this area. Singapore has strong copyright laws, and user-friendly system to register a trademark in Singapore. Singapore businesses can also file for global trademark registration from Singapore as the country is a signatory to major IP treaties and conventions, such as the Patent Cooperation Treaty, Budapest Treaty, Paris Convention, Berne Convention, Madrid Protocol, Agreement on Trade-related aspects of IP rights, and World Intellectual Property Organisation.
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