Starting a business in a new country can be both challenging and rewarding. Entrepreneurs face many common obstacles when starting a business in a new country, such as obtaining the necessary permits and licenses, understanding the local tax system, and building a customer base.
One of the biggest challenges for entrepreneurs starting a business in a new country is navigating the bureaucratic red tape. To create a business, you typically need to obtain various permits and licenses from the government. This process can be complicated and time-consuming, and it can be challenging to know which permits and licenses are required.
Another obstacle involves migrating your business to a new country. This process can be complicated, and you need to know the various tax implications. You also need to build a customer base in your new country. It can be challenging if you don’t understand the local market strongly.
Despite these challenges, there are many reasons why starting a business in Singapore can be beneficial. Obstacles will be present, but they are worth taking on if it means establishing a venture in a business-friendly country. Here are a few benefits you can get from starting a business in Singapore.
Attractive Tax Incentives
The Singapore government offers various tax incentives to businesses, making it an attractive destination for entrepreneurs. One of the most well-known tax incentives is the Corporate Income Tax Rebate, introduced in Budget 2018. The rebate gives companies a 50% tax rebate on their first SGD 30,000 (about USD 22,000) taxable income. It effectively reduces the corporate tax rate from 17% to 8.5% for small and medium-sized enterprises (SMEs). The corporate tax in Singapore is already attractive, but there is more the country has to offer.
The government also offers a tax deduction for research and development (R&D) expenses. It allows companies to deduct up to 200% of their qualifying R&D expenditure from their taxable income. The deduction is available for local and overseas R&D expenditures incurred between 1 January 2019 and 31 December 2023.
In addition, the Singapore government has various programs to help startups get started. These include the Startup SG Founder program, which provides mentorship, networking opportunities, and access to funding, and the Startup SG Equity program, which co-investment with accredited investors in startup companies.
These are just some of the attractive tax incentives the Singapore government offers businesses. When combined with the country’s other business-friendly policies, it’s easy to see why starting a business in Singapore can be beneficial.
Business-Related Accolades
There are plenty of business-friendly countries worldwide, which means Singapore is only among your options. However, its accolades are enough to keep it at the top of any entrepreneur’s list. Singapore is among the most consistent countries in the World Bank’s “Doing Business” rankings. In 2019, it was ranked as the second-best country to do business.
The rankings take into account various factors that make up a business-friendly environment. These include the time taken to start a business, the cost of starting a business, the availability of credit, and protections for minority investors. Singapore consistently ranks highly in all these categories, making it an ideal destination for entrepreneurs looking to establish their business ventures.
Singapore is also consistently ranked as one of the most competitive economies in the world. The 2020 Economic Freedom Index, compiled by The Heritage Foundation and The Wall Street Journal, ranked Singapore as the second-freest economy in the world. The Index looks at various aspects of economic freedom, including property rights, fiscal health, government size, and business freedom. A high ranking in the Index indicates a country that is friendly to businesses and provides a conducive environment for entrepreneurship.
World-Class Infrastructure
Singapore’s world-class infrastructure is another reason it’s an attractive destination for businesses. The country has an excellent transportation network, with a well-developed road, rail, and air network. It also has one of the busiest seaports in the world.
This world-class infrastructure makes it easy to get goods and services into and out of Singapore. This is important for businesses that rely on imported raw materials or export their products and services. The country’s infrastructure makes it easy to connect with other parts of Asia and the world.
Singapore also has an excellent telecommunications network. The country has some of the fastest mobile data speeds in the world. It also ranks highly in the “Fixed Broadband” and “Mobile Broadband” categories of the Akamai Technologies State of the Internet report.
This world-class infrastructure is one of the reasons Singapore is a hub for many multinational corporations (MNCs). In 2018, Forbes ranked Singapore as the third-best country for business. According to the World Economic Forum, it is the most “future-ready” economy.
The Singapore government is also investing heavily in upgrading the country’s digital infrastructure. This includes the development of 5G networks and the deployment of fiber broadband networks. The goal is to make Singapore a “Smart Nation” with a digitally connected population.
This investment in digital infrastructure will only make Singapore more attractive to businesses in the future.
Conclusion
Starting a business in Singapore can be beneficial due to the many attractive tax incentives, the robust infrastructure, and the favorable business environment. The country is also consistently ranked as one of the most competitive economies in the world. With its many advantages, Singapore is an ideal destination for entrepreneurs looking to establish their business ventures.
