Why Singapore Is the Business and Financial Center of Asia-Pacific

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The world is again waking up from its forced slumber due to the COVID-19 pandemic. A new surge of energy is now sweeping the business community, fueled by optimism for the future. There is a realistic understanding of the present economic challenges and the obstacles that need to be hurdled. Whatever excitement there is for resuming business operations is tempered by information that will help business leaders make the right decisions in the months to come.

One such major decision that could spell success or failure is the choice of country of business. For those who have traveled to Asia for business, they know that Singapore is second to none when it comes to being business-friendly even to foreign companies.

But before tackling why Singapore is a preferred country for business, it is worth noting that frequent flyers and first-timers in the Lion City never cease to be amazed by Changi Airport. It is clearly one of the best airports in the world. Whether for business or leisure, engaging in some Changi Airport shopping is simply irresistible due to the wide range of top brands available.

The 8.6-square-mile airport has been designed to incorporate nature in its interior design, as evidenced by hundreds of tree and plant species that make the interior look fresh and green. Aside from cinemas and rest lounges, the airport also has a dedicated area for children. And there are more than 80 shops and restaurants to choose from. Indeed, walking through and shopping at Changi Airport are already a special experience unto itself.

Lowest Tax Rate

Perhaps the best reason many foreign investors, global corporations, and even startups go to Singapore is that it has a very competitive corporate tax rate. The flat tax rate for both local and foreign business entities is still at 17 percent, the lowest in the region.

Thailand currently charges up to 20 percent, while South Korea’s rate ranges from 22 to 24 percent. Vietnam is pegged at 25 percent, while Japan is slightly higher at 25.5 percent. The United States had a high corporate income tax at 35 percent, but it has recently been lowered to 21 percent.

By the taxes alone, the city-state is very attractive to business people and global firms. The fair tax structure has attracted more than 7,000 multinational companies to set up their regional headquarters in the Central Business District (CBD) of Singapore, which is near the famous Marina Bay and Chinatown.

Excellent Record in Governance and World-class Infrastructure

When investors look for a country, they look at the performance of the government. Governance is important to business since it is the determinant of whether international and national laws pertaining to business transactions are observed. Rule of law is very strong. And for business, this translates to the fact that business contracts are respected and that intellectual property rights are upheld.

There is also zero tolerance for corruption, as evidenced by the prison sentences being served by high government officials who were found guilty of corruption in court. When a government is fair, clean, and lawful, business people and investors have confidence that their money is secure.

Singapore also has a world-class infrastructure. It has consistently been ranked as one of the top cities in the world in terms of urban infrastructure and quality of life. In studies, it has been shown that infrastructure and quality of life are interrelated. Hence, Singapore takes the lead by making sure that both aspects are given sufficient investment and sustainable government programs to benefit not only nationals but even expatriates who have made Singapore their home.

Center of Finance in Asia

Singapore remains the financial hub of Asia-Pacific, servicing at least 60 percent of all global banks that operate in the wide region. It is also one of the most trusted finance areas for wealth management, attracting the world’s elite and other high-net-worth clients.

The country also exports chemicals, electronics, and various services, which enables it to generate national revenue. It is then used to buy raw materials for production. While Singapore is just a small city-state with limited natural resources, proper environmental management, sound fiscal policies, and correct use of government funds have made the country financially stable and economically resilient.

Why You Should Try to Do Business in SG

Aside from the remarkable characteristics of Singapore mentioned above, another reason it is a great venue for business is its multicultural society that has created a space for different people to coexist and build a shared, prosperous community. The sophisticated city-state is also strategically located in Southeast Asia, making other business centers, such as Shanghai, Hong Kong, Tokyo, and Taiwan, all within easy reach.

From its struggles in mid-1960s, after it chose to be separate and independent of Malaysia, Singapore has grown into a First World country. It offers the best of business, leisure, and culture to anyone willing to put in the effort and those who desire to contribute to the city-state’s continuing progress.

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