Invest Asia Group in Singapore
Last Update: 25th September 2020
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Supertree Grove, SIngapore
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The country of Singapore is one of the world's most developed and richest countries with the economy being ranked as one of the most open throughout world. Being located on the southern tip of the Malaysian peninsula, this micro-state has the third highest GDP per capita in the world, despite lacking many natural resources. A stable political structure and pro business environment has attracted substantial foreign investment into Singapore with electronics, chemicals and financial services providing major revenue for the country.
Despite it's free market economy status, Singapore is a largely state capitalist economy with the government owning approximately 90% of all land whilst state owned enterprises contribute to a large proportion of the economy. With a low tax environment, high ease of doing business ranking, English speaking populace and other attractive reasons, Singapore is often the preferred choice for investment within Asia.
Despite it's free market economy status, Singapore is a largely state capitalist economy with the government owning approximately 90% of all land whilst state owned enterprises contribute to a large proportion of the economy. With a low tax environment, high ease of doing business ranking, English speaking populace and other attractive reasons, Singapore is often the preferred choice for investment within Asia.
Singapore: Overview
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The tiny micro-state of Singapore has the second greatest population density in the world and is a multicultural regional hub located in South East Asia. Being one of the world's richest countries with a high GDP per capita, Singapore offers a financial market economy, providing business and banking services to investors worldwide. Previously, Singapore was colonized by the United Kingdom and experienced substantial benefits (similar to Hong Kong) through establishing financial and commercial hubs.
Nowadays, through the Singaporean governments' sovereign wealth funds (GIC Private Limited & Temasec Holdings), account for a large share of total capitalization of Singapore listed companies on the Singapore Exchange (SGX). In addition, strategic sectors including banking, energy & infrastructure, biotechnology and tourism as well as a number of free trade agreements worldwide, have contributed to strong economic growth. With limited natural resources, the government embarked on investment in education, resulting in Singapore being the market within Asia offering the most English language speakers. Combined with the offshore tax benefits, Singapore continues to be an attractive country to invest. |
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Singapore Regions
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Singapore's territory consists of the main island as well as 64 islands and islets, of which a large proportion of them have been developed from extensive land reclamation.
Of these islands and islets, only 3 of them are inhabited by residents with another 4 used by the Singaporean military. Details of regions and districts of Singapore are outlined below:
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Singapore Planning Areas (Districts)
Within the 5 x regions outlined above, there are 55 different planning areas governed by the corresponding Community Development Council for each region. Details of each planning area is detailed as follows:
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Central Region Planning Areas
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North East Region Planning Areas
North Region Planning Areas
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West Region Planning Areas
East Region Planning Areas
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Business Operations in Singapore
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Operating a business in Singapore presents a number of opportunities and challenges, depending upon the business and industry. Aside from obvious business related risks, understanding and working within a foreign system presents challenges to foreign investors.
However, with a relevant strategy, professional advice and local team, these risks can be mitigated. Compared to the vast majority of countries and jurisdictions worldwide, Singapore is considered one of the best places to operate a business. |
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Forming a Company in Singapore
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Establishing a company in Singapore is a straight forward and easy process, as reflected in the country's high rankings on the 'ease of doing business worldwide' ranking. Investors worldwide incorporate companies in Singapore for its strategic location, low taxes and favorable operating conditions.
There are various types of Singapore entities available to incorporate including the following:
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Company Formation Procedure
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To establish a company within Singapore, the process and formation procedure are straightforward including the following steps:
Aside from the above standard procedures to form a company, there are also requirements, namely supporting documents (passports, personal details etc.) to apply for the company formation. Invest Asia Group strongly advises investors to engage either an experienced local consulting company or an international law firm to navigate these processes. |
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International Investors
Whilst there are certain restrictions within specified negative investment industries, international investors/companies can operate businesses in Singapore. Singapore welcomes foreign investment and is a highly reputable country with a stable banking industry to conduct business and offer business opportunities to foreign investors.
Corporate Taxes
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Singapore is an attractive country to operate a business in due to its low taxes, territorial tax system and incentives available for companies. Details of corporate taxes and rates are outlined as follows:
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Where to establish
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This depends upon your business type and goals for doing business in Singapore. Some investors choose to operate 'on the ground' in Singapore whilst others choose to establish a Singaporean shelf company and operate from outside of Singapore to take advantage of the tax friendly policies and ease of business. Please advise your business type and specific goals for Singapore when contacting our team.
Some of the specific locations within Singapore popular with establishing an 'on-the-ground' company with operations in Singapore include the following locations:
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Tax-Friendly Policies
Yes – a number of tax-friendly investment policies exist to encourage investment within specific sectors and industries. Further details can be provided, depending upon your specific inquiry and interest.
Financial Markets in Singapore
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Singapore has some of Asia's (and the world's) most developed financial markets, making it one of the most popular locations to invest in Asia. With a simplified low tax regime combined with territorial tax system, investors worldwide have been attracted to Singapore's financial hub status.
The main financial industries within Singapore include various forms of banking (investment, wealth management etc.), insurance markets as well as capital markets. To begin with a brief overview of the Singapore Exchange (SGX) is outlined below. |
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Singapore Exchange (SGX)
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The Singapore Exchange was first founded in 1999 and is an investment holding company located in Singapore providing different securities and derivatives trading services. Within the Singapore Exchange there are different divisions, of which each division is responsible for different business. Details of these divisions are as follows:
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Singapore Exchange (SGX) Products
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As listed on the Singapore Exchange (SGX), there are a number of different products available including:
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Other ways to get exposure to Singapore Stocks
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Aside from the aforementioned ways to gain exposure to Singaporean companies, investors also have options to invest in Index Funds and Singapore stocks listing in US and international markets. There are a number of different Singapore related Exchange Traded Funds (ETFs) and some of the larger individual Singaporean stocks listing on American stock exchanges include Singapore Telecommunications, Asian Pharma, Singapore Airlines, United Overseas Bank and more.
Most brokers will offer access to Singapore exposure ETFs and individual stocks listed on the US stock markets. Singapore offers an economic environment with attractive tax policies and as an offshore jurisdiction in Asia, will provide excellent future prospects for investors. |
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Foreign Exchange
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The Singapore Dollar is the official currency of Singapore and the thirteenth most traded currency in the world. It's a free floating currency and in line with its financial market economy, there are no capital controls within Singapore.
Through economic liberalization and a development of financial markets at a strategic location within South East Asia, Singapore offers excellent investment flexibility for international investors. For further details relating to Foreign Exchange in Singapore, please contact the Invest Asia Group team directly. |
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Commodities
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As a micro-state on the tip of the Malay Peninsula, Singapore has very limited natural resources. However, it transformed itself into a highly developed country through a number of different measures. Despite its status as a developed country with one of the highest GDP per capita rates in the world, the lack of natural resources has required investment in human capital via education and external trade. Nowadays, as a major finance and shipping hub, Singapore imports and exports a range of commodities of which details are outlined below.
For reference, some of the major commodities Singapore imports include:
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As a refining and oil-trading leader, Singapore supplies throughout the entire region and Oceania. Regarding other notable imports, Singapore imports integrated circuits, computers, semiconductor devices, broadcasting equipment and office machine parts whilst it's services sector is a large contributor to GDP.
As for exports, the major commodities Singapore exports includes the following:
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Aside from commodities some of the other exports other products with some of the main ones being integrated circuits, computers, semiconductor devices, gas turbines and broadcasting equipment. Most exports go to China (including Mainland and Hong Kong) as well as Malaysia, Indonesia and the USA.
Within Singapore, the Singapore Exchange offers derivatives commodities trading including the following different commodities:
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Cryptocurrency in Singapore
Within Singapore, cryptocurrency is classified as 'goods' meaning GST (Goods and Services tax) is applied. Both cryptocurrency exchanges and trading are both legal, despite it not being classified as a legal tender. However, in comparison to other countries within the region and combined with the low tax environment and no capital gains taxes, cryptocurrency is a popular option within Singapore.
For further details and information relating to cryptocurrency within Singapore, please contact the Invest Asia Group team directly to find out more. |
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Property in Singapore
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The Singaporean property market is unique within Asia whereby a dual market exists consisting of subsidized housing via the the Housing & Development Board (HBD) and non subsidized housing. The latter is available to foreign investors.
Typically, subsidized housing are units sold by the HBD to the public on a 99 year lease. Provided the minimum occupancy period has been completed, these units can then be sold second hand and pricing isn't regulated by the HBD. By providing subsidized housing, Singapore has largely avoided housing related social issues (such as in Hong Kong). |
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International Investors & Singaporean Property
Yes and no. Singapore has very strict property ownership laws whereby foreigners are only permitted to purchase certain houses/units according to regulations (as outlined above). In terms of subsidized housing, only Singaporean and permanent residents of Singapore can purchase subsidized housing provided by the HBD.
Foreign investors don't have any limits on purchasing private apartments or condominiums whilst commercial real estate has no restrictions for foreign investors. |
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Property Taxes
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Due to the booming Singaporean housing market throughout the 2010s, the Singapore Government imposed a number of different duties & taxes on foreign investors. Pricing varies depending upon location but overall, Singapore has some of the world's most expensive property.
Details of costs associated with buying and selling property (overview) are outlined below as follows:
For further details regarding costs associated in purchasing Singaporean property, please contact the Invest Asia Group team directly. |
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Best Locations to Purchase Property
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Singapore has had a hot property market over recent years, resulting in the Singaporean government imposing additional fees on foreign investors. However, property in Singapore is still in high demand and a number of areas throughout the country are popular, depending upon investment goals.
Some of the more popular locations in Singapore to purchase property include the following areas:
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Venture Capital/Private Equity in Singapore
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Venture Capital & Private Equity plays a large part of the Singaporean economy and has resulted in a number of successful startups throughout Asia and Worldwide. Being a financial trading center with appealing tax system and high ranking for ease of doing business, Singapore has previously and continues to attract funds and startups.
Some of the most successful startups founded in Singapore include the following companies:
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