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Singapore - Premium Tax Haven

Updated on November 5, 2010
Singapore's Flag
Singapore's Flag | Source

- Business Environment -

Singapore is considered, by many businesses, to be a premium tax haven. The required fees paid to the Singaporean government are minimal in comparison to most other jurisdictions involved in multinational business. As a result of treaty negotiations between the Singaporean government and regulatory agents in other countries, the taxes paid to the investors’ home countries in many instances are nil. One example of this favorable tax agreement is the double tax network between Singapore and China.

Second to the United States (U.S.), China is the European Union’s (EU) largest trade partner and, as a result of the tax agreement, multinational companies incorporated in Singapore will benefit from the multilateral agreement between Singapore, China, and the EU. Additionally, Singapore has an amicable relationship with the North American countries participating in the North American Trade Agreement (NATA).

The Singaporean government presents a hassle-free process for investors wanting to establish operations in its country, and in most cases it takes less than four weeks from the date of the initial application to the approval notification. Many multinational companies as well as international banks already have a presence in Singapore, making it easy for the new businesses to establish financial operations in Singapore’s financial sectors.


- International Trade -

Singapore's Flag
Singapore's Flag | Source

There is no such thing as a global trade agreement. However, there exist trade agreements within member states of the EU, as well as a trade agreement between the three participating countries of NATA. The Singaporean government has established trade agreements with both the EU and NATA and, by default, Singapore receives double benefits from both the EU pact and the NATA pact.

- Singaporean Government’s Role -

Unlike many of the governments in other Southeast Asian countries, the Singaporean government has avoided corruption and scandal; additionally, it has played an integral role in the creation of the financial foundation upon which the multinational companies are being built. In recent years, the Government has become more transparent by inviting the business community in Singapore and governments from other countries to enter into discussions about the country’s financial infrastructure; which in turn, has led to Singapore becoming a major participant in the exchange of products and services in the industrialized world, instead of being the primary consumer it once was. Today, Singapore’s economy is the most prosperous in Southeast Asia with the highest per capita income the subregion.

- Business and Social Landscape -

In addition to the amicable trade relationship Singapore shares with the rest of the industrialized world, its also has vast cosmopolitan/multilingual business and social communities. People from European, North American, South American, and African countries investing in Singapore’s financial sectors are easily able to assimilate into the country’s social life.


Singapore's Seaport
Singapore's Seaport | Source

Singapore is the hub of the Southeast Asian export industries, and has the world’s busiest seaports in terms of total tonnage. Despite its authoritarian system of government, Singapore is viewed as a reliable, secure, and invaluable trade partner by the democratic world. Singapore’s choice of England as an official language gives it an advantage over other Southeast Asian countries in trade with the EU and North America.

- Why Singapore -

Companies from monopolies, to the oligopolies, to the purely competitive are finding Singapore a favorable place to establish their headquarters, and in turn, Singapore is continually upgrading its IT infrastructure to meet the ever-changing demands of these international consumers.

Many foreign governments work in conjunction with Singapore to provide multinational companies, considering moving to Singapore, significant investment opportunities such as the internationally recognized EU and NATA trade regulations, protecting intellectual properties, and enforcing of product safety standards. These well established laws and practices make Singapore a very advantageous choice for multinational companies wanting to expend into Southeast Asia.

Sources:

Index Mundi, http://indexmundi.com

The World Bank, http://worldbank.org

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