In the labyrinth of global commerce, deciding on a location for your business setup is akin to choosing a path in a maze.
The choice can lead to flourishing growth or unforeseen challenges.
Amidst the myriad of options worldwide, Singapore emerges as a beacon of opportunity, its allure underpinned by a stable political climate, robust economy, and conducive business environment.
This article is written by business consultants who processed thousands of cases.
It suggests systematic approach to the choice of jurisdiction for incorporation and finally leads us to the conclusion that Singapore is the best country for business setup.
This journey into understanding why Singapore stands out as the premier destination for business ventures intertwines the offerings of SAVVY PLATFORM, a quintessential ally for businesses striving to make their mark in the Lion City.
How we usually make a choice and how we should choose the optimal country for a company incorporation.
When it comes to setting up a company for international business, business owners and founders make their choice usually by copying business structures from other projects.
Near half of them try to understand what the advantages and disadvantages of their choice will be.
And just a few seek professional advice usually asking lawyers.
Though it feels like the latter is the right thing to do, in practice it is still insufficient.
The lawyers can tell what is written in the law.
However, they don’t have an idea how the law will be applied to a particular project, that is, how the choice of the country of incorporation will affect operating, financing, and investing activities.
Each country offers a unique set of parameters and conditions for business entities to set up and operate, making this country more or less suitable for the project.
We need to assess all the parameters together for different jurisdictions and compare them to make the right choice that will support our business endeavours.
Now it’s time to look at these parameters closer.
There are two types of conditions:
- General; and
- Specific.
General conditions characterize the business infrastructure as a whole, while specific conditions create advantages or obstacles for the development of individual industries or projects.
General Characteristics of Business Environment
Geographical location
The location may give certain advantages for international businesses, like the following:
- proximity to customers;
- proximity to suppliers;
- regional/global connectivity and so on.
Political, Economic and Social Stability
Stability is a foundation of sustainable growth and economic resilience.
Stable countries are also more attractive to investors.
The Size of the Economy
The size of the country’s economy indicates the potential of projects it can adopt.
Though it’s not the case for small businesses, ambitious projects with global potential should start in the country whose annual GDP is above 100 billion US Dollars.
GDP Per Capita
Shows living standards in case you plan to relocate to the country.
It also shows the average purchasing power of individual customers in this country which is important for B2C and for D2C projects.
Legislative System
There are two main legal systems in the world – Continental legal system, or Civil Law, and British Legal System, or Common Law.
To start a company under Civil Law, substantial capital is required, while Common Law countries allow to establish an entity with literally one dollar or pound.
That’s why Common Law countries are preferrable for small businesses and startup projects with very limited initial financing.
Conclusion:
Based on general characteristics, we need to look for countries that satisfy the following criteria:
- strategic regional or global location;
- politically, economically and socially stable;
- annual GDP is above 100 billion US Dollars
- the legal system is based on the Common Law.
High GDP per capita may also be a plus.
Specific Characteristics of Business Environment
Currency and Currency Control
Freedom to operate in different currencies boosts international trade and makes countries with open economies more attractive for international business.
Taxation
High taxes decrease the motivation of projects to grow, while no taxes is considered attractive for high-risk and suspicious projects.
The best option from the point of view of taxation is the country where taxation is reasonable.
Accounting Rules and Practices
Most countries use International Financial Reporting Standards, while the USA uses generally accepted accounting principles or GAAP.
This creates difficulties for foreign companies who want to operate in the US market, so affects the choice of the country of incorporation.
The adoption of IFRS makes financial reporting very similar in different countries and the company easier to operate.
So it’s no wonder that many foreign entrepreneurs choose Hong Kong for doing business with the mainland China: Hong Kong Financial Reporting Standards (HKFRS) have been fully converged with the IFRS, while China has its own accounting standards.
Local Infrastructure for the Companies Incorporation
Includes professionals who can support foreign entrepreneurs to start a company in that country.
Local Infrastructure for the Companies Administration
Supports the company and its founders after incorporation.
Conclusion:
Based on specific characteristics, the desired country for international business should have:
- economic freedom in terms of unrestricted foreign currency conversion;
- moderate or reasonable taxation;
- accounting standards that are relevant to the geography of the business;
- established infrastructure for the Companies Incorporation;
- established infrastructure for the Companies Administration.
Top Five Countries to Consider for Business Setup
After analysing general and specific characteristics and comparing them for different countries, we have finally got the top 5 destinations to consider in 2024 for international business set-ups for technology startups.
UAE
Pros:
✅ strategic location;
✅ economic freedom;
✅ high annual GDP and GDP per capita;
✅ very good infrastructure for doing business;
✅ IFRS used for accounting;
✅ Foreign founders can legally migrate to UAE;
✅ UAE is a fast-growing startup hub with plenty of options in terms of business entity types.
✅ English is widely spoken.
Cons:
❗ English is not the official language – there may be differences between what is written in Law in Arabic and the English translation.
❗ UAE were once included in the FATF “grey list” (released from the list in February 2024) which means close monitoring from global regulators due to insufficient compliance standards;
❗Bank account opening could be a challenging task.
❗Former tax haven.
❗Tax system is still evolving showing the country’s transition from no tax to reasonable tax jurisdiction.
UK
Pros:
✅ strategic location;
✅ economic freedom;
✅ high annual GDP and GDP per capita;
✅ very good infrastructure for doing business;
✅ IFRS used for accounting;
✅ UK is a motherland of the Common Law system boosting entrepreneurship with simple requirements for starting a company, like minimal paid-up capital;
✅ London is among the top 5 global financial centres, which makes it possible to list the project on the stock exchange in the future;
✅ In terms of the number of startup projects, the UK is No.3 in the world, according to StartupBlink’s study.
Cons:
❗Economic uncertainty the country has been facing over the recent years.
❗High personal and corporate taxes.
TCOYR (The Country of Your Residence)
Pros:
✅ economic freedom;
✅ #1 nominal GDP;
✅ high GDP per capita;
✅ very good infrastructure for doing business;
✅ The most populated startup ecosystem in the world;
✅ Using common law;
✅ Most of the investors are based in the USA.
Cons:
❗ Highly-competitive and stressful environment.
❗ GAAP.
❗ Growing instability over the recent years.
❗ High taxes.
TCOYR (The Country of Your Residence)
Pros:
✅ This is the country where your project can get the most support from your immediate network;
✅ Good enough for an early stage;
✅ The country you know the best at the moment.
✅ More options to control your business and get necessary support.
Cons:
❗Maybe not the best option in terms of incorporation procedures, infrastructure, taxes and long-term strategy.
Singapore
Pros:
✅ strategic location;
✅ economic freedom;
✅ high annual GDP and GDP per capita;
✅ very good infrastructure for doing business;
✅ IFRS-based accounting;
✅ Foreign founders can legally migrate to Singapore;
✅ English is an official language – all the Singapore laws are written in English.
✅ Common Law-based legal system;
✅ Belongs to the top 5 global financial centres;
✅ Moderate taxation;
✅ Foreign founders of Singapore companies can legally migrate to other countries (e.g. remote working visa etc);
✅ Good for both operating and holding purposes as there is no capital gain tax in Singapore.
Cons:
❗ Relatively small startup community.
Why is Singapore rated so high?
Let’s look at the parameters of the country.
A Gateway to Asia and Beyond
Singapore is strategically nestled in the heart of Southeast Asia, serving as a pivotal gateway to the thriving markets of China, India, and the Association of Southeast Asian Nations (ASEAN).
Its world-class port and airport facilities ensure seamless global trade, offering businesses an unparalleled advantage in logistics and connectivity.
Unwavering Economic Resilience
Singapore's economy is the epitome of resilience and growth.
With its commitment to free trade, sound monetary and fiscal policies, and a corruption-free environment, it offers a stable foundation for businesses to flourish.
The nation's economic stability is not just a boon for domestic enterprises but also serves as a magnet for foreign investment.
Cutting-Edge Technological Ecosystem
Singapore’s investment in technology is unmatched.
From high-speed internet connectivity to state-of-the-art research facilities, the city-state provides a fertile ground for innovation and digital ventures.
This technological ecosystem propels businesses, especially those in fintech, biotech, and e-commerce, towards exponential growth.
A Pro-Enterprise Legal Framework
The Singaporean legal system is renowned for its fairness and efficiency, providing a secure legal framework for business operations.
Intellectual property protection, streamlined regulatory procedures, and a transparent legal system are pillars that support enterprise and innovation.
Tax System to Incentivise Growth
Singapore's tax system can be described in just a couple of words:
a) territorial; and
b) one-tier.
The territorial principle of taxation encourages Singapore companies to intensify sales outside the country and develop new markets.
The one-tier approach relates to income distribution.
Once taxed, the income can be distributed with no additional taxes.
Read the article to find out more about Singapore Tax System.
The Role of SAVVY PLATFORM in Enhancing Business Synergy
Embarking on a business venture in Singapore is made significantly easier with the support of dedicated platforms like SAVVY PLATFORM.
By tapping into the expertise of a seasoned team of business administrators based in Singapore, businesses can navigate the complexities of setting up and running an enterprise in this dynamic city-state with ease.
Tailored Services for Diverse Business Needs
SavvyStart: affordable all-inclusive packages
For new businesses, the journey begins with incorporation.
SAVVY PLATFORM offers an array of services under SavvyStart, guiding businesses through the intricate process of setting up a legal entity in Singapore.
This includes everything from company name checks to statutory compliance, ensuring a smooth start.
SAVVY Smart: Tailor-made solutions for sophisticated users
SavvySmart is like LEGO bricks for Singapore Company incorporation.
You can approach us to find an office space or to hire a full-time or part-time Director and/or Secretary.
Here you can apply for a long-term visa to Singapore for foreign employees or register your trademark.
For any specific requirement, please send us a request, and we will suggest a solution.
SAVVY Secretary: Comprehensive Administrative Support
Statutory compliance is a crucial aspect that cannot be overlooked.
Savvy Secretary services cater to the need for meticulous record-keeping and compliance, safeguarding businesses from potential legal pitfalls.
This service covers ordering official documents after incorporation, filing changes of particulars of the Company, translation to/from English and handling other administrative tasks that arise from time to time or on a regular basis.
Enabling Focus on Core Business Objectives
By handling the essential yet mundane tasks of administrative paperwork, business licensing, and compliance, SAVVY PLATFORM frees up businesses to concentrate on their primary objectives. This symbiotic relationship fosters enhanced productivity and business growth.
The Competitive Advantage
The support structure provided by entities like SAVVY PLATFORM illustrates a fundamental reason behind Singapore's appeal to businesses worldwide.
It's not merely the economic stability or the strategic location that makes Singapore attractive but also the ecosystem that nurtures and sustains business growth.
By choosing Singapore, companies gain more than a base; they gain a competitive edge in the global marketplace.
A Dynamic and Skilled Workforce
Singapore boasts a highly educated, proficient, and dynamic workforce, fluent in English and often bilingual, making it an ideal hub for international businesses. The talent pool is not only tech-savvy but also well-versed in navigating the complexities of global commerce.
A Vibrant Hub for Innovation and Entrepreneurship
The nation’s dedication to fostering innovation and entrepreneurship is evident in its myriad of incubators, accelerators, and government grants aimed at supporting startups and SMEs. Singapore's vibrant ecosystem is designed to transform vision into reality, offering unparalleled opportunities for business growth and innovation.
Conclusion: Embarking on Your Singapore Business Journey with SAVVY PLATFORM
Singapore's standing as the best place for business setup is undisputed.
With its strategic location, economic stability, unparalleled business infrastructure, and pro-business legal framework, it offers fertile ground for businesses to thrive. However, the journey doesn’t stop at the decision to set up in Singapore.
It begins anew with the challenges of incorporation, statutory compliance, and navigating the local business landscape.
This is where SAVVY PLATFORM steps in as an invaluable ally.
With SAVVY PLATFORM's array of specialized services, businesses are not just setting up but are empowered to thrive, innovate, and expand.
As we champion your venture from groundwork to growth, the symbiotic potential of our partnership becomes clear.
By choosing Singapore as your business base and SAVVY PLATFORM as your guide, you're not just choosing for today but investing in a legacy of success for tomorrow.
Reach out to us to embark on your journey of setting up and growing your business in Singapore - your gateway to unparalleled business success.
Feel free to contact us for more information or to start your success story in Singapore:
- Contact Us
- E-Mail us: iamsavvy@iamsavvy.com.sg
- Call us: +65 9711 8886 (Singapore) | +7 707 6836458 (Kazakhstan)
For pre-consultation and to check the availability of your company name, visit:
At SAVVY PLATFORM, we pave the pathway to your success in the global business arena, leveraging Singapore's dynamic and promising business environment.
Join us in this venture to elevate your business to new heights.
