Reasons Why MNCs and SMEs are Setting Up a Business in Singapore
Singapore is Ranked second in the East of Doing Business Report 2020 by the World Bank, and hosts the largest number of headquarters in the Asian region. The country is home to about 46% of regional headquarters in Asia, in addition to hosting the regional headquarters of 59% of global technology MNCs. The country has over 37,000 international companies, including 7,000 MNCs with their regional headquarters in the country.
Singapore has been a hotspot for many businesses and entrepreneurs. Here are the top 3 reasons why they set up a business in Singapore:
1. Strong, competitive economy
With its ever-growing economy, and being the financial hub for the Asia Pacific region, Singapore has positioned itself in a pivotal role as a business epicenter within the heart of Asia.
That is one of the major reasons why MNCs continue to favor Singapore as a preferred business destination for incorporating a Singapore company. Most MNCs stand to benefit from Singapore’s open business and business-friendly policies.
2. Company setup incentives
To encourage MNCs to come to Singapore and set up a base of operations, Singapore’s Economic Development Board offers these companies International Headquarters Incentives (IHQ) and Regional Headquarters Incentives (RHQ).
Companies that successfully get conferred with the RHQ status will reap the benefits of a concessionary tax rate of 15% for up to 5-years for all qualifying income which is derived from activities and business operations conducted in Singapore. Whereas companies who obtain the IHQ status, on the other hand, enjoy tax rates of 0 to 10%.
3. Progressive tax system
Designed with entrepreneurship growth in mind, its attractive and low corporate and personal tax rates are a big reason why MNCs continue to choose Singapore over any other country.
Singapore also has an extensive network of free trade agreements and double taxation agreements, both of which help to facilitate and safeguard the interests of Singapore’s investors.
As Singapore continues to cement itself as one of the best places in Asia to incorporate a company, thanks to its strategic location, stable economy, tax relief, and equally stable political environment, and its top-notch infrastructures, Paul Hype Page & Co can predict there will only be more coming in the near future.
How Singapore Companies Can Establish Themselves as a Multinational Corporation?
Aside from bringing MNCs and foreign investors into Singapore, the government are also helping local companies to go global.
There are grants and schemes that are initiated to bring Singaporean companies overseas as the first step to establishing an MNC status.
1. Market Readiness Assistance (MRA) Grant
Aimed at business expansion, the MRA grant is created for local Singapore companies to take the leap into other jurisdictions. The grant covers 3 key areas and is capped at S$100,000 per new market.
- Overseas market promotion
- Overseas business development
- Overseas market set-up
2. Strategic Brand and Marketing Development Grant
The strategic brand and marketing development grant is to help local companies to strengthen their branding. This is a crucial step before taking your business into new countries as businesses need to have a good foundation for access.
3. Market Access Grants
Under the market access support, local businesses can tap on 3 key grants:
- Mergers & Acquisitions (M&A)
- Pilot Project & Test Bedding
List of some of the MNCs that have set up a base in Singapore
||Ernst & Young
||Kentucky Fried Chicken
||Far East Organization
|Bank of America Merrill Lynch
||Fraser & Neave
||Marina Bay Sands
||Micron Semiconductor Asia
||Standard Chartered Bank
|Dairy Farm International
||InterContinental Hotels Group
||Panasonic Asia Pacific
||Johnson & Johnson
||Procter & Gamble