Singapore Taxation, the Key Driver that Makes the Country Best for Doing Business for the Eighth Consecutive Year
The latest 2013 doing business report released by the World Bank unveils that Singapore has been ranked the best place for doing business out of 189 economies in the world. The erstwhile sleeping country has emerged into a world’s financial hub following its independence from colonial power and it has dominated the list for the past seven consecutive years.
The rankings were measured on the basis of 11 business life cycle events of each country’s regulations, including starting a company, dealing construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
According to the report, on average around the world, starting a business takes seven procedures, 25 days and costs 32 percent of income per capita in fees. However, it takes maximum three days to start a company in Singapore, which is lower than world’s and Asia’s average record.
Singapore company registration is simple and easy to understand. There are no restrictions on foreign ownership and 100% foreign shareholding is allowed. Furthermore, the minimum paid up value required for Singapore business incorporation is just S$1.
One of the key drivers that determine the country’s reputation of being the best place to do business is Taxation Singapore. The tax rates in Singapore are one of the lowest in the world. The headline corporate income tax rates are capped at 17%. Qualifying newly start-up companies are exempt from paying corporate tax Singapore for their first S$1 million of taxable income during the first three consecutive years of Singapore company incorporation. The effective Singapore company tax rate for profits up to S$300,000 is less than 9% while profits above S$300,000 are taxed at 17%. Additionally, absence of tax on capital gain, dividends, foreign sourced income and estate duty are the attractive tax benefits that the country has to offer.
Other positive factors that contribute towards Singapore’s business environment are its open and stable political system, liberal immigration policy, strict legal system, state of the art infrastructure, world’s best workforce and transparent business policies. The country has witnessed a heavy influx of foreign investors and entrepreneurs who intend to establish their business presence in the tiny island nation. The doing business report of World Bank serves to strengthen investor’s confidence in Singapore as the easiest place to do business.
The below listed table shows the individual ranking positions of Singapore in 11 business life cycle events that being released in doing business report 2013 by the World Bank.
|Sr. No.||Business Events||Ranking|
|1||Ease of Doing Business||1|
|2||Starting a Business||3|
|3||Dealing with Construction Permits||3|
|9||Trading Across Borders||1|
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