Understanding Singapore’s Business Environment
Are you planning to incorporate a company in Singapore?
While Singapore company incorporation is an easy application process, it is essential that you study the business environment because there are several factors that will affect the outcome of your decision.
These include the political, economic, social, technological, legal and ecological environments in which you will incorporate your Singapore company.
Here is a business environmental analysis that will help you familiarise with Singapore’s business environment and facilitate a smooth company incorporation and operation.
BUSINESS ENVIRONMENTAL ANALYSIS
Political Environment
The political structure of a country inevitably affects the way a business operates, as it is the political regime that will enact laws, sets regulations and policies.
Singapore’s parliamentary democracy system is well known for creating a stable and orderly government. The government provides first-rate efficiency and excellence in the public service sector, ensuring that any local or foreign individual wishing to incorporate a company can efficiently conduct business without red tape and bureaucratic delays.
Singapore is also renowned for its extremely low corruption levels within the government and it system.
Creating a pro-business environment with favourable tax laws and funding offers for business ventures has seen consistently ranked Singapore ranked as one of the best places to do business in the world.
It is also tanked as one of the most competitive nations and has several initiatives supportive of business start-ups.
Anyone can incorporate a company in Singapore. If you’re a foreign entrepreneur, all you need is to obtain an Employment Pass or EntrePass to incorporate a company.
Economic Environment
The economic trends of a country are very influential over business operations.
Singapore’s economy has shown continued resilience against most global crisis, and has rebounded with a record 13 per cent growth from the recent global economy downturn.
This rebound not only showed that the Singapore’s forward-looking and alert damage-control measures are always in place and working, it also shows the potential of even bigger growth in Asia’s top leading financial market.
Here are some economic indicators that will help you forecast possible future movement of the economies:
• Potential customer’s spending power
• Potential supplier’s pricing
• Interest rate
• Consumer price index
• Retail sales index
• Wholesale and manufacturing indices
• Inflation rate
• Exchange rate
Singapore’s economical policies on national income, labour market, productivity, investment commitment, and external trade are also consistently fine-tuning their plans to adjust to a dynamic and changing Asian market in order to meet business growth.
Social Environment
Successful enterprises often leverage on developed and integrated social communities. The education level of a people, work habits, culture, leisure activities and the role of women in the workforce will affect the viability of a business entity.
Singapore boasts one of the most competitive and well-educated workforces in the world, and it is renowned for its efficiency.
Its multi-cultural and cosmopolitan society makes it extremely easy for international and regional investors to set up headquarters in Singapore as a starting point to reach into the Asian market.
The Singapore government’s “Live, work and play” motto ensures that a variety of businesses can successfully operate in their chosen industries, with the right human resource boosting business growth.
Technological Environment
Singapore, described as a “plug and play” nation, is ranked number three as the most wired national in the world, and the most wired in Asia, with a broadband network that reached 99 per cent of the population.
Singapore’s electronics, pharmaceutical and biomedical industries are the leading boomers of both national and regional economy.
In the past few years, the country has been the leading innovator to set up several technological research institutes to build better and greener business infrastructure.
Technological advances have led to fast turnaround times for both retailers and consumers, hassle-free financial transactions, as well as the creation of new products at competitive prices.
The World Economic Forum ranked Singapore among the top 10 in the world for network readiness in 2002.
Legal Environment
Government statutes that oversee commerce, manpower, and other business-related areas are important to business owners.
Singapore has a compliance act that has to be strictly followed and entrepreneurs must abide by government laws on working hours, minimum wages, industrial production and taxation.
Business compliance includes the Employment Act, Taxation Act and the Central Provident Fund (CPF) Act.
The various taxes paid by businesses such as sole proprietorship, companies and GST have a direct impact on firms.
Ecological Environment
A long with technological advances, Singapore’s push to integrate green technology into its society has reaped many benefits.
Environmentally-friendly infrastructure such as Fusionopolis, ION, Orchard Central are some of the recent landmark achievements in the nation’s attempt to reduce its carbon footprint.
The government is has also laid out plans to build institutes dedicated to researching green technology and growing a pool of local talents to focus on improving business infrastructure while protecting the environment.
Mass Rapid Transit – Singapore’s public transport system, utilises electricity to run, and a plan has been launched to integrate the use of solar energy in SMBs and domestic households.
An Anti-Pollution act is also in place to oversee the impact of growing industries in Singapore.