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Singapore is ranked 1st for its ease of doing business in Asia by both The World Bank Group (Economy Rankings: Doing Business, The World Bank Group 2009) and PricewaterhouseCoopers (Cities of opportunity: Business-readiness indicators for the 21st century, PricewaterhouseCoopers 2007). Singapore was also ranked first for being the most cost-competitive place for business by KPMG (KPMG Competitive Alternatives Study 2006).
Singapore's dynamic economy is fueled by a genuinely open policy towards businesses, making it one of the most business-friendly countries today. It consistently ranks high on global and regional rankings for its attractive corporate tax rates, ease of hiring and well-developed infrastructure.
The country's stable political landscape presents an attractive low risk assessment to many international business operations. In fact, Singapore attracts both MNCs and start-ups alike. These businesses have benefited from the highly-skilled workforce, low tax regimes and test bedding opportunities.
For entrepreneurs, the business friendly policies, simple application procedures and even government funding, makes it really easy to register and start a business here.
Foreigninvestorsand entrepreneurs are setting up businesses in Singapore because it is a doorway to almost all of the Asian markets.
What Singapore Has to Offer
Singapore is easily accessible by air or by sea. Singapore's port is one of the busiest in the world. The Changi Airport allows you to connect to over 180 cities worldwide. Incorporating a Singapore business entity is a smart move since the location allows you an easy geographic access to all premier Asian markets.
Setting up a business in Singapore allows you to cater to many cultures, and thus, a wider market.
Stable Legal System
Singapore has an efficient, transparent and sound legal system.
Singapore has a stable, pragmatic, rational and proactive government. You can be assured that setting up a Singapore business entity will not involve red-tape or bureaucratic delays.
Liberal Immigration Policies
The liberal Singapore immigration policies allow for an easy relocation of foreigners who want to set up their businesses in Singapore.
Singapore is known for its attractive schemes for foreign entrepreneurs. Setting up and doing business in Singapore is easy. It will only take you 1 to 2 days to incorporate a business in Singapore.
Attractive Tax Schemes
Singapore offers low effective personal and corporatetaxrates. The Personal income tax has a tier system that starts from 3.5% and up to 20% for those withincomeabove $S320,000.
Effective corporate tax rate for Singapore private limited companies with profits of up to S$300,000 per annum is less than 9%. While those withprofitsof up to S$300,000 have a 17% tax rate.
Singapore's single-tier tax policy provides that once the income has been taxed at the corporate level, the dividends can be dispersed to shareholders free of taxation.
Furthermore, Singapore has one of the lowest Goods andServicesTax(GST) rates, which is only 7%.
The infrastructure of Singapore is highly advanced. Singapore's physical and research infrastructure helps make setting up your Singapore business uncomplicated.
Free Trade Agreements
FTA's or Free Trade Agreements allows you and your business to enjoy benefits such as tariff concessions, exclusive access to certain sectors, speed market entry and Intellectual Property (IP) protection.
The work-force of Singapore is competitive, productive and meets world-class standards. Its work-force is known for its high educational level, excellent output, proficiency, industriousness, professionalism and technology-savvy culture.
To cater to people who wish to migrate, Singapore presents different options for migration. These are:
- Migration to Singapore using theEmployment Pass(EP);
- Migration to Singapore using theEntrePass(Entrepreneur Pass);
- Migration to Singapore using the MAS Scheme; and
- Migration to Singapore using the EDB Scheme.
- Singapore enjoys a stable political system, following the country's second change of leadership in 40 years, with Lee Hsien Loong - son of the nation's founding father Lee Kuan Yew - taking over as prime minister in 2004.
- Official promises have been made to eradicate Singapore's reputation as being an overprotective nanny-state, with efforts to enhance freedom of expression.
- Singapore is not a properly functioning democracy. The ruling People's Action Party (PAP) has all but two seats in parliament, and the opposition is restricted from campaigning through tight control over political debate and frequent use of libel laws.
- The government has yet to improve the situation for the less well off in Singapore, with a rising wage gap between the top earners and the lowest paid.
- Lee is proving himself a capable leader, moving away from the shadow of his father by taking on the role of finance minister and repeatedly calling for more openness.
- Singapore is leading its regional neighbours in signing free trade agreements. Increased regional integration is likely to give the island more influence in the region.
- There are fears that Singapore's foreign policy alignment with the US will cause the tiny city-state to become a target for terror attacks launched by Muslim extremists.
- Singapore's close relationship with the US, with military ties expanding significantly, may rile other Asian countries. This will make it harder to establish closer regional security ties.
- Singapore controls monetary policy by managing the exchange rate against an undisclosed basket of currencies. This has accommodated the revaluation of the Chinese yuan with little instability amid continued gradual appreciation of the Singapore dollar.
- Singapore's current account surplus remains over 20% of GDP and its external finances are in good shape. This is reflected by the world's credit-rating agencies, which continue to award Singapore top marks for external strength.
- Volatile economic output remains a problem given that the tiny, trade-dependent economy is so exposed to global trends in demand for electronic goods, which account for around half of Singapore's non-oil exports.
- Singapore faces a number of long-term economic problems. Productivity is low, competition from low-cost neighbouring countries is on the increase and structural unemployment is placing a growing burden on the economy.
- In the face of regional challenges for both its exports and investment, the government is encouraging economic diversification to boost the country's competitiveness. New areas being promoted are biomedical sciences, tourism, medical and financial services, as well as plans to develop two casino resorts.
- There is significant state involvement in the private sector, with the government refusing to disclose the assets of the Government of Singapore Investment Corp (GIC). The GIC is one of the world's largest institutional investors, managing foreign exchange reserves and government funds worth over US$100bn. Without increased openness, investor confidence could be damaged and domestic growth hindered.
- High labour costs will continue to be an issue as long as cheap labour in China continues to undercut Singapore's competitiveness.
- Singapore is the least corrupt country in Asia, according to Transparency International, a Berlin-based anti-corruption watchdog.
- Strikes and labour protests will remain rare, if not absent, in Singapore for the foreseeable future due to the government's autocratic insistence on a business-friendly environment. Policymakers will continue to use heavy-handed tactics to ensure the unions stay pliant.
- Industry deregulation is advanced in the oil sector, with a mature competitive landscape and a good location for regional refining and petrochemicals capacity.
- Political and economic stability has come at a price. The Singapore government censors the media and limits the distribution of foreign publications. The judiciary's record of siding with prominent politicians calls into question the true extent of its neutrality in any contract dispute involving a politically sensitive issue.
- Competition from other Asian states in refining and petrochemicals is rising, putting pressure on margins and returns.
- Due to the lack of progress at the World Trade Organisation (WTO), the Singaporean government has committed the country to sign 19 bilateral free-trade agreements.
- Singapore has one of the best business operating environments in Asia. This is reflected by Singapore's second place in an Index of Economic Freedom league table complied by the Heritage Foundation and the Wall Street Journal.
- Strong growth in regional oil and chemicals demand provides scope for capacity expansion.
- The risk of a terrorist attack in Singapore, which has increased since the Bali bombings in neighbouring Indonesia in 2002 and 2005, is a major deterrent to foreign investors, who are concerned about the spread of Islamic terrorists to Singapore.
- China is now seen as the key regional market and much of IOC downstream oil and petrochemicals FDI may be diverted away from Singapore.
The social strengths of Singapore have been demonstrated by an educational system that produces a well-educated workforce to attract foreign direct investment (FDI). Not only developing its own pool of local talents, Singapore also recruits foreign talents to work in both the public and private sectors. Most FDI in Singapore was from Multi-national Corporations (MNCs) and foreign Small and Medium Enterprises (SMEs), which are familiar with the operations of e-Government. Ultimately, these corporations will engage in e-Services to cut costs and to improve their operations. They need employees with IT proficiency and the ability to learn fast.
A tech-savvy population and a well-educated IT labour force can participate in e-Government projects and can use these services effectively. The Singaporean government has introduced the National IT Literacy Program equipping .workers, homemakers and senior citizens. with basic computer and Internet skills (Tran 2003; Hu 2002). The e-Ambassador program has engaged celebrities to attract participants (Tran 2003). Non-IT trained civil servants can attend training sessions offered by the Civil College or the Infocomm Development Authority of Singapore to acquire the necessary IT knowledge and skills to improve their performance. Nobody is excluded from this e-Project. The PC Re-use Scheme, initiated by the National Trade Union Cooperation, has provided affordable computers (either to sell or rent) to nearly 2,000 needy families in Singapore (Raoul 2001). .A network of Internet-enabled terminals at civic locations. has also been set up so that the public can easily and conveniently search the Internet (Hu 2002). Technologically, Singapore has a high-tech based economy. Wellprepared infrastructure and the latest technology contribute to the rapid development and deployment of e-Services. Government agencies can share resources and services such as .payment, authentication and data exchange. that are .built-once, reuse-always. by employing available IT applications (Faculty of Business and Economics - Research Committee 2004: 2). As mentioned previously, security issues are also received much attention from the government.
E-GOVERNMENT IN SINGAPORE.A SWOT AND PEST ANALYSIS
118 ASIA-PACIFIC SOCIAL SCIENCE REVIEW
Last but not least, innovation cannot be omitted in a knowledge-based economy with a web-based government. It is argued that .a spirit of innovation. is the key to the success of countries as well as to organizations (PS21 Office 2001). Technology, IT, ICT or other inventions become out-of-date quickly. Thus, continual innovation and creativity for better products and processes helps organizations and countries tackle the problems of obsolete technology. Lambe comments that .Singapore.s innovation credentials are quite sound. (2002: 3). For example, Raybould (undated) considers PS21 a product of innovation of Singapore. Another example is the eCitizen Portal which helped Singapore win the Stockholm Challenge award in 2002 for excellence in using ICT to benefit the community.