Number of Multinational Companies On the Rise in Singapore
More multi-national companies are heading to Singapore for its favorable business environment and business-friendly tax scheme. Based on a study released by real estate conglomerate CB Richard Ellis (CBRE), Singapore is the second global business destination in Asia for multi-national companies that are planning to expand abroad with 189 international companies operating on the island, only lagging behind Hong Kong by a narrow percentage. The study also showed the shift in economic perspective of western global companies since more of them prefer to “go east” much like their manpower (mostly newly graduates), instead of entering neighboring financial hubs London and New York.
Singapore’s open economy and conducive business environment, which allows foreign business entities to have 100% ownership of their company, has certainly beefed up the number of multi-national companies in the island. Aside from a low headline corporate tax rate pegged at 17%, Singapore offers industry-specific tax exemptions and incentives for companies. Singapore has also entered over 50 tax treaties with countries to eliminate a foreign company’s risk of double taxation.
Foreign companies can choose from three types of arrangement if they wish to establish an office in Singapore. These arrangements include representative offices (a non-revenue earning setup limited to a three-year operation), branch offices (a profiting setup where foreign companies are treated as non-resident business entities), and subsidiary company (a profiting setup wherein the company
Singapore is a sought-after destination for global companies in the manufacturing and services sector. In fact, 69% of 323 global luxury retailers find Singapore among their top 10 destinations list in a similar study conducted by the real estate leader. Singapore is also included in the top-five location for financial and accounting as well as media industries.
CBRE’s surveyed over 280 companies in 232 cities across the globe for the study. The report also named Shanghai, Beijing and Tokyo, Japan as top 10 premiere destinations for foreign companies.