Dyson Move Highlights Singapore's Advantages in Risky World
(Bloomberg) -- James Dyson’s shock decision to move his company’s headquarters to tiny financial powerhouse Singapore is turning heads in the business world.
In a risk-laden global economy, Singapore’s advantages are beginning to stand out. Dyson Ltd. wasn’t the first to cite business-friendly factors for its decision, even beyond the city state’s low political risk and favorable taxes. Consistent high scores on rankings for skills, innovation and competitiveness, continue to make the nation a drawcard for businesses.
Here’s a look at what the island nation has going for itself:
Tax Rates & Policy
Singapore has one of the most business-friendly tax regimes in the world: rates for corporate tax, at 17 percent, and personal income, at 22 percent, each beat regional averages around the world, according to data compiled by tax and financial advisory firm KPMG LLP.
Authorities are slowly ramping up taxes to deal with long-term spending strains around an aging population, but even so, it expects to remain globally competitive.
Last year, Finance Minister Heng Swee Keat announced plans for a future boost to the goods-and-services levy, as well as immediate increases in property duties and a fresh carbon tax. At the same time, the government offered an extension of the corporate income tax rebate and more support for research and development projects.
As a member of the 11-country Pacific trade pact that came into force at the turn of this year, Singapore has preferential trade access to countries like Japan, Canada and Mexico.
Singapore had 22 effective free trade agreements in 2017, according to data from the Asian Development Bank, and is among the few in the region to have FTAs with both the U.S. and China.
Elections loom as early as this year, though the poll is less likely to grab the attention of investors as with other regional general elections. The ruling People’s Action Party, which has held power since independence in 1965, is preparing for the change in leadership.
Singapore’s country-risk and business climate scores remain in the least threatening category, according to analysis by trade credit insurer Coface SA.
Singapore consistently ranks among the top in the World Bank’s Ease of Doing Business Index. It scored best spot for “enforcing contracts” and No. 3 for “starting a business.”
Singapore also retained a top-10 distinction in the 2019 Bloomberg Innovation Index, which analyzes dozens of criteria using seven metrics, including research and development spending, manufacturing capability and concentration of high-tech public companies.
Singapore isn’t immune to global threats: as one of the most export-reliant economies in the world, it’s especially hurt by U.S.-China trade tensions and a cyclical slowdown in the world economy. It’s also challenged by an aging population, a shortage of talent, is one of the most expensive cities in the world, and retains arcane laws towards gay people.
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