If you are a trader, I am pretty sure 2019 may not seem to be like a good year for you. With the ongoing trade war between the US and China as well as the Brexit crisis ensuing, I would be nervous if I were you.
As the West continues trying to put out its own fires, many companies have been looking to Asia for new opportunities (vacuum company Dyson recently announced its HQ relocation to Singapore in light of Brexit crisis).
If our previous article, 6 reasons why you should set up base in Singapore, wasn’t enough to win you over, here’re 4 more reasons why you should set up your trading company here.
Whatever you are importing or exporting, there is a pretty good chance Singapore is where it’s at.
Being in the middle of the Straits of Malacca, one of the world’s most important trading routes connecting the Pacific and Indian Oceans, Singapore has capitalised on this and become the port-of-call for many trading companies.
Singapore is the global trading centre for 7 crucial clusters: machinery and equipment, household goods, agriculture materials, energy and chemicals, transport equipment, general merchandise, others (metals and minerals, construction materials).
And the numbers prove it; for years, Singapore has consistently ranked the highest in the world for its Trade to GDP ratio. Trade to GDP ratio is calculated by dividing the total trade of a country by the total GDP and reflects one’s degree of openness and measurement of globalisation.
As a trading company, you’ll want to be based in a location which is strategic and stable. To borrow the words of Sir James Dyson when announcing the relocation of Dyson’s HQ to Singapore, Singapore allows for companies to become “future-proof”.
Good location means nothing if you don’t know how to capitalise on its potential.
To the Singapore government, this means digitalising everything to make trading efficient and seamless.
The NTP is a one-stop trade information platform allowing digital data exchange between businesses involved in trade and logistics.
Simply put, by sharing digital documents and integrated B2B and Business-to-Government processes, enterprises can connect seamlessly to business partners and regulatory authorities through the NTP.
The Cross Border Cognitive Supply chain solution is a digital trade platform developed by IBM (International Business Machines) and Global eTrade Services (GeTs).
By connecting 350,000 trading partners on IBM’s Supply Chain Business Network to 18 global Custom nodes, this automates customs declaration and thus more efficient cross-border transaction of goods.
3. Strong Infrastructure support
Being efficient is impossible without strong infrastructure support as a foundation. Lucky for you, Singapore has this one covered too.
Financial infrastructure in place include:
Letter of Credit (LC): it is a major payment method that allows international trade to proceed without a hitch. Buyers don’t have to pay until documents are received while sellers are guaranteed payment if they complied with the terms dictated in the LC. This promotes trust and reduces risks for commercial and foreign exchange.
Global Trader Program (GTP): For well-established international trading companies intending to expand their operations in Singapore, corporate tax rates on qualifying trading income are reduced by 5 to 10% for three or five years under the GTP.
Not to mention, Singapore also has a network of over 70 comprehensive Avoidance of Double Taxation agreements to prevent double taxation of incomes earned in one country by a foreign resident.
Physical infrastructure in place include:
State of the Art facilities: In 2017, Singapore was ranked Asia’s best seaport and is accompanied by the world’s largest bunkering port. Fun fact: we also store the highest concentration of oil in Asia.
Free Trade Agreements (FTAs): Together with 32 trading partners, Singapore has 21 implemented FTAs. Simply put, FTAs allow for freer flow of goods by giving partnered economies preferred access to each other’s markets. They also allow for increased export quotas. Such exclusivity gives exporters from Singapore a greater advantage as compared to competitors from other countries without as many agreements in place.
4. Potential is endless here
Wait, there’s still more. The government doesn’t just want you to set up your company here and let you fend yourself alone.
Taking on a long-term perspective, the government is committed to helping you grow your business. Training programs for entry-level graduates as well as mid-career professionals are in place to boost their knowledge and capabilities regarding international trade.
In Singapore, you can expect to have top-notch human capital helping you bring your company to the next level.
We know this may sound too good to be true, but it is reality and many other companies are moving to Singapore to make it their reality too. Want to make it yours too? Get started with your immigration paperwork today by reaching out to us!
Reach out to us for a complimentary 10 minute consultation if you want to increase your chances of approval for PR today!
Co-written by Wong Jiayi & Sulochana Uthirapathi