Singapore makes every effort to position itself as one of the best places to start or expand a business and it has definitely caught the attention of start-ups in the United Kingdom. In a survey conducted by the IMDA, more than half of the UK start-ups surveyed were attracted by Singapore’s Smart Nation vision, and it was not just about the money — they were excited about looking beyond just expanding the business, into joining a major project that can benefit other world cities through innovation.
In addition to the Smart Nation vision, here, we look at the 5 reasons why UK startups see Singapore as the preferred location for their start-up operations.
Ease of Doing Business
In order for a start-up to thrive, it has to be provided with the right conditions. The ease with which business can be conducted depends on numerous factors and varies from country to country. According to the World Bank’s latest Doing Business Report, Singapore has been ranked number two in the world for ‘Ease of Doing Business’. In comparison, the United Kingdom has been ranked 7th. Singapore scored high points in areas that are important for entrepreneurs and start-ups; namely access to capital and credit, as well as how effectively insolvencies are resolved.
Better Infrastructure and Lower Corruption
Start-up companies need all the help they can get in order to achieve their maximum potential. Even the most dogged of entrepreneurs cannot operate in an environment that is hostile towards business growth. In the latest Global Competitiveness Report released by the World Economic Forum, Singapore ranked 2nd out of 138 countries while the UK came in at 7th place.
A breakdown of the report shows that while the United Kingdom has enjoyed highly efficient goods and labor markets, highly sophisticated business processes and a high level of digital readiness by both businesses and consumers so far, Brexit will likely have a negative impact on its competitiveness. The three pillars which will be most affected are the UK’s competitiveness through goods and financial markets, market size and potentially, innovation.
As a result, a country like Singapore that does so well in these rankings seems very appealing to budding entrepreneurs.
Singapore’s corporate tax rates under the full start-up tax exemption (SUTE) scheme
Corporate Tax Rates
Singapore has one of the most attractive corporate tax rates in the world. At 17%, it stands lower than the UK’s corporate tax rate of 20%. On top of this, Singapore offers start-up tax exemptions (SUTE) for newly-formed companies.
The attractive corporate tax rate has often been one of the prime factors why businesses choose Singapore as their hub for South and South-East Asia. It is only natural then that even start-ups would want to benefit from this. Singapore has a comprehensive Avoidance of Double Taxation Agreement (DTA) in place with the United Kingdom, which insures that British entrepreneurs are not penalized for establishing their start-ups in Singapore.
Availability of Skilled Workforce
According to an article on Forbes, “8 Reasons Startups with Good Ideas Fail”, not having the right team is one of the key reasons why a start-up with a good idea can fail. The level of talent available in the country is directly proportional to how skilled the employees of a start-up company can be. In this regard, Singapore certainly has beat the United Kingdom. She ranked #1 in Talent according to the Global Startup Ecosystem Report and Ranking 2017 by Startup Genome, surpassing even Silicon Valley. In comparison, London came in at 10th position.
In addition, INSEAD has ranked Singapore 2nd on their Global Talent Competitiveness Index as compared to the United Kingdom’s 3rd place ranking.
Better Access to Emerging Economies
One factor that works in Singapore’s advantage is its location. Any start-up based in Singapore places itself right at the doorstep of multiple emerging economies in South-East Asia, including Indonesia and Thailand. Singapore is very well-linked with the rest of the world thanks to its excellent infrastructure. For many start-ups, expanding to international markets in the early stages is crucial and Singapore provides a much better platform.
As long as the current performance gap between the United Kingdom and Singapore exists, it is very likely that more UK startups will continue heading to Singapore to set up shop.
Ready to start a company in Singapore?
We’ve got it all covered. With AsiaBiz, you get a dedicated one-stop solution for your company incorporation, immigration, offshore setup, accounting, taxation, and corporate compliance needs.
