Singapore is recognised as a key player in the growing economy of the Southeast Asian region. The country is also known as the second-most connected globally, thus increasing the number of investors attracted to it.
Reasons for Singapore’s Strong Economy
Singapore has a highly developed infrastructure, including transportation, telecommunications, and energy supply, contributing to its economic growth. There is also a high level of education and skill development in the country, drawing foreign investors and companies looking for skilled workers.
Singapore’s geographical position also makes it an ideal place for trade between different parts of Asia. In addition, its thriving business connections were due to the years of policymaking that both benefit local and international businesses.
Here are some of the policies:
Singapore’s FTA network
Singapore has 26 free trade agreements (FTA) globally. This allows Singaporeans to enjoy the benefits of cheap goods and services without worrying about customs, tariffs and other barriers.
The FTA network also contributes to Singapore’s economic growth by raising productivity and reducing costs for businesses. It also helps Singapore compete internationally by giving it access to otherwise inaccessible markets due to geographical or cultural reasons.
There are many benefits to being a member of the ASEAN (Association of Southeast Asian Nations), and one is the trading economy.
ASEAN is the largest and most dynamic economic community in the world. It is a trading bloc consisting of countries with a combined population of over 600 million people.
ASEAN is an ideal destination for businesses looking to enter the region’s growing market. With its strong economy, ASEAN offers opportunities for trade, investment, and tourism unmatched by other regions of Asia.
The benefits of becoming a member of ASEAN include:
- Lower cost for importing goods and services
- Easy access to labour markets
- Free movement of capital and goods within the region
- Protection from import duties
Import GST suspension
GST Suspension schemes allow qualified businesses to import and store goods without paying Good and Services Tax.
This strategy positions Singapore as a regional hub for the distribution of goods from West to East. Here are two examples of these schemes:
- Zero-GST Warehouse Scheme – allows approved businesses to store imported non-dutiable goods in a licensed premise by Singapore Customs.
- Approved 3rd Party Logistics Company Scheme (A3PL) – for businesses that offer logistics management services to overseas clients who use Singapore as a logistics hub.
Here are additional benefits of GST Suspension policies:
- Cost savings
- Revenue enhancement
- Growth opportunities
- Quality improvement
- Business continuity
Established Agreements on Digital Trade
Singapore always keeps up with the latest technology and trends. With that in mind, it’s no surprise that digital agreements have become increasingly prioritised in Singapore. Many arrangements like the Digital Economy Agreements and the APEC Cross Border Privacy Rules are helpful. For example, they can be used to ensure that a company is protected from data breaches or that it has access to the most up-to-date information.
Moreover, established agreements on digital trade provide a framework for the parties to work together transparently and openly.
Efficient and Trusted Customs
Customs is an essential part of supply chain management because they help reduce costs and errors in importing goods. There are many steps involved in customs procedures. These steps include paperwork, documentation, inspections, and payment of applicable taxes.
Singapore’s goal is to ensure that customs procedures are efficient and trusted.
Low taxation rates helped Singapore maintain its position as one of the world’s most competitive economies. At the same time, it keeps an environment that supports business growth.
Its robust business connections with countries worldwide and its global trade and finance hub make it a great place to do business.
If you start a business in Singapore, you should check on these policies by contacting a trusted company incorporation service.