Singapore, the top choice of American billionaires

Hedge fund founder Jim Rogers and Facebook billionaire Eduardo Saverin call Singapore home. Now, with higher taxes following the aversion of the Fiscal Cliff, more wealthy Americans will find relocating themselves to Singapore an attractive proposition. Instead of 39.6% of income tax for annual earnings above US$400,000, the highest possible income tax rate in Singapore is 20% for earnings over S$320,000 (US$261,000) a year. Corporate tax in Singapore is also lower at a flat rate of 17%.  Moreover, in contrast to the capital gains tax of 20% in the United States, capital gains tax does not exist in Singapore. This means individuals and businesses in Singapore can keep every cent they have made from investments and dividends.

But more than the attractive taxes, Singapore possess many qualities that make it a smart choice to relocate your business.

According to Jim Rogers: “If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia… Singapore 40 years ago was a swamp with a half a million people. Singapore now, 40 years later, is the country with the largest foreign currency reserve per capita of any country in the world…. It’s got the best education in the world, the best health care in the world. It’s astonishing to come to Singapore and see that everything works….Singapore is going to be the financial center of Southeast Asia, probably Asia, and likely one of the top financial centers of the world.”

Eduardo Saverin also likes Singapore, but for different reasons. Explaining his 2009 move to Singapore, he told a local newspaper: “I got out of Changi Airport and was amazed by the line of trees and saw how clean and green Singapore was. Then I discovered the various entrepreneur programmes and the long list of government funding available for start-ups. I decided I must live here.”

If you are considering following Jim Rogers and Eduardo Saverin in relocating in Singapore, here is more information to help you make an informed choice:

Why relocate and set up a business in Singapore?

One of the lowest taxes in Asia

Taxes in Singapore are not only lower than the US, they are also one of the lowest in Asia. This is despite Singapore being one of the most developed countries in Asia. You could well end up with not only a higher after-tax income in Singapore, but also a higher standard of living as compared to some countries.

Ease of doing business

Another reason why Singapore is a top destination is the ease of doing business. Its enterprise-friendly government encourages economic growth by implementing pro-business policies. For instance, incorporating in Singapore only takes a day. More than the lack of red tape, Singapore is one of the least corrupt countries in the world, with no hidden costs for doing business. In addition, as mentioned by Eduardo Saverin above, the Singapore offers plenty of assistance and funding for start-ups. It is no wonder the World Bank cited Singapore as the world’s easiest place to do business in its “Doing Business 2011” report. This is on top of the world’s second most competitive country accolade accorded by the World Economic Forum Global Competitiveness Report 2011 – 2012.

Rich market Opportunities

Singapore has a Free Trade Agreement with the United States, which is helpful if you want to continue to sell to your home market. Many opportunities in trading are further available, given that Singapore is a major trading hub that imports and exports all kinds of products from consumer goods to high technology and industrial goods for re-export to third countries. In addition, the Singapore government and private industry are expected to invest in several major projects over the next few years, including:

  • $600 million to carry out 20 drainage improvement projects over five years to achieve a higher level of flood protection;
  • Construction of US$1 billion LNG terminal that will start operations in mid 2013;
  • Construction of a US$530 million underground oil storage facility;
  • Construction of several public hospitals and medical centers scheduled to be ready by 2014, 2015 and 2018;
  • Private medical groups will spend more than $270 million to build, expand and upgrade their healthcare facilities;
  • Construction of new Mass Rapid Transit rail lines costing over US$30 billion that will increase Singapore’s subway network to 278km in 2020

Highly skilled labour

As one of Singapore’s largest export country is the United States, it produces many high tech products for consumption in America. This includes products in a range of industries – electronics, oil and gas equipment, aircraft and parts, pollution control equipment, medical devices, laboratory and scientific instruments, computer hardware and software, telecommunication equipment etc. If you want to continue to sell to the US market, Singapore possesses the expertise you need to produce it. And this is at a lower labour cost as compared to back home.

Eduardo Saverin is one person leveraging on this advantage. Among his investments in Singapore is Anideo, a technology start-up that creates iPhone and iPad applications. Last year, he also invested in Perx, a customer loyalty mobile app which has signed up big brands such as Popeyes and Dunkin Donuts. Singapore is a good base for him to operate out of because there is a good supply of programmers he can hire to develop what he needs.

Strong Intellectual Property protection

Protecting your high tech or knowledge based business is easy in Singapore. The World Economic Forum Global Competitiveness Report 2011 – 2012 ranks Singapore as the country having the best protection of intellectual property. The country is a member of all the top international IP treaties, and businesses can file for global trademark registration from here. This is unlike some countries in Asia, where Intellectual Property rights are neither recognised nor enforced.

What you may not like about Singapore:

When many people think of Singapore, they think of the stringent laws in the country. Chewing gum is banned here (except for medical reasons) and drug offences in the country receive heavy punishment. However, this also means that Singapore is a really clean and safe place to live in, with extremely low crime rates. You can walk around most parts of Singapore at 2am and still feel safe. Needless to say, you will also have no worries about your children getting mixed up in the wrong activities at school.

Unlike the US, the Singapore media is tightly controlled by the government. You may feel there is a lack of freedom of expression compared to your home country. In addition, consensus-building is emphasized in Singapore and you need to “give face” when you network. To thrive here, you need to think before you speak.

In addition, as Singapore is a small country, property prices here are higher, with condominium units costing more than an average home in the US. You may also miss nature and open spaces, given the highly built up city life in Singapore. However, Singapore is well connected by air and it is very fast, easy and cheap to travel to the mountains, beaches and lakes in the region. Stunning hotspots like Bali, Phuket and Kota Kinabalu can be covered over a long weekend here, making your stay in Asia a truly memorable one.

To conclude, like any other country, Singapore requires some adjustment if you relocate here. But with its low taxes, good market opportunities and ease of doing business, Singapore is an ideal place to take your business to.

Jim Rogers and Eduardo Saverin like it here. You could well feel the same about the country too.

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