Why Technology Companies are Investing in Singapore
According to a report by Singapore’s Economic Development Board (EDB), 80% of the world’s top 100 tech firms have a regional headquarter in Singapore. Even tech giants such as Google, Amazon and Facebook have set up their regional hubs here. We explore why are tech companies deciding to set-up and invest in Singapore
Free trade agreements (FTAs)
According to the Ministry of Trade and Industry Singapore (MTI), Singapore has signed over 23 bilateral and regional free trade agreements worldwide to help facilitate trade and investments. This allows both Singapore-based companies and investors to enjoy tariff concessions, gain preferential access to key sectors and enable faster entry into new and emerging markets.
Enhanced intellectual property protection is perhaps one of the more attractive attributes for tech investors as intellectual property breaches can be one of the biggest challenges which tech companies can face when moving overseas. With this in place, tech companies can set up regional HQs in Singapore for R&D purposes with a peace of mind.
More information on Singapore FTAs can be found in the MTI booklet here.
Singapore’s Strategic Location
Singapore’s strategic geographical location has allowed it to transform from a fishing village into the hub of Southeast Asia. By only being in a six-hour flight time radius from any other Southeast Asian country, Singapore is perfectly positioned as an ideal hub to access other cost-effective manufacturing countries.
Access to a dynamic and skilled workforce
Singapore has one of the highest number of university graduates and literacy rates at 97.5%.
Singapore is also a hot location for foreign experienced talent coming to work in Singapore with numerous work passes, visa and work permit schemes available. By setting up an office in Singapore, tech firms may be able to access talent globally without being geographically limited.
Business friendly corporate tax rate
Singapore has a corporate tax rate of 17% which is one of the lowest in the world.
In addition, new companies which are setting may also be eligible for tax incentives for the first three consecutive years, a 75% exemption on the first $100,000 of their normal chargeable income and also a further 50% tax exemption on taxable income of up to S$100,000
More information on corporate tax and incentive criteria could be found in our article here
Amidst global economic headwinds, Singapore remains one of the world’s strongest economies. Anchored in political stability, low corruption rates and transparent public institutions, Singapore is a trusted partner for businesses.
Sound monetary and fiscal policies, together with a robust judicial system, underpin our low-risk economy.
Singapore government funding for businesses
The Singapore government offers a series of grants for qualifying businesses to help develop key sectors which need help.
Some examples of this grants are:
- Productivity Solutions Grant (PSG)
- Enterprise Development Grant (EDG) and Double Tax Deduction for Internationalisation (DTDi)
The DTDi is especially relevant for tech firms who wish to expand to neighbouring countries and require support for market research, feasibility studies and trade fairs.
More information on government grants can be found on our page here.
Recently, with the COVID-19 virus impacting the international economy, the Singapore government has released a series of financial aid as part of the 2020 budget to help businesses and employees cope.
More information on the support available from the Singapore government can be found on our article about the Singapore budget 2020.