singapore final report vinay...im

8/6/2019 Singapore Final Report Vinay...Im

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SINGAPORE

BUSINESS PARADISE.


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INTRODUCTION:

Today, recession period has given market a down turn so many

companies are in search of potential customers which arises a need for

the parent company to expand his business in different countries. A

ninvestor must consider all the aspects whether economic or cultural,

before investing into any country. These could be the government,

economy, infrastructure, workforce and so on. This is where

Singapore comes into picture holding number 1 position in a research

done by IFC (International Finance Corporation) and World Bank

stating ease of doing a business 2009. Singapore's FDI stock has more

than tripled in the time period from 1995 to 2006.

Quick facts:

(Source: (http://www.canadiancontent.net/profiles/Singapore.html)

Singapore- Population: 4,608,167 Official name Republic of Singapore Official Languages English, Mandarin, Malay, Tamil Currency Singapore dollar (SGD) Capital city Singapore city Government type: parliamentary republic.


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Location: South-eastern Asia, islands between Malaysia andIndonesia

Ethnic Make-up:

C

hinese 76.7%, Malay 14%, Indian 7.9%, other1.4%

Religions: Buddhist (Chinese), Muslim (Malays), Christian,Hindu, Sikh, Taoist, Confucianist.

Calling Code:+65 Cell Phones: 3,521,800 Landlines:1,896,100 Internet: 2,310,000


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Culture ofSingapore

Singapore is a multi racial and multi cultural cosmopolitan city. .

Since Singapore is a multi-culture society you need to bear some of

the following points in mind:

- The Chinese always use their family names first followed by their

personal names.

- Women often keep their own family name. Malays do not use a

Family name.

- They use their personal name followed by bin (son of) or binti

(daughter of) and their father's personal name.

- Indians use their personal name followed by S/O(son of) or D/O

(daughter of) and their fathers' personal name.

As a rule of thumb never use personal names or nick names unless

and until invited to do so or until a strong friendship has been

established. While meeting your Singaporean contacts the higher

ranked and elder's members should be addressed first .

Singaporeans are group dependent and rely on facial expression, tone

of voice and posture to tell them what someone feels. They often trust

non-verbal messages more than the spoken word. They hint at a point

rather than making a direct statement, since that might cause the other


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person to lose face.Silence is an important element of Singaporean

communication. Pausing before responding to a question indicates

that they have given the question appropriate thought and considered

their response carefully.

Singaporeans generally shake their hands when they are first

introduced to a person. Men and women usually greet each other with

a handshake.When making introductions for the first time and in

formal meetings you should always use the person's title and family or

personal name.Though Singapore is a multilingual city. The

Singaporean Government uses Mandarin Chinese, and English is used

is widely in use for business purposes.


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Business Meeting & Negotiation Etiquettes

In this part we would like to illustrate some important information

while doing a business with a Singaporean like, You should not get

offended if a Singaporean does not look into your eyes in a meeting.

The eyes are cast down or away as a sign of respect and politeness

especially if you are a senior or have a higher status. Business in

Singapore is more formal than in many western countries. There are

strict rules of protocol that must be observed.The group (company or

department) is viewed as more important than the individual.

In order to keep others from losing face, much communication will

be non-verbal and you must closely watch the facial expressions and

body language of people you work with.

1. Elderly people are treated with great respect in Singapore.

2. Compliments are generally accepted with a modest denial.

3. Public display of too much affection is not appreciated.

4. Appointments are necessary and should be made at least 2 weeks in

advance, whenever possible.


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The most formal way to schedule a meeting is to write to the person

concerned, although most Singaporeans will schedule an appointment

by telephone, fax, or e-mail.Do not try to schedule meetings during

Chinese New Year (late January/early February), since many

businesses close for the entire week.

Presentations should be accompanied by backup material, including

charts and figures.Never disagree or criticize someone who is senior

to you in rank as it will cause both of you to lose face and may

destroy the business relationship.

Punctuality is a virtue. You should be always punctual to the businessmeetings.

Always send a list of people who will be attending the negotiations

and their title well in advance. Singaporeans give a respectful pause

of up to 15 seconds before answering a question. Does not start

speaking too quickly or you will miss the answer?

Be prepared with a mental list of concessions you would be willing to

make that would not injure your own business Singaporeans are tough

negotiators on price and deadlines and also Avoid losing your temper

or you will lose face and damage your relationship.If you are signing

a contract with ethnic Chinese, the signing date may be determined by

an astrologer or a geomancer (feng shui man).

(http://www.discoverabroad.com/singapore/LivingAbroad/Lifeand

Culture/Etiquette.htm)


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Taxation

Single-Tier Tax System: Since January 1, 2003, Singapore has

adopted a single-tier corporate income tax system, which means

there is no double-taxation for stakeholders.

There are basically three types of major taxes in Singapore:

1.Corporate income tax2.Individual tax3.Property tax

Corporate tax rate: Singapore's headline corporate tax rate is a flat

18% at present. However, effective 2010, corporate income tax rate

will be further reduced from 18% to 17%. In order to make Singapore

as an attractive investment destination, income tax rates in

Singapore have been going down consistently as seen below.

1997-00 2001 2002 2003-04 2005-06 2007-09 2010

26% 25.5% 24.5% 22% 20% 18% 17%


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General Tax Incentives are as follows,

Effective Corporate Tax Rate:

A typical Singapore resident company with S$400,000 annual taxable

income will be taxed as below:

First Three Years ofIncome Tax Filings:

Taxable Income (S$) Tax Rate

0 - 100,000 0%

100,001 - 300,000 9%

300,000 - 400,000 18%

After First Three Years ofIncome Tax Filings

Taxable Income (S$) Tax Rate

0 - 300,000 9%

300,000 - 400,000 18%


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Individual income tax: Personal income tax rates in Singapore are

one of the lowest in the world. Singapore follows a progressive tax

rate starting at 0% and ending at 20% above S$320,000.

There are no Capital gains or inheritance tax.

(http://www.guidemesingapore.com/corporate-taxation/c323-

singapore-corporate-tax-incentives-exemptions.htm)

Property Tax:

Property tax is levied on the registered owner of a property and is

payable to the government.

The tax rate for industrial and commercial properties is 10%.

Owner-occupied residential properties are taxed at a concessionary

rate of4%.Property tax exemption for land under development may

be granted in certain cases.

(http://singapore.angloinfo.com/countries/singapore/proptax.asp)


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Tax Incentives

There is 0% tax on S$100K taxable income. The corporate tax rate is 0% on the first S$100,000 taxable

income for each of the first three tax filing years for a newly

incorporated company that meets the following conditions:

1.The company should be incorporated in Singapore2.The company should be tax resident in Singapore

3. The company should have no more than 20 shareholders of

which at least one is an individual shareholder holding at least

10% of shares.

Tax Treaties

The Main benefit of tax treaties is to help businesses avoid double

taxation of their income. Singapore has concluded tax treaties with

more 50 countries and the list continues to grow.

(http://www.guidemesingapore.com/corporate-taxation/c323-

singapore-corporate-tax-incentives-exemptions.htm)


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Singapore Goods and Services Tax (GST)

Goods and Services Tax (GST) is similar to Valued Added Tax (VAT) in

other countries and is a relatively new form of tax in Singapore. The

current rate ofGST is 7%.

GST registration is mandatory for business entities with an annual

turnover of more than S$1 million.

(http://www.guidemesingapore.com/business/c668-singapore-

goods-and-services-tax-gst.htm)

Benefits ofGST:

To the government

1. It is an efficient tax due to the comparatively lower cost of

administration and collection.

2. It allows the Government to lower corporate and personal income

taxes, which in turn encourages more foreign direct investment. This

leads to overall economic growth.


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To businesses and individuals

1. GST taxes apply only on consumption. Savings and investment are

not taxed

2. Cost of doing business is reduced, thereby contributing to lower

prices. Businesses do not suffer a tax cost due to the multi-stage

credit mechanism since the real taxpayer is the end-user.

Drawbacks:

1. Being GST registered effectively increases your selling price by 7%.

Your customers who are not GST registered would not be able to

recover the GST you charge. So although your costs are reduced

because you can recover GST, your customers might not be too

pleased.

2. GST can be a burden to lower income groups, especially during

times of high inflation when the 7% tax is paid on the increasing price

of daily essentials.


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What goods and services are subject to GST?

GST is charged on taxable supplies. A taxable supply, is a supply of

goods or services made in Singapore, other than an exempt supply.

GST is not chargeable on exempt supplies, of which there are two

categories - sale and lease of residential land; and financial services.

(http://www.guidemesingapore.com/business/c668-singapore-

goods-and-services-tax-gst.htm)


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Settingupa businessin Singapore

Singapore offers you 4 PS which are critical for any business success

following are the 4 PS which are as follows

1) People

2) Price

3) Policy

4) Place

PeopleSingapore is a multi-racial and multi-cultural cosmopolitan city

Singapore is blessed with world class labour force in the world. Singapore has a population where more than one out of four

persons is a foreigner

Price Singapore is the worlds most cost-competitive place for

business Singapore has very low corporate and personal tax rates. Office rental in Singapore is relatively low Singapore offers skilled labour at competitive wages The costs of living in Singapore is also comparable low to other

major cities in the world

Place Singapore has a world class transportation & logistics

infrastructure

It is well connected to Asia and almost every major city in theworld.

Singapore is well-connected to the world through internet


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Policy Singapore is becoming an easy place to do business due to its

pro-business policies.

Singapore have good Consistency in Application of Local Laws Singapore have financially sound banking system

In Singapore, businesses mainly operate as companies, sole

proprietorships and partnerships. Each of these is subject to different

regulatory and tax regimes reflecting their organization and

ownership:

y Company. The most common form of incorporation inSingapore is a Private Limited Company. Also known as "Pte

Ltd" company, a private limited company is the most flexible

and advanced type of business form in Singapore. A Pte Ltd

company protects its owners' personal assets from business

liabilities of the company as well as enjoys special tax benefitsin Singapore.

y Sole Proprietorship. Meant for an individual owner with a smallbusiness that does not have any business risks. A sole

proprietorship is an unincorporated type of business form and

not a separate legal entity. It does not protect the owner's

personal assets from business liabilities and therefore wenormally do not recommend this type of entity to

entrepreneurs.


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y Partnership. The most common form of a partnership isLimited Liability Partnership (LLP). A LLP may be suitable for

accountants, lawyers, architects, etc.

y Foreign Company Office. Foreign companies interested insetting up an office in Singapore can register a branch office,subsidiary, or a representative office.

All business companies should with be register with acra

To setup foreign business in singapore

For a foreign entrepreneur who wishes to setup the foreign business

in Singapore can open representative office (RO) which can explore

the market for the investor before incorporating the company

A RO can conduct market research and liaison work for the

parent company but CANNOT:

Engage in any trading or business activities, whether carried outdirectly or on behalf of its parent company

Lease warehousing facilities

Lease its office to other establishments for a fee

Enter into business contracts

Issue invoice/receipt

Open/receive letters of credit

Sign contract on behalf of its parent company

Provide service for a fee.


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Business Visas and Passes:

Singapore government offers easy visas procedures to foreign

entrepreneurs who wish to do business in Singapore business visas

and passes issued by the Singapore government are as follows

Entre Pass The Entre Pass is required for foreigners who wish to start a

new business in Singapore.

The Entre Pass allows registered entrepreneurs and theirfamilies to live in Singapore. You may leave and re-enter

Singapore any time and it is renewable for as long as the

business remains viable.

Multiple Journey Visa

The Multiple Journey Visa is ideal for business executives whotravel in and out of Singapore frequently either to attend to

business matters and investments or to look for business

opportunities in Singapore.

The visa is valid for 1, 2 or 5 years.Passes For Foreign Employees

If your branch office, representative office or newly establishedbusiness intends to hire employees from your home country,

you will need to apply for Employment Passes and Work

Permits.


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Current Scenario ofSingapore GDP:

In a further indication of the weakening Asian economy, Singapore

GDP had declined by 12.5 percent in real terms in the fourth quarter

of 2008 and revised downwards its growth estimates for 2009.

Blaming the global economic crisis, Singapore's Ministry of Trade

and Industry (MTI) warned that the island state's economy would

grow no more than 1 percent and could shrink by up to 2 percent in

2009. In November it predicted growth of -1 percent to 2 percent.

In 2008, Singapore's economy grew by an estimated 1.5 percent,

falling short of forecasts of 2.5 percent and well down on 2007's 7.7

percent growth.

The ministry said manufacturing would be weighed down by falling

demand in developed economies and predicted a sharp slowdown in

financial services caused by weak financial markets and credit

growth.

All sectors of Singapore's economy dependent on the movement of

goods and services in the region would be affected it said.


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INFLATION

Singapore inflation cools from a 26-year peak as food and transport

costs eased, giving the central bank more room to loosen monetary

policy as the economy slows.

Annual inflation stood at 6.4 percent in August, slightly higher than

an expected 6.2 percent, but down from a 26-year high of 7.5

percent earlier in the year.

Given that inflation has probably peaked, some economists said the

central bank might ease monetary policy later this year by letting the

Singapore dollar rise at a slower pace. But they said the decision

would be tricky because it is unclear how much the global economy

would slow on the back of the financial crisis.

Recession time?: Singapores central bank, the Monetary Authority

of Singapore, sets policy by managing the Singapore dollar in a secret

trading band against a basket of currencies, not by setting interest

rates.

Singapores Trade Minister Lim Hang Kiang was on Tuesday quoted

as saying the economy may grow slower than the governments 4-5

percent forecast this year as the global credit crisis hurts demand for

exports.


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David Cohen, an economist at Action Economics, said the outlook

was clouded by uncertainty because of the mayhem in the financial

world.

singapore final report vinay...im

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