photo: mas.gov.sg

Singapore next in line as best financial center, states report by PwC

Singapore rises to the second spot on the PwC index, overtaking New York. That brings Singapore to next in line of the first position if London loses its status as leading business center in the world, Bloomberg reported.

Earlier this year in April, Straits Times reported that a Global Index placed Singapore behind London and New York and two points ahead of Hong Kong, while Tokyo was fifth, as a financial center.

PricewaterhouseCoopers LLP (PwC) said in a new study, based on social and economic data, Singapore ranks behind London as the best global city.

The study was published before U.K. voted to leave the European Union in its Brexit referendum on 23 June this year.

The Cities of Opportunity Index places Singapore ahead of Paris and Amsterdam; the two European cities are seeking to attract foreign businesses if they decide to shift jobs out of London.

london-singnext 1

PwC stated that superior technology, low taxes and efficient transport and infrastructure systems helped Singapore to overtake New York and move one notch higher in the rankings since the previous study in 2014.

The PwC index evaluation for the financial hubs cities also based on their social and economic health, not only their competitiveness. It measures indicators such as the ease of doing business, demographics and technology readiness.

The results show Singapore’s impact in growing business, which was partly driven by an expanding financial and insurance industry, which makes up about 13 percent of the economy.

graph: Bloomberg
graph: Bloomberg

Singapore’s main Asian rival, Hong Kong dropped one spot in the overall index to ninth, partly due to a decline in the category measuring intellectual capital and innovation.

Compared to Hong Kong, Singapore leads in ease of doing business, infrastructure, health, safety and security.

And few cities beat Singapore on taxes. The corporate tax rate of 17 percent is more attractive than higher than 30 percent in France, 35 percent in the US and the average of 22.8 percent for the 35-member Organisation for Economic Co-operation and Development.

“An analysis of corporate total tax rate, personal rate, and tax efficiency shows that Singapore, along with Dubai and Hong Kong, has the lowest rates and highest efficiency collectively,” PwC said.

graph: Bloomberg
graph: Bloomberg

However, due to tightening rules for foreign workers, companies might have a harder time settling down in Singapore.

Mr Ravi Menon, head of Singapore’s central bank, said on Tuesday that businesses set up operations in Hong Kong and Singapore to tap Asian markets, and Brexit will not diminish London’s appeal as a financial hub.

He said, “London will remain a major financial center.”