Based on a report by TMF Group, a provider of international administrative services, Singapore is ranked the sixth easiest place to do business in Asia.
The Global Business Complexity Index, which compares key administrative and compliance demands across 76 jurisdictions worldwide, found only Thailand, South Korea, Japan, Hong Kong and Taiwan provided a more straightforward environment for firms looking to expand and establish themselves internationally.
The city-state scored higher compared to other commercially attractive countries in the region like India, Vietnam, Malaysia, Philippines, Mainland China and Indonesia.
The report ranks worldwide jurisdictions by how simple or complicated they are to do business. It measures factors such as rules regulations and penalties, the difficulty of accounting and tax, and the difficulty of hiring, firing and paying staff.
“For overseas companies and investors, a country’s simplicity or complexity is an important but often overlooked factor. And Singapore scores well on this scale. The pro-business policies, its connectivity within Southeast Asia and across the globe, and its highly skilled workforce give it a strong competitive advantage. Firms know that if they set up in Singapore, they can get work done easily,” said Kim Leng Siaw, TMF Group’s Managing Director for Singapore.
Besides that, the report also found that the cost of starting a business in Singapore was low. In particular, the jurisdiction’s “Know Your Client” due diligence requirements are clear and transparent, avoiding some of the bureaucratic obstacles the process entails elsewhere in the world.
But, not everything about the Singaporean business environment was simple.
Singapore is among the minority (30%) of jurisdictions worldwide reporting that the responsibilities of the directors and officers of companies have increased over the last three years. 27% said the amount of responsibilities will increase in the next 5 years.
Likewise, Singapore has introduced regulatory changes such as the requirement to maintain registers of beneficial owners and registers of nominee directors. The mandatory “Know Your Client” due diligence checks may slow down the process of incorporating companies and opening bank accounts.
In addition, complexity increases with the compulsory use of CorpPass as the only login method for online corporate transactions with government authorities as well as the recent changes to Singapore Employment Act in April 2019.
“Almost all the changes we have seen in Singapore have justifications, but even so they represent new challenges for the businesses who must comply with them. Overall, however, the benefits of doing business in Singapore will continue to outweigh the disadvantages,” noted Ms Kim.
Beyond Singapore, the Cayman Islands ranked as the least complex country for business complexity in the world, followed by Curaçao, Jersey and Thailand.
Greece topped the overall list for business complexity, followed by Indonesia, Brazil and the UAE.