May 24 – Singapore companies are now pulling in just under 75 percent of their total revenues for operations external from the country, the Singapore Import-Export Agency has confirmed. That is a rise from 64 percent last year and indicative of the Southeast Asian city-state’s increasing popularity as a regional tax haven – the country levies no income tax on profits or dividends earned overseas.
The Singapore Import-Export Agency also found that 67 percent of Singaporean SMEs intend to expand their overseas business within the next 12 months, and some 73 percent of them will be expanding their operations into Asian and ASEAN markets. China, Vietnam and Indonesia are the top three destinations for outbound investment from Singapore, the agency said.
Singapore is the financial capital for ASEAN, the 10 nation Southeast Asian trade bloc that is expanding its free trade agreements across Asia. FTAs have already been signed with China, India, Australiasia, Japan and Korea, while trade between ASEAN nations such as Indonesia, Malaysia, Thailand and Vietnam are already covered within the ASEAN bloc itself.
Singapore’s corporate income tax rate is a relatively low 17 percent, and with its world renowned reputation with regards to ease of doing business and setting up companies, more foreign businesses are establishing a presence in the country to access the Asian market.
Our guide to setting up and operating companies in Singapore and the double tax treaties the country has is available on the Asia Briefing Bookstore while the role of ASEAN and its importance in Asia was discussed earlier this week on our China Briefing website.
Dezan Shira & Associates is a professional services firm assisting foreign investors looking to enter the Asian market. Established in 1992, the practice has offices in Singapore, China, India, Vietnam and Hong Kong. For assistance with corporate establishment and tax planning throughout Asia, please email the firm at asia@dezshira.com or visit the firm’s website at www.dezshira.com.
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