Singapore Business Review
ECONOMY | Staff Reporter, Singapore
Published: 14 Feb 13
Still the world's favorite business hub.
According to Janus' Singapore Business Formation Statistics survey, from the 2012 figures, Singapore proved to be a popular destination for business incorporations among foreign companies and entrepreneurs. The British Virgin Islands, China, India, Hong Kong, Japan, United Kingdom, United States, France, Australia, Netherlands Malaysia, and Indonesia, were among the top investing countries in 2012.
An analysis of the 2012 and 2011 figures for company registration by corporate shareholder countries revealed significant increases in the number of companies from China (264%) and Japan (51%).
With the slowdown of the China economy and availability of investment capital, China companies are increasingly finding Singapore an attractive country to expand their business. Singapore’s ASEAN membership provides China companies with greater free trade access to ASEAN countries.
Furthermore, Singapore has a more extensive list of Free Trade Agreements (FTAs) and Investment Guarantee Agreements (IGAs) than China, giving Singapore-based companies more advantages in tariff concessions, preferential access to certain sectors, faster entry into markets, and investment and intellectual property protection in other countries.
As mentioned in the foreword, Japan’s appreciating Yen and recovering economy are driving the country to become a major investor within Asia. Unlike before, Japanese companies setting up business in Singapore are more likely to be small and medium enterprises (SMEs) in the service industry rather than manufacturing companies.
Unemployment, higher taxation and lower disposable incomes in developed countries are slowing down consumption of Japanese electronic and durable goods.
However, Japanese food and beverage companies see good potential in Singapore from the high incomes, low unemployment, willingness to spend on dining and strong appreciation for Japanese cuisine here.
In terms of company registration by individual shareholder countries, there were significant increases in the number of companies from France (65%), Australia (29%) and Japan (27%).
Following the “tax the rich” policy in France, many companies looking to relocate their operations are finding Singapore a good option.
Australian companies are also driven to move key functions to Singapore and other parts of Asia as the costly regulations on director liability are prompting multinational corporations to think twice before investing in the country.
Singapore is a favored choice among Australia-based companies due to the more business-friendly corporate governance regulations in the country.
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