Final Singapore .IM............FINAL2003 FORMAT

8/6/2019 Final Singapore .IM............FINAL2003 FORMAT

http://slidepdf.com/reader/full/final-singapore-imfinal2003-format 1/36



SINGAPORE





OBJECTIVEST o study the business environment of

Singapore

To identify key issues that need to beconsidered by entrepreneurs while

contemplating strategies for possible expansion

and trade in Singapore



INTRODUCTIONSingapore- Population: 4,608,167

Official name ± Republic of Singapore

Official Languages ± English, Mandarin, Malay, T amil

Currency ± Singapore dollar (SGD)

Capital city ± Singapore city

Government type: parliamentary republic.

Location: Southeastern Asia, islands between Malaysia and Indonesia

Ethnic Make-up: C hinese 76.7%, Malay 14%, Indian 7.9%, other 1.4%

Religions: Buddhist ( C hinese), Muslim (Malays), C hristian, Hindu, Sikh,T aoist, C onfucianist.



Culture of SingaporeSingaporeans 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 tend to be subtle, indirect and implicit in their communications.

They hint at a point rather than making a direct statement, since that mightcause the other person to lose face.

Rather than say 'no', they might say, 'I will try', or 'I'll see what I can do'.This allows the person making the request and the person turning it down

to save face and maintain harmony in their relationship.

Silence is an important element of Singaporean communication.

Pausing before responding to a question indicates that they have giventhe question appropriate thought and considered their response carefully.



Business Etiquette and ProtocolBusiness in Singapore is more formal than in many western

countries.

T here are strict rules of protocol that must be observed.

T he group (company or department) is viewed as more important thanthe individual.

People observe a strict chain of command, which comes withexpectations on both sides.

In order to keep others from losing face, much communication will benon-verbal and you must closely watch the facial expressions and

body language of people you work with .



Business Meeting Etiquette Appointments are necessary and should be made at least 2 weeks in advance,whenever possible.

The most formal way to schedule a meeting is to write to the person concerned, althoughmost Singaporeans will schedule an appointment by telephone, fax, or e-mail.

Do not try to schedule meetings during C hinese New Year (late January/early February),since many businesses close for the entire week.

Punctuality is a virtue.

T here will be period of small talk before getting down to business discussions.

Since questioning authority is a taboo, it is important to encourage questions when after making a presentation and then smile when a question is eventually asked.

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.

Pay attention to non-verbal communication



Business Negotiating Etiquette Always send a list of people who will be attending the negotiations and their title well inadvance.

Always wait to be told where to sit. T here is a strict hierarchy that must be followed.

Business negotiations happen at a slow pace.

Singaporeans are non-confrontational. T hey will not overtly say 'no'; likewise, their 'yes' doesnot always signify agreement

Singaporeans give a respectful pause of up to 15 seconds before answering a question. Donot 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 notinjure your own business.

Singaporeans are tough negotiators on price and deadlines.Decisions are consensus driven

Avoid losing your temper or you will lose face and damage your relationship.

If you are signing a contract with ethnic C hinese, the signing date may be determined by an

astrologer or a geomancer (feng shui man).



T axation in SingaporeSingapore is often cited as the leading example of countries that continues to reduce corporate income tax

rates and introduce various tax incentives to attract and keep global investments.

Singapore ranks second, after the Maldives for the ease of paying taxes, says a recent report launched bythe World Bank, IF C , and Pricewaterhouse C oopers (Pw C ).

Inland Revenue Authority of Singapore (IRAS) is the statutory body that administers the effectiveassessment, collection and enforcement of all major types of taxes in Singapore including corporateincome tax, personal income tax, property tax...etc.

Single- T ier T ax System:

Since January 1, 2003, Singapore has adopted a single-tier corporate income tax system, which meansthere is no double-taxation for stakeholders. T ax paid by a company on its chargeable income is the final

tax and all dividends paid by a company to its shareholders are exempt from further taxation.

No C apital Gains T ax:

T here is no tax on capital gains in Singapore. Examples of capitals gains include gains on sale of fixedassets, gains on foreign exchange on capital transactions, etc.



Corporate T ax Rate: Singapore's headline corporate tax rate is a flat 18% at present.Effective YA 2010, corporateincome tax rate will be reduced from 18% to 17% to help maintain Singapore'scompetitiveness.

1997-00 2001 2002 2003-04 2005-06 2007-09 201026% 25.5% 24.5% 22% 20% 18% 17%

Individual T ax: 0 ± 20%.

An individual is a tax resident in Singapore if he resides in Singapore, or is:1.Physically present in Singapore for 183 days or more; or 2.Employed in Singapore for 183 days or more.

Foreign income received in Singapore by non-residents is not subject to tax. T he tax year is known as a year of assessment and runs from 1 January to 31 December. T ax isimposed on a preceding year basis.

Property T ax:

T he tax rate for industrial and commercial properties is 10%.owner-occupied residential properties are taxed at a concessionary rate of 4%.Property tax exemption for land under development may be granted in certain cases.



T ax Incentives0% tax on S$1 00K taxable incomeThe corporate tax rate is 0% on the first S$1 00 ,000 taxable income for each of the first three tax filing years for anewly incorporated company that meets the following conditions:1.be incorporated in Singapore2.be tax resident in Singapore3.has no more than 2 0 shareholders of which at least one is an individual shareholder holding at least 1 0% of shares.

9% tax on taxable income of upto S$3 00K

All Singapore resident companies are eligible for partial tax exemption which effectively translates to about 9 % tax rate on taxable income of upto S$3 00 ,000 per annum. The taxable income above S$3 00 ,000 will be charged at

the normal headline corporate tax rate of 18%

.So, THE Effective Corporate Tax Rate:

First Three Years of Income Tax Filings

Taxable Income (S$)Tax Rate0 - 100 ,000 0%

100 ,00 1 - 3 00 ,000 9%

300 ,000 - 400 ,000 18%

After First Three Years of Income Tax Filings

Taxable Income (S$)Tax Rate0 - 300 ,000 9%

300 ,000 - 400 ,000 18%



T ax T reaties A tax treaty between two countries is generally anagreement that specifies how the income earned will betaxed by the authorities of each country when a company isinvolved in doing business in both countries.

Main benefit: T o help businesses avoid double taxation of their income.

Singapore has concluded tax treaties with more 50

countries and the list continues to grow.T

he treaties reflectSingapore's continual efforts to help businesses in relievingdouble taxation and to encourage and facilitate the tradeand investment opportunities across-borders.



Singapore Goods and Services T ax (GS T ):

Goods and Services T ax (GS T ) is similar to Valued Addede T ax (VA T ) in other countries and is arelatively new form of tax in Singapore.

The current rate of GS T is 7%

GS T registration is mandatory for business entities with an annual turnover of more than S$1 million.

Benefits of GS T to business:

1. Getting your business GS T registered is often a signal to the market that your business is competing

in the same way.2. GS T is a fairer tax system. It taxes the self-employed and wage earners whenever they spend their money.3. GS T taxes apply only on consumption. Savings and investment are not taxed.4. C ost of doing business is reduced, thereby contributing to lower prices. Businesses do not suffer a taxcost due to the multi-stage credit mechanism since the real taxpayer is the end-user.

What goods and services are/are not subject to GS T? :

1.taxable supplies: A taxable supply, is a supply of goods or services made in Singapore, other than anexempt supply.2.exempt supplies: GS T is not chargable on exempt supplies of which there are two categories - saleand lease of residential land; and financial services.



Setting up Foreign Business inSingapore

In Singapore one can open foreign business through sole-proprietor, partnership,limited liability partnership or incorporate a company in Singapore.

All foreign business should register with (A C RA) Accounting & C orporate

Regulatory Authority



Business Visas and PassesEntrePass

The EntrePass is required for foreigners who wish to start a new business in Singapore.

The EntrePass allows registered entrepreneurs and their families to live in Singapore. You may leaveand 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 who travel in and out of Singaporefrequently either to attend to business matters and investments or to look for business opportunitiesin Singapore.

The visa is valid for 1, 2 or 5 years.

Passes For Foreign Employees

If your branch office, representative office or newly established business intends to hire employeesfrom your home country, you will need to apply for Employment Passes and Work Permits.



NON TAX INCENTIVE

Legal Enterprise Finance Scheme (LEFS)Local Enterprise T echnical Assistance Scheme(LETAS)

Start-up Enterprise Development Scheme (SEEDS)

INCENTIVES FOR HIGH-TECH BUSINESS .Skills Development Fund (SDF)

Initiatives In New T echnology (INTECH)



LABOUR

Workforce.





LABOUR SCHEMES

Labour/Management Relations

Central Provident Fund(CPF)

Skills Development Fund



FREE TRADE AGREEMENT

ASEAN-Australia-New zeland (AANZFTA)

FTA¶s embodied by WTO are as follows,U.S., ASEAN, Australia, European Free T rade

Association, Hashemite Kingdom of Jordan, India,Japan, South Korea, Panama and with Brunei, C hileand New Zealand under the T rans-Pacific SEP(Strategic Economic Partnership) Agreement.

Ongoing FTA Negotiations with Bahrain,C anada, Egypt, Mexico, Pakistan, Peru, Sri Lanka,State of Kuwait, State of Qatar and the UAE (United

Arab Emirates) and the Gulf C ooperation C ouncil.



TOURISM INDUSTRY A rich and amazing country with harmonious blend of culture, cuisine,arts andarchitecture

Singapore T ourism Board Launches s$90 Million to boost T ourismSector in 2009

Singapore T ourism Board has forecasted in 2009 budget 9-9.5 million in visitor arrivals and s$12-s$12.5 millions in tourism receipts.



Electronics IndustryPick an electronics a gadget today there are very good chance that part of itwas designed or made in Singapore.

Singapore aims to be a world class electronics hub in creating manufacturingsolutions and producing high-value-added components for global market.

Electronics is the major industry for economic growth of Singapore.

Electronics industry contributes 26% of the city-state¶s manufacturing of s$18billion in fixed asset investments in 2008.

91,645 people were employed in electronics sector in 2008.

6 of the world¶s top 10 EMS companies have significant presence in Singapore.



Education IndustrySingapore is attracting many international students for the education abroad There are more than 18 international universities in singapore.It contributes about 2% of Singapore¶s GDP and is forecasted to reach 5%by 2015.

OTHER INDUSTRIES SECTORS CONTRIBUTING IN THEECNOMIC GROWTH OF SINGAPORE ARE :-Service Sector Hospitality Sector Natural Resource IndustryMarine Industry



IMPORTS

The total imports till Mar/09 were S$m27,617.8

ASIA-276,406

USA-48,656

EUROPE-56,805

AFRIC A-1,817

0

0

7

6 7 O



IMPACT ON MAR K ETS AND PRODUCTSEGMENTS





EXPOR T SThe total exports till Mar/09 were S$m 31, 8.8

Singapore¶s key export partners included Malaysia, Indonesia ,Hong K ong and China , as well as the G3 economies.



TAXES AND FEES

Customs and excise duties have to be paid todutiable goods manufactured in Singapore.Includes liquors, motor vehicles, petroleumproducts and tobacco products.

No need to pay GS T on exports.

Fees to customs for supervision and inspection

of your goods.



GDPGDP = 176.543 US$ billon (as per IMF)

GDP GROWTH = 1%-2%PER CAPITA GDP = US$37,169INFLATION = 0.04%

GDP had declined by 12.5 percent in real terms in the fourthquarter of 2008 and revised downwards its growth estimates for 2009 .

Slowdown in Financial Services.

Fall in demand in Manufacturing.



FDI

WEAK

GLOBAL OUTLOOK

-T

he United NationsC onference on T rade and Development (UN CT AD)



EXPECTED DECLINE IN SINGAPORE¶SFDI INFLOWS



MAJOR INVESTOR COUNTRY:

United Kingdom

United StateNetherlandsJapanMalaysia.

MAJOR SECTORS ATTRACTED:ManufacturingWholesale and retail tradeFinancial and Insurance services

Professional and technical, Administrative and support servicesInformation and communications





CONCLUSION

Advantages ± strong and stable physical, legal and social

infrastructure ± pro-business tax regime ± wide range of flexible financial schemes ± highly skilled domestic labour force ± easy entry of foreign talent

± an ever-expanding network of free trade ± investment guarantee agreements that giveSingapore-based businesses preferentialsafe access to international markets



THANK YOU

Documents

Final Singapore .IM............FINAL2003 FORMAT