World pays tribute to Singapore PM Lee Kuan Yew for smart tax incentives and outrageous easiness of doing business

Singapore mourns the passing of its first Prime Minister Lee Kuan Yew whose miraculous economic reforms drew the country from the “third world” to the “first” one and turned Singapore into the magnet for businesses from all over the world. Nowadays,

Singapore mourns the passing of its first Prime Minister Lee Kuan Yew whose miraculous economic reforms drew the country from the “third world” to the “first” one and turned Singapore into the magnet for businesses from all over the world. Nowadays, companies incorporated in Singapore benefit from unparalleled economical boosts initiated by this talented politician. Prominent Singapore companies with roots from all over the world as well as politicians pay their tribute to the business genius of Mr. Lee. Pursuing his course of smart tax incentives for new businesses, anti-corruption policy, and easy registration procedures, Singapore made its way to the top of world’s rankings and now proudly bears the title of the planet’s easiest place for doing business (World Bank Report, 2014).  

The author of Singapore economical wonder died at 91. Angling towards today’s business perspectives, main Lee’s achievements were developing the world’s most efficient anti-corruption methods, drawing foreign investments using alluring tax incentives, bringing up the generation of highly skilled, intelligent and hardworking manpower, and creating high-tech transport and communication system – just to name a few. During 20 years (1965-1985), the country’s economy rose eightfold and the unemployment was totally obliterated. How the country of the third world managed to outstrip the U.S. in its per capita income is still beyond common logic.

Lee’s pro-business Singaporean government introduced heaps of innovations that fundamentally changed the philosophy of doing business. Comfort tax schemes for new companies are the most impressive among them. Today’s Singapore’s low corporate tax rate (17%) is complimented with tax incentives schemes for new startups. For example, newly-founded private limited company is freed from paying a corporate tax for its first S$100,000 of income (during 3 consecutive years). For the next S$200,000, the government gives a tax discount of 50%.

Moreover, the government practices a custom approach to its SME by introducing various tax modes for different industries creating the thriving conditions for each sector individually. A global tax survey shows that a typical Singaporean businessman spends approximately 82 hours a year counting and managing his taxes. The same task would take an American entrepreneur up to 170 hours yearly. Affordability and simplicity of tax modes lure investors and entrepreneurs especially from the Old World – Europe – where such tax schemes would sound outrageous.

“Singapore boasts the simplest schemes of company incorporation in the world,” says Cheng King Heng, the senior consultant at One Visa Pte. Ltd., the expert firm in providing company registration services in Singapore. “Here a businessman can knock up a company in 2 working days enjoying full support from the government. Sole proprietorship, private limited, subsidiary, representative or branch office – whatever fits your goals – are possible without hassle, corruption and red tape headache.”

Singapore takes the lead in developing insolvency solutions, protecting investors and intellectual property, simplifying export and import operations and establishing the best standards of international trading. No wonder that Singapore’s investment potential tops the world’s rakings during 14 consecutive years.

Innovations are the key factor of such success. Inspired by PM Lee, Singaporean government creates overwhelmingly comfort conditions for innovative ideas and pampers companies which invest in efficiency-increasing technologies. Only in this country, if the company trains its staff, purchases new high-tech equipment, makes a research or any steps forward advanced IP protection, the government meets it halfway by implying tax deductions (up to 400%), cash bonuses and payouts to cover innovation expenses. In many cases such scheme helps to decrease the company’s corporate tax or even compensate it completely.

We named only a couple of government’s incentives schemes that inspire business’ innovativeness. Piles of them were developed for each niche individually: human resources, communication, management and many others. Mr. Heng says: “Such incredible perks let innovative enterprises thrive in Singapore. It’s a unique place on earth where government doesn’t rob business with draconian taxes and torment with red tape. Successful companies can freely ‘eat their cake,’ not just bake it. This freedom is going to bring more foreign innovative ideas to Singapore this year. Despite the sad loss of our country, Singapore can definitely celebrate the most efficient business procedures ever fulfilled in the world.”

According to Mr. Heng, implanting a company is a hard process that requires a very elaborate approach even when it comes to such a fruitful land as Singapore. “There are a lot of crucial questions that must be competently answered before determining on the best legal entity for incorporation,” he says. “The choice will impact not only your tax mode and opportunities in borrowing money, but also the company’s image and the founder’s personal liability. To achieve the pinnacle of your goals, you need to involve a professional help of incorporation consultants. For every innovative idea we develop a custom corporation solution that hit the target.”

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