You might be surprised to learn that Singapore is one of the world’s business hotspots, and there are many reasons for this.
Here’s why Singapore’s economy is growing, and why it’s becoming an even more prominent business hotspot over time:
The Legal Climate is Super Business-Friendly
Not only does the country have a business-friendly legal climate for a sole proprietorship or corporation, but the legal climate is getting even better for business owners! The country ranks highly in investment freedom, trade freedom, intellectual property laws, an effective judicial system, and financial freedom.
The taxes for business owners in the country tend to be relatively low, and the highest tax bracket for individuals is 22 percent. The highest tax bracket for corporations is even lower at 17 percent, and taxes are going down over time.
Singapore is Politically Stable
Many countries in the world are affected by political instability, but this is not a problem in Singapore.
The major institutions of Singapore are largely free of corruption, and this is a stark contrast when compared to many developing countries in Southeast Asia. It’s considered to be the 7th least corrupt nation in the world, and this can make it easier for startups to get going.
The government of Singapore is democratic, and this ensures that the people have a voice in choosing from ten different political parties. Due to the lack of corruption, elections in the country tend to be free and fair, and this helps to ensure that the political stability in the nation will last for many years to come.
Furthermore, the crime rate in the country is quite low, and this reduces the risk of businesses in the nation experiencing loss. One reason for this is that the country tends to have strict laws.
The Population is Growing
While the population is growing gradually over the course of time rather than as a rapid burst, it’s likely that the population growth will continue over many years.
A higher population means that there are more people in the country who could become business owners, and this means that Singapore will be even more on the map as a global business hotspot in the future.
Singapore is Near the World’s Manufacturing Hubs
The fact that the country is located near the world’s manufacturing hubs means that business travel to the country is frequent. Here are a few of the world manufacturing hubs that are located in the general region of Singapore:
- Bangladesh: Bangladesh is also located in southeast Asia, and a wide range of goods are manufactured in the nation at a significantly lower cost than producing them in many other regions of the world.
- Cambodia: Cambodia is another country that’s located on the mainland of southeast Asia, and it is a developing country where there is some manufacturing taking place.
- China: China is a high-population country that is often considered to be the world’s biggest manufacturing hub, and a wide range of goods are produced there at a low cost to business owners in Singapore.
- India: India is not located extremely close to Singapore, but it is within the same general region of Asia. There are a variety of goods that are manufactured in India at a low cost to Singapore’s business owners, such as many textiles. India is also a high-population country.
- Laos: Laos is another developing country on the mainland of southeast Asia, and some manufacturing takes place there.
- Malaysia: Singapore borders Malaysia, and this means that there is plenty of commerce taking place between the two countries.
- Myanmar: A large number of textiles and other goods are manufactured in Myanmar, and this country is located relatively close to Singapore.
- The Philippines: The Philippines are not located in the same region of southeast Asia like Singapore, but it’s another major manufacturing hub that is also located in southeast Asia. There are a variety of goods that are made in this country.
- Thailand: Thailand is another country on the mainland of southeast Asia, and a variety of goods are produced there.
- Vietnam: Vietnam is not as large as India and China in terms of population or volume of manufacturing, but a significant amount of many different types of goods are made in this country.
The Country Weathered the Recession Well
The economy did contract somewhat during the recession during 2008, but it was nothing even close to what occurred in some other countries.
The economy was estimated to have contracted between one and two percent, but this is a mere fraction compared to what occurred in some parts of the world.
In addition, the economy of the country bounced back quite fast after the recession, and it even showed growth of around 15% during recovery from the 2008 crash!
There’s Quite a Bit of Manufacturing Going on Right in Singapore
While manufacturing is not the only or primary reason for Singapore’s economic strength, it certainly does play a strong role, and it’s estimated that 20% of the country’s GDP originates from manufacturing.
Furthermore, 15% of the country’s workforce is employed in the manufacturing sector of the economy.
One industry that is especially important in Singapore is the petrochemical industry, and these products are exported throughout the world.
Singapore is Part of Multiple International Trade Unions
Singapore is part of NATO, ASEAN, and an agreement with the European Union, and these trade unions are highly beneficial to the country’s economy as Singapore does a lot of business with countries in all of these regions.
They also have a strong trade partnership with Indonesia, and this plays a very strong role in the nation’s economy.
While these are some of the most important reasons why the economy of Singapore is thriving, there are other factors involved.
Many economic experts feel strongly that the economy of the nation is likely to grow for many years to come, and it’s likely that experts will identify other reasons why the economy of the nation is successful in years to come.
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