Why is Singapore a good place to do business?
by Judy Lim
Global businesses choosing to base their international HQs in Singapore can benefit from its keen pro business regime as well as its network of 50 comprehensive double taxation avoidance agreements, writes Judy Lim, head of Russian investment bank VTB Capital in Singapore.
A modern tropical island spanning a mere 710 square kilometres, Singapore is often regarded as one of the most dynamic cities in the world to work and live in.
The globally connected, multi-cultural and cosmopolitan city state with a population of 5 million offers one of the most conducive environments globally for knowledge-driven industries.
Over the last four decades, Singapore has transformed itself from a centre of entrepôt trade to one of the world's leading financial centres, international air and sea hubs and one of the most open economies for trade and investments.
Businesses in Singapore are guaranteed access to a competent and impartial judicial system, clarity and consistency of government guidelines, commitment to good corporate governance and the enforcement of a strong anti-corruption policy.
The pro business stance is accompanied by excellent infrastructure, a highly skilled and a cosmopolitan labour force.
Ranked by the Swiss-based International Institution for Management Development's 2010 Competitive Yearbook as the most competitive country in the world, Singapore is also one of the easiest places to do business where entrepreneurs are known to take less than a week to set up businesses at relatively low start up costs.
In its bid to stay competitive, Singapore has successfully steered its economy towards high knowledge based industries with a strong emphasis on innovation and R+D from the turn of the century.
The government's goal of increasing gross expenditure on R+D and its relentless enforcement to protect intellectual property makes it a suitable place for businesses in pursuit of innovation and ideas to give to define their competitive edge.
Global businesses choosing to base their international HQs here can benefit from the nation state's network of 50 comprehensive double taxation avoidance agreements. As an active member of the World Trade Organization, businesses located here enjoy numerous free trade agreements and investment guarantee agreements with many countries located in Asia and globally.
As a leading financial centre, Singapore is an effective provider of international banking, trade finance, maritime finance, insurance, treasury operations and asset and wealth management service within the Asian region.
Companies looking to operate here can tap the deep and diverse capital markets in Singapore and access the hosts of local and international financial institutions and professional service institutions based here.
VTB Capital, the successor to Moscow Narodny Bank set up some 40 years ago to promote Soviet foreign trade and cooperation between Russia and Singapore, has long recognised Singapore's unique role in Asia. The two countries have traditionally strong political and business ties.
As we brace for a period of strong growth in business and capital flows between Russia and Asia, VTB Capital, is committed to facilitate the surge of activity. VTB Capital will look to capitalise on its operations in Singapore to build it presence in Asia to execute our ambitious growth plans in the region.
Russian companies keen to diversify their funding base to include new currencies and geographies, are expected to follow VTB Bank's lead in issuing Sing-dollar and yuan bonds. In July 2010 VTB Capital successfully placed a VTB Bank SGD 400mn Eurobond issue with a 2 year maturity. The coupon was set at 4.2 per cent per annum and the securities are listed on the Singapore Exchange.
The Eurobond issue placement translated into the largest transaction in Singapore dollars in 2010 by foreign issuer. The deal generated strong demand, making it possible to significantly increase the issue size.
Investors from Singapore, Hong Kong and other Asia Pacific countries as well as Europe participated in the transaction and it later won Best High Yield Bond Deal of the Year in the 4th Annual Alpha Southeast Asia Deal & Solution awards.
While the world economy remains fragile, the Asia economies have demonstrated their resilience through the global financial crisis and their uncanny abilities to bounce back from the aftermath of the global shocks.
Singapore is and will remain one of Asia's brightest economic stars.
While the size of the island and its population may seem irrelevant amongst the large nations that make up the Asian continent, this nation state and its determined people have resolved to constantly reinvent, retrain and reposition themselves to stay relevant.