With the power of increased connectivity, startups are increasingly able to choose where they do business. With its strong economy, well-educated populace and favorable tax treatment, Singapore should be high on their lists.
1. Thriving Economy
Singapore’s economy is highly developed. For example, it is one of the richest nations in Asia (GDP per capita S$52,932) and individuals have access to financial services (96.5% have bank accounts). Additionally, it has excellent internet access; more than 4 of 5 individuals use the internet. These factors benefit consumer-focused and tech startups.
2. Capable Workforce
Singapore is one of the most highly educated nations, globally. As of 2015, 79.3% of adults had at least a secondary education, while 42.9% had a tertiary education. These education rates indicate that Singaporeans are typically well-educated. This is particularly helpful for startups that require skilled labor. Also, this contrasts with some of its neighboring countries in Asia, some of which have secondary education attainment rates of less than 50%.
3. Supportive Government
While Singapore is typically among the most expensive places to live, the government offers tax incentives for startups to make it a more attractive location to start a business. The Start-up Tax Exemption Scheme (SUTE) exempts 75% of a businesses first S$100,000 chargeable income and 50% of the next S$100,000. Additionally, the government partners with local banks grants to small businesses. These government-backed loans provide SMEs with financing ranging from short-term micro loans to large venture venture loans. Finally, Singapore’s public institutions are well-regarded; the World Economic Forum ranked them second, globally.
4. Easy Access to Capital
Finally, startups in Singapore have good access to financing for their businesses. The World Economic Forum ranks Singapore #4 for availability of venture capital, globally. Furthermore, its other financing options are not prohibitively expensive. For example, interest rates (10-year government bond: 2.3%) in Singapore are the fourth lowest among Asia Pacific countries. This is crucial for startups that require business loans to grow their businesses. There are also many alternatives to traditional business loans in Singapore, with many crowdfunding platforms that have launched and prospered in the country.