| Build on core competencies in manufacturing
2.11 We must continue to build on our strengths in
manufacturing, which continues to be a key pillar
of our economy. Despite fierce competition, we remain
one of the best locations in Asia for high value-added
manufacturing activities. Last year, we attracted $8.3
billion in fixed asset investment in manufacturing.
China and India have eroded some of our lower end activities,
but this has not blunted our core competitiveness as
a manufacturing hub. One reason is that MNCs are locating
not just their production operations here, but also
their regional headquarters, taking advantage of our
international connectivity, excellent communications
infrastructure and financial services. Even Chinese
and Indian companies have established regional headquarters
in Singapore.
2.12 Many regional headquarters include a financial
and treasury centre (FTC). We will enhance our position
as a premier location for regional headquarters by expanding
the tax incentive for FTCs. Associated companies of
the FTC in Singapore may now qualify as approved network
companies. The scope of the qualifying activities and
services will be expanded to include Singapore-dollar
denominated transactions. The income derived by the
FTC from these enhancements will also qualify for the
concessionary tax rate, with effect from today.
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