A conducive pro-business environment
Singapore continues to be one of the most pro-business countries in the world. We continue to advocate for free and open trade, further regional economic integration, and a rules-based multilateral trading system. A strong legal ecosystem and a fiscally
sustainable budget are also critical for a stable and business-friendly environment:
- The World Economic Forum’s Global Competitiveness Report 2019 ranked Singapore as the most open and competitive economy in the world, reaffirming our strength in areas like trade openness, infrastructure, and an efficient legal system.
- The World Bank’s Ease of Doing Business Index has consistently ranked Singapore among the top three economies to do business in for the past 14 years. In 2020, Singapore ranked as the second easiest place to do business and did well in two other indicators – fourth in the world for starting a business and first in the world for enforcing contracts.
Read more: Economy and Labour Market
Greater ease of starting and growing a business
It takes only 1.5 days to start a business in Singapore. The streamlining of regulatory processes and the digitalisation of Government to Business (G2B) transactions have made starting a business in Singapore even easier:
- About 327,000 companies have enjoyed cost and time savings with the abolishment of the requirement for company seals since 2017.
- Over 4,000 businesses have one-stop access to various Customs’ e-services and third-party trade services such as trade financing.
- More than 500 food and beverage (F&B) businesses have used the new GoBusiness
Licensing portal since it was launched in October 2019.
- Through this one-stop portal, F&B businesses owners no longer have to spend time figuring out how to secure licences from different public agencies. Now, they are guided through a step-by-step application process which recommends the required licences to them. They also only need to fill out one form and no more than 90 data fields – a significant reduction from 14 forms and up to 845 data fields previously.
- Over time, more services will be added to the portal and rolled out to other sectors so that businesses, regardless of their stage of growth, can experience seamless and convenient transactions with the Government.
Businesses also enjoy greater innovation opportunities through regulatory sandboxes and expedited regulatory approvals:
- KPMG’s Autonomous Vehicles (AVs) Readiness Index 2020 ranked Singapore first for our policy and legislation for AVs, reflecting supportive regulations such as the Land Transport Authority’s regulatory sandbox for AV trials and plans for pilot deployment of AV services in the 2020s. Similarly, 11 medical service providers have joined the Ministry of Health’s telemedicine sandbox, while 10 FinTech experiments were enabled through the Monetary Authority of Singapore (MAS)’s regulatory sandboxes.
- The Accelerated Initiative for Artificial Intelligence (AI) supports expedited regulatory approvals for AI-related inventions, allowing innovators to obtain an AI patent in as fast as six months, compared to an average of two to four years. Companies are also given readily implementable guidance to address key ethical and governance issues through the enhanced Model AI Governance Framework when deploying AI solutions.
Continual improvement of G2B services
In 2019, 77% of businesses were “very or extremely satisfied” with G2B e-services. This was a significant improvement of eight percentage points, as compared to 2018.
- 451,000 entities now enjoy more efficient logins for 30 million transactions per year via the single authentication system through CorpPass.
- Businesses are transacting faster and more securely with the Government and other businesses via MyInfo Business, which auto-populates forms with government-verified entity data such as corporate profile, financial performance, and ownership information. Under a pilot with local banks, businesses on average enjoyed 60% to 80% reductions in the time taken for account openings and loan applications.
- About 100,000 companies have benefitted from the simplified filing of annual returns to the Accounting and Corporate Regulatory Authority.
- With simplified Goods and Services Tax (GST) registration rules, 16,000 businesses with revenue close to $1 million only need to review their GST registration liability once per year, instead of every quarter, from 2019 onwards.
Promoting the rule of law and a rules-based international order
It is in our interest to promote an open and rules-based trading environment for goods and services to flow freely. Singapore participates actively in multilateral fora, such as the World Trade Organisation (WTO), the Association of Southeast Asian Nations, and the Asia-Pacific Economic Cooperation, to ensure that global trade norms reflect the concerns of all countries, big or small. For example, Singapore co-launched the WTO Joint Statement Initiative (JSI) on Electronic Commerce in 2019 to kick-start negotiations for rules governing e-commerce. With its participants accounting for over 90% of global trade, including major players such as the United States, China, and the European Union, the JSI will help the WTO to remain relevant in today’s economy and ensure a fair playing field for businesses riding on the burgeoning potential of e-commerce.
As a global maritime hub, Singapore is also committed to ensuring the freedom of global commons and protecting our critical and strategic waterways:
- Singapore contributes to international efforts to combat piracy and sea robberies. Such efforts include facilitating information sharing among regional maritime agencies through the Republic of Singapore Navy’s Information Fusion Centre, and undertaking air and sea patrols with Malaysia, Thailand, and Indonesia via the Malacca Straits Patrol. In addition, Singapore regularly participates in the Combined Task Force-151 to combat piracy in the Gulf of Aden.
- We have also hosted events and dialogues, such as the International Maritime Security Conference in 2019, to strengthen the rules-based maritime order and promote international norms in line with the United Nations Convention on the Law of the Sea.
Read more: Infrastructure and Logistics
Notably, our strength as an international legal dispute resolution hub is apparent. The Singapore International Arbitration Centre (SIAC) is the third most preferred arbitral institution in the world. In 2019, SIAC heard a record 479 cases, of which over 85% were international cases. This was more than double SIAC’s caseload a decade ago. Businesses also have the option to resolve international commercial disputes by mediation, as the Singapore Convention on Mediation provides greater assurance that mediation settlement agreements will be enforced. The transparent, fair, and efficient handling of legal disputes has given businesses the assurance that their investments are safe.
Singapore law has also become more accessible to international users. Supreme Court judgements have been freely available online since 2000. We have encouraged the development and publishing of research on areas of Singapore law relevant to commercial parties internationally and promoted Singapore law-governed standard forms. In 2019, a survey by the Singapore Academy of Law on the governing law and jurisdictional choices in cross-border transactions found Singapore law to be the second-most adopted governing law for cross-border transactions in Asia.
Stable macroeconomic policies
Singapore’s economic achievement is based on sound macroeconomic policies aimed at maintaining a conducive environment for long-term investment.
Monetary policy in Singapore is centred on managing the exchange rate of the Singapore dollar against a trade-weighted basket of currencies, instead of interest rates. In the small and open Singapore economy, MAS maintains price stability by managing the Singapore dollar exchange rate. During the COVID-19 crisis, MAS kept the exchange rate stable, ensured the smooth functioning of the funding markets by providing more liquidity, and facilitated the flow of credit to the real economy. For example, MAS worked closely with the financial institutions to ensure credit support to households and businesses.
We run a prudent fiscal policy which focuses on promoting long-term economic growth. Through prudent expenditure programmes and fair tax policies, we enjoyed a fiscal surplus position between 2015 and 2018. Surpluses in good years were set aside to help Singaporeans in times of need. In 2019, we set aside over $13 billion to meet Singaporeans’ long-term needs.
To ensure that future generations of Singaporeans are not burdened by debt, we pursue a disciplined and prudent fiscal strategy where we pay for recurrent spending, such as healthcare, preschool education, and security, with recurrent revenues like tax collections.
We are exploring the use of borrowing for major, long-term projects to distribute the share of funding between current and future beneficiaries.
Through responsible fiscal management, Singaporeans can be assured that there will be enough to deal with unexpected shocks and longer-term challenges. This can be seen in 2020 where the nation’s reserves have allowed Singapore to deal with the COVID-19 crisis from a position of strength.
Read more: Emerging Stronger as One