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Singapore Investment

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Tips:InvestmentOpenness to Foreign Investment Foreign investments, combined with investments through government-linked corpor
 Investment

Openness to Foreign Investment 

Foreign investments, combined with investments through government-linked

corporations (GLCs), underpin Singapore's open, heavily trade-dependent economy. 

With the exception of restrictions in the financial services, professional services, and

media sectors, Singapore maintains a predominantly open investment regime. The

World Bank's "Doing Business 2010" report ranked Singapore as the easiest country in

which to do business.  "The Global Enabling Trade Report 2009" by the World Economic

Forum ranked Singapore first for having the most open economy for international trade

and investment.  The U.S.-Singapore Free Trade Agreement (FTA), which came into

force January 1, 2004, expanded U.S. market access in goods, services, investment,

and government procurement, enhanced intellectual property protection, and provided

for cooperation in promoting labor rights and the environment.

 

The Government of Singapore is strongly committed to maintaining a free market but

also takes a leadership role in planning Singapore's economic development. The

government actively uses the public sector as both an investor and catalyst for

development. As of November 2008, the top six Singapore-listed GLCs accounted for

nearly 24 percent of total capitalization of the Singapore Exchange (SGX). Some

observers have criticized the dominant role of GLCs in the domestic economy, arguing

that it has displaced or suppressed private sector entrepreneurship and investment.

Singapore's aggressive pursuit of foreign investment as another pillar of its overall

economic strategy has enabled the country to evolve into a base for multinational corporations (MNCs). The Economic Development Board (EDB), Singapore's investment

promotion agency, focuses on securing major investments in high value-added

manufacturing and service activities as part of a strategy to replace labor-intensive, low

value-added activities that have migrated offshore.

Measure Year  Ranking

TI Corruption Index   2009 #3

Heritage Economic Freedom  2009 #2

World Bank Doing Business  2009 #1

Singapore's legal framework and public policies are generally favorable toward foreign

investors. Foreign investors are not required to enter into joint ventures or cede

management control to local interests, and local and foreign investors are subject to the

same basic laws. Apart from regulatory requirements in some sectors (see "Limits on

National Treatment and Other Restrictions"), the government screens investment

proposals only to determine eligibility for various incentive regimes (see Annex).

Singapore places no restrictions on reinvestment or repatriation of earnings or capital.

The judicial system upholds the sanctity of contracts, and decisions are effectively

enforced.

Limits on National Treatment and Other Restrictions: Exceptions to Singapore's general

openness to foreign investment exist in telecommunications, broadcasting, the domestic

news media, financial services, legal and other professional services, and property

ownership. Under Singapore law, Articles of Incorporation may include shareholding

limits that restrict ownership in corporations by foreign persons.

Telecommunications: The Telecoms Competition Code opened the industry in 2000 to

foreign or domestic companies seeking to provide facilities-based (fixed line or mobile)

or services-based (local, international, and callback) telecommunications services.

Singapore Telecommunications (SingTel), the former monopoly and currently 55-percent

government-owned, faces competition in all market segments. Its main competitors,

MobileOne and StarHub, are also GLCs. Singapore has approximately 46 facilitiesbased (group) and 234 services-based (individual) operators.

The FTA requires that Singapore take steps to ensure that U.S. telecom service

providers obtain the right to interconnect with networks in Singapore at competitive rates

and on transparent and reasonable terms and conditions. Despite the Infocomm

Development Authority's (IDA) requirement that SingTel offer wholesale prices for localleased circuits at reduced rates, U.S. industry is still unable to avail itself of this more

competitive pricing structure due to certain uneconomical technical interconnection

requirements imposed by SingTel.

SingTel announced in June 2006 plans to consolidate its local exchanges but did not

provide details of specific local exchanges to be closed. This has put U.S. and other

carriers' build-out plans on hold. IDA issued a decision in June 2007 that increases the

notification period SingTel must provide from six to 18 months. IDA has denied requests

by U.S. and other companies for interconnection at more centralized locations. Under

the FTA, Singapore has also agreed that dominant licensees (SingTel and StarHub)

must offer cost-based access to submarine cable-landing stations and allow sharing of

facilities. U.S. and other companies continue to have problems with access to interexchange ducts as provided for in the FTA.

Since 2007, SingTel has been exempted from dominant licensee obligations for the

residential and commercial portions of the retail international telephone services. In

August 2008, IDA granted preliminary approval to exempt SingTel from dominant

licensee obligations for three of the 13 telecommunication services SingTel provides to

business and government end-users. SingTel appealed for exemption of all 13 services.

IDA decided in June 2009, following a formal public consultation held in September

2008, that SingTel will be exempted from dominant licensee obligations, ex ante, for

three of the 13 services, i.e., Terrestrial International Private Leased Circuit, Backhaul,

and International Managed Data Service.  

U.S. and other companies remain concerned about the lack of transparency in some

aspects of Singapore's telecommunications regulatory and rule-making process. In

particular, there is no obligation to make information publicly available concerning a

company's request for a stay of decision or the filing of an appeal, to request public

comments about such requests, or to publish a detailed explanation concerning final

decisions made by IDA or the Ministry of Information, Communication and Arts (MICA).

Infrastructure for the next generation access network, a national broadband all-fiber

network, is being built by OpenNet, a consortium formed by Canada's Axia Netmedia

(which holds 30-percent ownership), SingTel (30 percent), Singapore Press Holdings (25

percent), and SP Telecommunications (15 percent).  The network will be operated by

Nucleus Connect, a wholly-owned subsidiary of StarHub.  When completed in 2012, the

broadband network may allow fuller access to telecom services providers to reach

homes and businesses without requiring access to SingTel-owned circuits. Media: The

local free-to-air broadcasting, cable and newspaper sectors are effectively closed to

foreign firms. Section 44 of the Broadcasting Act restricts foreign equity ownership of

companies broadcasting to the Singapore domestic market to 49 percent or less,

although the Act does allow for exceptions. Individuals cannot hold more than five

percent of the shares issued by a broadcasting company without the government's prior

approval.

The Newspaper and Printing Presses Act restricts equity ownership (local or foreign) to

five percent per shareholder and requires that directors be Singapore citizens.

Newspaper companies must issue two classes of shares, ordinary and management,

with the latter available only to Singapore citizens or corporations approved by the

government. Holders of management shares have an effective veto over selected board

decisions. The government controls distribution, importation and sale of any "declared"

foreign newspaper, and significantly restricts freedom of the press, having curtailed or

banned the circulation of some foreign publications. The government has also "gazetted"

foreign newspapers, i.e., numerically limited their circulation. Singapore's leaders have

brought defamation suits against foreign publishers. Such suits have resulted in the

foreign publishers issuing apologies and paying damages.

MediaCorp TV is the only free-to-air TV broadcaster; the government owns 80 percent

and SGX-listed Singapore Press Holdings (SPH) owns 20 percent. Pay-TV providers,

StarHub Cable Vision (SCV) and MioTV are wholly-owned subsidiaries of StarHub and

SingTel, respectively. Free-to-air radio broadcasters are mainly government-owned, with

MediaCorp Radio Singapore being the largest operator. BBC World Services is the only

foreign free-to-air broadcaster in Singapore.

Banking: The Monetary Authority of Singapore (MAS) regulates all banking activities as

provided for under the Banking Act. Singapore maintains legal distinctions between

foreign and local banks, and the type of license held by foreign banks -- full service,

wholesale, and offshore. As of December 2009, 25 foreign full service licensees, 46

wholesale licensees, and 42 offshore licensees operated in Singapore. All offshore

banks are eligible to be upgraded to wholesale bank status based on MAS criteria to

enable them to conduct a wider range of activities. Except in retail banking, Singapore

laws do not distinguish operationally between foreign and domestic banks.

The government initiated a banking liberalization program in 1999 to ease restrictions on

foreign banks and has supplemented this with phased-in provisions under the FTA.

These measures include removal of a 40-percent ceiling on foreign ownership of local

banks and a 20-percent aggregate foreign shareholding limit on finance companies. It

has stated publicly, however, that it will not approve any foreign acquisition of a local

bank. Acquisitions exceeding prescribed thresholds of 5 percent, 12 percent or 20

percent of the shares or voting power of a local bank require the approval of the Finance

Minister.

Singapore has granted 25 full service licenses to foreign banks, including four U.S.

banks. Of these 25, seven, including one U.S. bank, have also been granted "qualifying

full bank" (QFB) status. U.S. financial institutions enjoy phased-in benefits under the

FTA. Since January 2006, U.S.-licensed full service banks that are also QFBs have

been able to operate at an unlimited number of locations (branches or off-premises

ATMs). Non-U.S. full service foreign banks with QFB status have been allowed to

operate since January 2005 at up to 25 locations. U.S. and foreign full-service banks

with QFB status can freely relocate existing branches, and share ATMs among

themselves. They can also provide electronic funds transfer and point-of-sale debit

services, and accept services related to Singapore's compulsory pension fund.

Locally and non-locally incorporated subsidiaries of U.S. full-service banks with QFB

status can apply for access to local ATM networks. However, no U.S. bank has come to

a commercial agreement to gain such access. Singapore lifted its quota on new licenses

for U.S. wholesale banks since January 2007. Singapore abolished quotas on new

licenses for full-service foreign banks in July 2005.

Despite liberalization, U.S. and other foreign banks in the domestic retail banking sector

still face barriers. Local retail banks do not face similar constraints on customer service

locations or access to the local ATM network. Holders of credit cards issued locally by

foreign banks or other financial institutions cannot access their accounts through the

local ATM networks. They are also unable to access their accounts for cash withdrawals,

transfers or bill payments at ATMs operated by banks other than those operated by their

own bank or at foreign banks' shared ATM network. Nevertheless, full-service foreign

banks have made significant inroads in other retail banking areas, with substantial

market share in products like credit cards and personal and housing loans.

INCENTIVES ADMINISTERED BY THE MONETARY AUTHORITY OF SINGAPORE

(MAS)

As part of the government's strategy to develop Singapore into a premier financial

center, MAS offers tax incentives for financial institutions looking to set up operations

here.

A Financial Sector Incentive ("FSI") Scheme

B. Tax Incentive Scheme for Qualifying Processing Services Company

C. Tax Incentive Scheme for Offshore Insurance Business

D. Tax Exemption Scheme for Marine Hull & Liability Insurance Business

E. Abolition of Withholding Taxes on Financial Guaranty Insurance Contracts

F. Tax Incentive Scheme for Approved New Derivative Products traded on the

Singapore Exchange

G. Tax Incentive Scheme for Finance and Treasury Centers

H. Tax Incentive Scheme for Approved Trustee Companies

I. Tax Incentive Scheme for Syndicated Facilities

J. Innovation in Financial Technology & Infrastructure Grant Scheme

K. Tax Incentive for Trading Debt Securities

L. Financial Sector Development Fund

M. Financial Investor Scheme for Singapore Permanent Residence

N. Foreign Charitable Trust Incentive

O. Tax Incentive for Approved Fund Managers

P. Over-the-Counter (OTC) Financial Derivative Payments

Q Insurance and Re-insurance Broking Tax Incentive

R. Wealth Management Tax Incentive

Further guidelines and application information are available at http://www.mas.gov.sg

INCENTIVES ADMINISTERED BY THE ECONOMIC DEVELOPMENT BOARD (EDB)

A. Pioneer Status

B. Development & Expansion Incentive

C. Investment Allowance Incentive

D. Approved Foreign Loan Scheme

E. Approved Royalties Incentive

F. Entrepreneurship Investment Incentive

G. HQ Program

H. Double Deduction for Research and Development (R&D) Expenses 

I. Research Incentive Scheme for Companies

J. Exemption of foreign sourced interest and royalty income for R&D purposes

K. Innovation Development Scheme

L. Initiatives in New Technology

M. Integrated Industrial Capital Allowance

N. Special Goods & Services Tax Scheme for 3rd Party Logistics Service Providers

O. The Enterprise Challenge (TEC) Scheme

P. Writing Down Allowance (WDA) for IP rights acquisition

Further guidelines and application information are available at http://www.sedb.com.

INCENTIVES ADMINISTERED BY INTERNATIONAL ENTERPRISE SINGAPORE (IE

Singapore)

A. Double Tax Deduction (DTD) Scheme for Overseas Investment and Market

Development

B. Export Coverage Scheme

C. Enterprise Fund 

D. Loan Insurance Scheme 3

E. Loan Insurance Scheme Plus

F. Internationalization Finance Scheme

G. International Business Fellowship 

Further guidelines and application information are available at

http://www.iesingapore.gov.sg.

INCENTIVES ADMINISTERED BY THE MEDIA DEVELOPMENT AUTHORITY (MDA)

A. Market Development Scheme (MDS)

B. TV Content Industry Development Scheme

C. Digital Content Development Scheme

D. Digital Technology Development Scheme

E. INVIGORATE – PC Casual Game Initiative

F. Synthesis – Online Content Initiative

G. Film in Singapore! Scheme

H. International Cooperation Agreement

I. Short Film Grant

J. Overseas Travel Grant

K. New Feature Film Fund

L. Script Development Grant

M. Overseas Travel Grant

N. SCREEN – Scheme for Coinvestment in Exportable Content

O. Media Education Scheme

P. 360-degree TV

Q. IDEAS (Animation Development)

R. Futurescape

S. Microsoft XNA Development Initiative

T. SPINE

U. 35mm Fulfillment Fund

V. Stereoscopic 3D Film Development Fund

Further guidelines and application information are available at http://www.mda.gov.sg.

INCENTIVES ADMINISTERED BY INFOCOMM DEVELOPMENT AUTHORITY

OF SINGAPORE (IDA)

A. Infocomm@SeaPort

B. Infocomm@SME

C. Integrated Clinic Management Systems Program

D. Digital Manufacturing Program

E. Collaborative High Tech Manufacturing Plan

F. Retail eSCM Ecosystem

G. RFID Initiative

Further information, details, and guidelines are available at http://www.ida.gov.sg.

INCENTIVES ADMINISTERED BY MARITIME PORT AUTHORITY (MPA)

A. Approved International Shipping Enterprise Scheme

B. Approved Shipping and Logistics Scheme

C. Maritime Cluster Fund

D. Maritime Enterprise IT Development Program

E. Maritime Innovation and Technology Fund

F. Maritime Finance Incentive

Further information, details and guidelines are available at http://www.mpa.gov.sg

Laws

Singapore is a highly country with an adequate legal system. The law is mainly composed of the constitution, laws and subsidiary regulations. As a result of Singapore under British colonial rule in Nineteenth Century, so her legal system belongs to the British common-law system, but also effected by other national laws. For example, the Criminal Code, Evidence Act and the Criminal Procedure Code, used India’s in nineteenth century for reference. Singapore company law are closer to Australia but not the British model. Singapore law also has diversity in Laws, that is to say, in a country where, different laws apply in different groups, such as Islamic law which manages of Muslim community religion, marriage and related matters.

As the supreme law the Constitution of Singapore draft the structure and organization of the 3 organzations of the nation: the government, the Legislation and administration of justice, other laws like Corruption Prevention Act and so on together to constitute a government which is famous for its clean and efficient. Singapore has a developed complete system of economic laws and decrees, including traditional Banking Currency Act, Financial Companies Act, Company Law, Securities and Trading Futures Act, Bankruptcy Law, and the Public Trust Act, Business Registration Law and so on. The system of Taxation Laws have income tax laws and economic expansion incentive laws etc..

Cutting edge technology and high technology make Singapore the second ranked in the new world of competition statistics, behind the United States of America. Relevant laws and regulations have new Trademark Law, Patent Law and Patent Regulations and Copyright Tribunal Ordinance, and the Integrated Circuit Board Design Act, and the latest Electronic Transactions Act etc..

Many  talented  foreign people work in Singapore. There are Employment Act, Compensation Law, the Central Provident Fund Act (see < Code Bit > ) and Foreign Labor Laws about Employment Laws.

Singapore is a young country of immigrants, there are Immigration Act, the Societies Act, the Land Acquisition Act and Deed Registration Laws etc.relevant tosocial life and immigration.

Singapore is known as the garden city,mainly due to its perfect laws and regulations on environmental protection, including the regulations and laws about toxic substances toxic water pollution control and water regulation, plant control law, and environmental public health regulations.

The public canvisit the website of the office of the attorney general integrated computer system http://www.lawnet.com.sg It also provides detailed rules, regulations, laws and treaties and  English abstracts database.

Tax Rate

Singapore personal income tax rate is the lowest in the world. Income tax according to the progressive set, from revenue the initial $7500 2% to $400000 28%. Singapore has some tax provisions, including deduction in addition to support dependents fees, paid professional and academic course fees and insurance expenses. Holding a work permit, and live or working in Singapore for more than 183 days of foreigners have to pay personal income tax. The levying scope including all income earned in Singapore and all the money remitted, transferred and brought into Singapore. On the 60 day following short-term jobs, and the countries which has tax agreement with Singapore allowed duty-free. There are 36 countries have the tax agreement now.

 


Keyword: Singapore Investment

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