Emerging Markets : Focus on Singapore

Image: destination360

Singapore  formerly a British colony which became fully independent in 1965  with  approximately 5 million people with almost 60% Chinese. Singapore is one of the major hub for investments in the Asian pacific because of its cosmopolitan nature with different cultural background. Many foreigners find Singapore as their new home because of the peace and tranquillity and co existence of people of diverse culture and religion.

One of the reasons that makes Singapore to rise is the creation of Economic Development Board (EDB) which facilitated companies like HSBC, MAYBANK, ASCOTT to have their regional headquarters in Singapore. The general knowledge that economic growth solves social problem and the realisation of the small domestic market with the understanding that there is no natural resources to rely on made Singapore government to invest in its people to have the required knowledge am be able to compete well with the foreigners.

The government created possibilities for export by opening up its borders for foreign direct Investment unlike other countries they have always been outward looking.

Singapore Stats:

Ranking	Quality of Life	Economic Activity
1	London	London
2	Singapore	New York
3	New York	Hong Kong
4	Geneva	Shanghai
5	Sydney	Singapore
6	Hong Kong	Beijing
7	Paris	Dubai
8	Vancouver	Paris
9	Miami	Tokyo
10	Dubai	Frankfurt

Figure 1:  Quality of life

Ranking	Data 2010	$ US	Expected 2050	$ US
1	Singapore	56,532	Singapore	137,710
2	Norway	51,226	Hong Kong	116,639
3	US	45,511	Taiwan	114,093
4	Hong Kong	45,301	South Korea	107,752
5	Switzerland	42,470	US	100,802
6	Netherlands	40,736	Saudi Arabia	98,311
7	Australia	40,525	Canada	96,375
8	Austria	39,073	UK	91,130
9	Canada	38,640	Switzerland	90,956
10	Sweden	36,438	Austria	90,158

Figure 2: GDP Per Capita (2010 PPP US$ )

( Figure 1& 2 according to The Wealth Report 2012 published by Knight Frank and Citi Private Bank)

The Attractions:

The above stats might give you small indication about the growth and prospect of Singapore. Let us look at some of the attractions

Closeness to China: Singapore's closes to China which is the second largest economy in the world has definitely impacted on her growth  going by this shows a direct relationship between the two economies.

Free trade: Singapore government has always been one of  the foremost advocate for free trade and this preaching is paying off on the level of influx of foreign companies. Singapore has the busiest port in the world. it is also a key factor in its economic development.

Tax advantages: Singapore opened up its borders by allowing Investors and companies to benefit from the double taxation agreements with other nations. Start ups can gain tax advantage for the first 3 years if certain conditions are met. Angel Investors Tax Deduction Scheme (AITD) this like (venture capital) will also enjoy 50% tax deduction when they invest in start-up companies

Real Estate : The property business is booming with the abundant opportunities and also the policy that allows investors to own property in their name which is not common in the Asian-pacific.

Low Business cost: Investors are drawing towards Singapore also because of the low cost of doing business which is evident when the World bank ranks the country as the world's easiest place to do business in its report (Doing Business 2011 report). It takes just two procedures to register a company in Singapore with maximum of two days timeline.

The challenges:

The multi cultural divide might be used to disrupt the economy by some politician when they fill threatening. There are also barriers for foreign companies to operate in some sectors like legal services.