Singapore has in many ways been at the top of the world whether it is entertainment, governance and tourism. But one of the most remarkable thing about Singapore is that it is commonly known as a financial hub not only within the region but across the world as well.
World’s top financial centre
What makes this so remarkable is the fact that Singapore has become the top three financial hubs in the world in a matter of fifty years. This means that Singapore is just behind London and New York in terms of this ranking. It must be noted that in recent years, Singapore has overtaken the likes of Hong Kong as the top financial hub of Asia.
Why is Singapore a financial hub?
What makes Singapore a financial hub and vibrant market is it is considered as one of the most competitive markets globally. This is where Singapore is considered as one of the most attractive markets to go among investors and financiers around the world. The numbers do not lie. Deloitte ranked Singapore as the 6th in the top wealth management centres in the world while Singapore has been ranked second in PWC’s Opportunity Index. With the two top audit companies giving such rankings, it is not surprising that Singapore could well be on its way to become the top financial hub someday.
What makes Singapore such an attractive market?
The most significant factor that makes Singapore such an attractive market is its location. Strategically located along the trade lines and protected geographically, the country is small enough to be easily managed. This can be dated back to 1819 when the East India Company was formed here where Singapore was the major port between Britain and India.
This has continued to flourished to present day where financial services continue to be linked through the trade lines. Because economic activities are actively participated here, insurance and banking followed suit. Another factor that attracts investors here is that the major languages used here is English Language and Mandarin. This makes it a perfect place for foreign direct investments and companies to set up their companies in the country.
Taxation in Singapore
Because of its stature as a prominent financial hub, taxation becomes a major influence. Each year, individuals pay their income tax which is based on a progressive tax system. It is considered as among the most competitive markets in the world in terms of individual income tax. This ranges between 0 and 22%. On the other hand, corporate income tax is applicable as well. This is paid on an annual basis .
Doing business in Singapore
According to the World Bank, doing business in Singapore is extremely easy. In fact, it is ranked second in the world by its rankings. With slightly more than 5 million population, Singapore has surpassed most countries in the world when it comes to setting up a business and investment in the country.
The current scenario
The Global Financial Centres Index ranking has put Singapore as the third most dynamic financial centres in the world. Another factor that enhances Singapore’s standings is its readiness to embrace new and more contemporary markets. This means platforms like fintech and blockchains technology have become quite the order of the day here. Such a scenario puts Singapore on par with among the top financial centres like New York. Such is the case that Singapore is now a major hub for cryptocurrency trading in Asia.
Meanwhile, Singapore has a lot of potential and depth when it comes to capital markets. In the Stock Exchange of Singapore, about 800 companies are registered and trading actively. Such is the chain reaction that the Singaporean currency has grown by leaps and bounds and is being regarded as among the most stable in the world over.
In terms of banking, there are now over 120 banks operating in Singapore. Among them, 5 are locally owned of which 2 of them are among the top banks in the world. In terms of numbers, there are now about SGD2.5 trillion in asset management companies with a steady growth of about 10%. Meanwhile, there are more than 250 assets and fund management companies here.