CEO memo on starting a business enterprise in Singapore

Singapore is a small Asian state that has made tremendous progress in the last decades in economic and financial terms and is one of the most attractive countries to invest in. The government has strongly promoted an administrative model with reduced governmental involvement, liberalizing sectors and encouraging foreign investments. As a consequence, the country scores highly in all or most of the reports that analyze the ease of doing business.

Singapore is also becoming an important regional hub. As a consequence, starting an enterprise in this country can also be made considering the potential impact in the medium and long-term in the development of the company in other Asian markets. The Asian region is estimated to continue its economic growth in the next period of time, so it would be important to establish a presence there as soon as possible and with long-term implications. Singapore would be a good location to initiate this process.

The primary element that is presented in this memo is the ease of doing business indicator, as the best instrument that reflects the capacity of the authorities of Singapore to establish an economic and investing climate that encourages entrepreneurship and, as such, favors our own company.

The International Financial Corporation (IFC) elaborates an annual ease of doing business index, ranking economies from 1 to 185 (Ease of Doing Business Report, 2012). The report covers ten topics that are important in doing business, including starting a business, registering property, protecting investors and paying taxes.

Singapore has consistently scored high not only in the overall score (number 1 in both 2011 and 2012), but also in each of the ten topics that are taken into consideration for the index. Thus, it scored number 1 in one category (trading across borders) and number 2 in three other categories (dealing with construction permits, protecting investors, resolving insolvency). Several of the topics that would be of particular interest for a new business venture, like starting a business, protecting investors, paying taxes and getting credit, have obtained a high ranking.

The country is also one of the least corrupt in the world, according to the Corruption Perception Index, something essential for the success of a new business in a country. It ranks number two, after Hong Kong, in an Index of Economic Freedom. All these show the continuous policy of the country's authorities towards encouraging foreign business, investment and trade.

There are additional arguments in favor of beginning a business enterprise in Singapore. The country benefits from a political system that, although not fully respecting human rights principles, is very stable. The absence of some of the characteristics of a fully functional democracy, including the government's authority in media matters, is not something that would affect a new business: as previously described, the authorities of Singapore have undertaken significant efforts to ensure that the business climate is the best in the world in encouraging new business.

The judicial system in place, similarly, was created to protect and encourage investors. A survey undertaken with international business executives in 2008 showed that Singapore, along with Hong Kong, had the best judicial system in the world (Agence France Presse, 2008). This means that there are no potential legal risks for the business as it expands on this market.

The country also benefits from a highly educated workforce, either local or from the expat community. The educational system in place in Singapore, supported financially by the state, has produced students who consistently rank very high in different international science and mathematics tests and general assessments.