Multinational corporations (MNCs) have long favoured Singapore and/or Hong Kong to establish their Asia regional or global headquarters (HQ). While both countries continue to attract investments from MNCs across various industries, Singapore’s reputation as a gateway to the rest of Asia is gaining strength. Moreover, Singapore’s resilience in managing the pandemic has paved the way for MNCs to push forward plans to improve their accessibility to Asian markets as these markets are making steady progress towards economic recovery.
Leverage on the myriad of opportunities in Asia
According to Singapore Economic Development Board (EDB), the Asian region will make up more than half of the world’s middle class population and form the bulk of demand for consumer goods by 2030. MNCs looking to strengthen their presence in Asia may want to consider Singapore as a hub for research and development (R&D) so as to build consumer insights and develop product strategies.
An example of this would be Dyson which have opened its new global HQ in Singapore. The opening of its new global HQ marks an exciting new chapter in Dyson's continued growth, and will sit at the center of its ambitions to enter into new fields of research and develop a new generation of high-performing technology products with increasing intelligence. Aside from Dyson, 46% of Asia regional HQs are located in SIngapore with technology MNCs accounting for 59% from that figure. Thus, Asia is set to be the leading engine for global growth.
Why Singapore?
Singapore is the preferred choice for an Asia regional HQ due to a variety of reasons such as its strategic location, advanced telecommunications and financial infrastructure, highly qualified human capital pool, efficient business and stable political environment with business friendly tax policies.
One of the many advantages of selecting Singapore as a HQ location is the flexibility of having a centralised operating model. MNCs need to dedicate market-focused resources to be able to react promptly to evolving market dynamics. By adopting this “centralization” model, it gives MNCs the agility in the beginning of market expansion, thus enabling them to efficiently allocate resources in order to drive innovation and business growth.
Incentives for HQ set-up
EDB offers regional and global HQs incentives to encourage MNCs to relocate their HQs to Singapore. MNCs that set up their regional HQs in Singapore will enjoy a concessionary tax rate of 15% for up to 5 years for qualifying income arising from HQ activities and operations carried out in Singapore. Those that set-up global HQs will enjoy a further attractive tax rate of 0 - 10%.
To further convince MNCs, Regional HQs that use Singapore as an international intellectual property (IP) holding location may claim writing down allowance for the cost of acquisition of the IP. Another incentive is, HQs based in Singapore can repatriate dividends from their directly-held foreign subsidiaries to Singapore, tax-free. These incentives are non-exhaustive.
Global Trader Programme (GTP)
To further incentivise MNCs to choose Singapore as their preferred regional trading base, this programme administered by Enterprise Singapore allows companies to enjoy a reduced tax rate of 5% or 10% on qualifying trading income for three or five years. To qualify for this scheme, the company must be well established with substantial operations in Singapore and meet stringent quantitative criteria.
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Conclusion
Situated at the heart of Asia, Singapore’s proximity to the fastest growing markets in the world, enhanced connectivity and infrastructure, and constantly upgrading its ecosystem to further amplify its role as a global services hub, makes it a suitable candidate for regional/global HQ location for any company.
According to Singapore Economic Development Board (EDB), the Asian region will make up more than half of the world’s middle class population and form the bulk of demand for consumer goods by 2030. MNCs looking to strengthen their presence in Asia may want to consider Singapore as a hub for research and development (R&D) so as to build consumer insights and develop product strategies.
An example of this would be Dyson which have opened its new global HQ in Singapore. The opening of its new global HQ marks an exciting new chapter in Dyson's continued growth, and will sit at the center of its ambitions to enter into new fields of research and develop a new generation of high-performing technology products with increasing intelligence. Aside from Dyson, 46% of Asia regional HQs are located in SIngapore with technology MNCs accounting for 59% from that figure. Thus, Asia is set to be the leading engine for global growth.
Why Singapore?
Singapore is the preferred choice for an Asia regional HQ due to a variety of reasons such as its strategic location, advanced telecommunications and financial infrastructure, highly qualified human capital pool, efficient business and stable political environment with business friendly tax policies.
One of the many advantages of selecting Singapore as a HQ location is the flexibility of having a centralised operating model. MNCs need to dedicate market-focused resources to be able to react promptly to evolving market dynamics. By adopting this “centralization” model, it gives MNCs the agility in the beginning of market expansion, thus enabling them to efficiently allocate resources in order to drive innovation and business growth.
Incentives for HQ set-up
EDB offers regional and global HQs incentives to encourage MNCs to relocate their HQs to Singapore. MNCs that set up their regional HQs in Singapore will enjoy a concessionary tax rate of 15% for up to 5 years for qualifying income arising from HQ activities and operations carried out in Singapore. Those that set-up global HQs will enjoy a further attractive tax rate of 0 - 10%.
To further convince MNCs, Regional HQs that use Singapore as an international intellectual property (IP) holding location may claim writing down allowance for the cost of acquisition of the IP. Another incentive is, HQs based in Singapore can repatriate dividends from their directly-held foreign subsidiaries to Singapore, tax-free. These incentives are non-exhaustive.
Global Trader Programme (GTP)
To further incentivise MNCs to choose Singapore as their preferred regional trading base, this programme administered by Enterprise Singapore allows companies to enjoy a reduced tax rate of 5% or 10% on qualifying trading income for three or five years. To qualify for this scheme, the company must be well established with substantial operations in Singapore and meet stringent quantitative criteria.
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Conclusion
Situated at the heart of Asia, Singapore’s proximity to the fastest growing markets in the world, enhanced connectivity and infrastructure, and constantly upgrading its ecosystem to further amplify its role as a global services hub, makes it a suitable candidate for regional/global HQ location for any company.
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