Why Singapore is one of the best cities for startups

Dr Biz • September 4, 2020

Some of the best cities for startups know exactly who they are, and how they want to grow and develop. This is why Singapore consistently comes out on top as a location for startups. A fast moving, forward thinking destination with its eye on becoming a digital leader since 2014, Singapore is one of the most dynamic places for startups in the world. Infact, last year Singapore ranked as one of the top ten startup cities in the world, joining destinations including San Francisco, home of Silicon Valley, as well as New York, Shanghai and London. Moreover, Singapore was named the most hospitable city for female entrepreneurs in Asia. All in all, the city state has a lot going for it!

Strong government support

One of the biggest drivers of Singapore’s startup success is the strong and consistent support shown by the government, which offers a plethora of training and funding opportunities to startups in the city state. Programs range from startup incubators that put entrepreneurs in touch with world-class contacts and investors, to extensive grant packages for innovative digital startups, to helping businesses to go digital and upskill their workforce. Responding to the current crisis, the government has also doubled down on this support, pledging millions more for startup programmes. Check out Startup.sg and Enterprise Singapore for more details.

Easy to incorporate

Singapore is one of the best cities for startups not least thanks to the fact it is one of the easiest places to register a business, with the incorporation process taking just a few days. It is also particularly friendly to foreign owned businesses who can register their business and obtain a business visa with far less paperwork and expense than other countries (providing they are able to employ Singaporeans). There remain, however, a few hoops to jump through - including needing to appoint a company secretary within six months - and so it always pays to have a local expert on-hand. Dr Biz offers a range of professional services to startups, including incorporation.

Lots of funding

Along with numerous funding options from the government, Singapore is also a hotspot for private investment in startups. Such is the supportive environment that there are more jobs for software engineers at startups in Singapore than there are to fill them! In 2019, Singapore cemented its reputation as one of the best cities for startups by levels of investment when it announced that early stage companies in the city had raised 50% more funding than they expected, with levels topping S$15 billion. An active VC sector is a key contributor, with some of the biggest funds including Golden Gate Ventures, Sequoia Capital, Saison Capital and FutureLabs - among many, many more.

Inspiring colleagues

When launching your own business, especially in today’s fast paced, highly competitive marketplace, it matters who you have around you. This is why new businesses tend to flock to the best cities for startups: to be among inspiring people with the same drive and passion. This is particularly true for tech startups, and why San Francisco's ‘Silicon Valley’ has become an iconic destination for all things digital. Singapore, however, boasts some of Asia’s most well known digital startups, including Grab, Lazada and Sea - which together have raised more than S$12 billion in funding - as well as PropertyGuru, Ninja Van and leading cryptocurrency exchanges TenX and KyberNetwork.

Competitive taxation

A big factor that makes Singapore one of the best cities for startups is its highly attractive corporate tax regime. For the first three years of operation, startups incorporated in Singapore pay tax on just one quarter (25%) of their income up to $100,000, and then on half (50%) of their further income up to $200,000. This means that a startup would pay taxes on just $75,000 of a $200,000 income. Singapore also only charges taxes on profits - not revenue - at a flat rate of 17%. In addition, the city state does not levy any capital gains tax on the sale of a business - a huge bonus compared to jurisdictions including the US, China, UK and Europe. Singapore also has a comprehensive double taxation exemption which helps businesses to avoid paying tax in more than one country, while some foreign income is exempt altogether.

Legal protections

As any new business owner will tell you, particularly those with innovative products and services, being able to protect your intellectual property and defend against legal challenges are hugely important factors when launching a startup. Again, Singapore comes out as one of the best cities for startups in this regard. Intellectual property is vigorously defended through the IP Hub Master Plan, a government initiative that provides a robust framework for trademark, patent and copyright protections. Moreover, corruption in the country is extremely low, with Transparency International ranking Singapore as the fourth least corrupt country in the world (tying with Switzerland and Sweden), and is the only Asian country to rank in the top 10.

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