Singapore: Singapore is the best place in the world to do business and Libya the worst, according to a survey of 82 countries by the Economist Intelligence Unit, which has the tiny Asian city-state leading the rankings for a seventh year in a row.
The EIU said Singapore, which has no economic hinterland of its own, had secured the top slot “due to its efficient, open economy that works hard to maintain its competitiveness as a regional hub for global businesses”.
Switzerland came second, while the US was seventh, Hong Kong fourth and Britain 21st. China was placed 50th, while Russia came 64th. The EIU said: “The Bric economies, though attractive because of their size, are hard places to do business.”
Singapore continues to be a magnet for foreign companies because of its relatively low corporate tax rate of about 17 per cent, extensive legal and business services, and the fact that it is largely corruption-free.
This year ExxonMobilmade a $6bn investment in the expansion of a petrochemicals complex in Singapore. It was the largest single foreign investment in the nation’s almost 50-year history.
Singapore has also benefited from being largely pollution-free — in contrast to Beiijing, Shanghai and Hong Kong. It was judged best expatriate destination after Switzerland in a survey by HSBC last month, which revealed that 86 per cent of respondents felt Singapore was “a safer place to raise a child than their home country”.
The EIU finding comes as Singapore is becoming more of a regional hub for companies wanting to tap into the fast-growing economies of the Association of Southeast Asian Nations.
In 2013, the five biggest economies in Southeast Asia received $1.3tn in foreign investment, outstripping commitments into China for the first time, according to Singapore’s trade ministry.
Philips, the Dutch consumer electronics and health care equipment group, two months ago revealed plans for a new regional headquarters based in Singapore to be completed by 2016.
Multinationals have also started to open offices in Singapore to serve the wider Asia region, in some cases encompassing their Middle East operations as well.
Archer Daniels Midland in September moved its regional Asia headquarters to Singapore from China, while General Motors in August shifted the bulk of its non-Chinese international operations from Shanghai to a new regional office in Singapore that will also oversee India, Africa and the Middle East.
Yeoh Keat Chuan, managing director at the Economic Development Board, a government body responsible for attracting inward investment into Singapore, said: “The role that we have played in the past is as the host for manufacturing activities, and sales and services for regional offices. We have had a shift in that role from host to ‘home’ over the past five years, and that is related to companies requiring a substantive home base in Asia because of the growth of the Asian market,” he said.
However, the EIU survey made no mention of the increased difficulty that some foreign companies have had hiring non-Singaporeans this year for some roles after the government introduced a policy to encourage employment of local people.
In coming up with its rankings, the EIU examined 10 aspects of the business environment, including politics; macroeconomics; market opportunities; policy towards free enterprise and competition; taxes; the labour market; and infrastructure.
— Financial Times
