Relocating a business overseas is a good opportunity for expansion or to explore new markets. As Covid-19 restrictions ease, several countries are reopening, with their borders resuming international mobility. Companies are now focusing their business strategies on seizing emerging opportunities in the pandemic as well as in the post-Covid-19 recovery. Now that return-to-office and hybrid work are in motion, it is also a favourable chance to finally relocate your business and set-up an office anywhere in the world. Deciding to move your business overseas takes a lot of careful planning and weighing the pros and cons. It involves identifying your key reasons for relocating— are you planning to set-up a subsidiary? Do you want to access untapped markets in another country? Or capitalise on attractive government incentive policies and tax breaks for foreign investors? It also takes careful research to know the advantages it can bring to your whole business:
- You can raise your brand’s presence in the local business community
- You ca be closer to your customer base
- You can have access to a specialised pool of potential employees
- You can have low operation costs and improve your cash flow
- You and your existing employees can have a better quality of life
Once you’ve identified your key reasons for moving your business, the next step is to know which country to set up shop. In the Asia-Pacific region, Singapore is one of the prime country and city destinations to start or relocate a business. With a population of 5.70 million, Singapore has a GDP of $340 billion in 2020. The country currently ranks number 1 in the 2022 Index of Economics Freedom, an annual ranking of the economic freedom of 184 countries based on business, labour, monetary, trade, and investment freedom among others. It has a positive commercial environment that attracts international businesses due to its friendly legal and tax structures, reputable infrastructure, and reliable regulatory processes. To further illustrate Singapore’s impressive profile, let’s look at the top factors why relocating to this island-country is good for your business.
Why Singapore is a good country to relocate your business
It is a strategic location for Asian trade
Singapore has a vibrant financial centre that attracts top global businesses across all industries. This is due to the city-state’s close proximity to emerging and strong markets such as India, Malaysia, Indonesia and China. As a former British colony, it is a melting pot of east and west cultures, with a strong influence by the UK and the U.S. in its legal and financial structures. Moreover, Singapore is situated in the Straits of Malacca, one of the world’s busiest shipping canals, which further links the country to the Middle East and European economies.
It has a strong Intellectual Property protection
Singapore ranked third place in the world, next to Finland and Switzerland, for best Intellectual Property protection by the World Economic Forum in 2018. This is important for businesses for the protection of their innovative products and services. Having a trademark or patent in the product gives the company a competitive edge and a distinguishing factor over competitors in the market.
It has an extensive network of trade agreements
Singapore has multiple free trade agreements (FTA) with 27 economies and ongoing FTA negotiations with other countries. The FTAs ensure steady business and trading transactions across borders and minimise the tax barriers. This is encouraging for companies especially to firms who are looking to expand their operations globally.
It has a pro-business economy
Singapore’s government is known for supporting local start-up initiatives and connecting them to global networks. The city-state’s strong local business community is a favourable environment that has a well-developed infrastructure and high innovation performance. There are over a hundred commercial banks and capital markets with strong trades and investments, which makes it more engaging for entrepreneurs to grow their business.
It has a progressive tax framework and foreign income exemption
Singapore’s progressive tax structure is based on territorial policy. Income generated within the country is taxed and foreign-sourced remitted income is exempted. The marginal rate for Singapore personal tax ranges from 0 to 22%, and allows individuals to apply for various reliefs and lower their payments.
Renting an office space in Singapore
After learning all the essential information that you need for relocating to Singapore, the next big step is to look for an office space to set-up your headquarters. By far, this will be the most challenging and all-consuming process because you need to prepare your financial resources, decide which region or location you want to establish your office, how much space you need, and whether your lease duration aligns with your present and future business goals.
Here are 4 important tips that you need to know when searching for an office space in Singapore:
Hire a commercial property agent
Hiring the expertise of a commercial property agent lessens the strain of searching for an office space, managing the paperwork, communicating with the landlord, and other technical details. Moreover, they have a better knowledge of the properties that are available around Singapore as well as the estimates and requirements that you need for setting-up your office. More importantly, they will guide you throughout the process especially with understanding the tenancy lease agreement and other legal documents before you sign them.
Finding the right location
With the help of a property agent, they’ll give you the best office space options that you prefer. Some of the well-known and prime office space locations in Singapore are in the Central Business District, Harbourfront, Changi Business Park, and the Marina Centre. Additionally, look for places that have easy access to public transportation and nearby amenities such as banks, restaurants, shopping centres, etc.
Identifying the office size you need
There are two important things to remember when considering the size of your office space: the size of your team and your business needs. To give you a better idea, a team with 5-10 employees need a minimum space of 350-700 square feet and 20-30 employees need 1,050-2100 square feet of space. You will need a bigger space if you’re looking into hosting business meetings in a conference room or a separate area to invite your clients. Estimate the measurement of the furniture and appliances such as desks, chairs, drawers, and air conditioning units, and if you’re adding any other large equipment in the office.
You should have already estimated the monthly overhead cost of your business— such as rent, insurance, utilities, repair and maintenance, and administrative costs among others, and have allotted the budget to manage its operation. Landlords usually require a 1-month advance rent and 2-3 months security deposit. Your budget must also include a budget for a potential increase in rent where a landlord reserves the right to adjust the lease term when necessary.
The lease duration for office rental in Singapore is 2-3 years. When your lease period expires, the option to renew is always available. However, keep in mind that the rental rate will be adjusted according to the current market price when you renew your lease.
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