Why Singapore Is the Best Country for Business
The report, “Doing Business 2016: Measuring Regulatory Quality and Efficiency”, rated 189 economies in 10 separate areas of business regulations, including starting a business, permits, getting electricity, property registration, access to credit, and taxes.
Despite making no significant reforms, Singapore is once again the best country for business. Singapore is notable for its swift and transparent judicial system. The average commercial dispute takes just 150 days to resolve, the shortest turnaround worldwide. Moreover, since early last year, litigants and lawyers have been able to file cases, exchange documents, schedule hearings, and hold conferences entirely online.
A streamlined construction process also contributes to the city state’s favorable business climate. It takes only 26 days to get a construction permit in Singapore, the quickest proceedings of any country.
As Dr. Rita Ramalho, lead author of the Doing Business 2016 report explained, relatively simple and efficient legal procedures such as these do more than just support the businesses they regulate. “Countries with simpler business processes tend to have a higher level of firm creation and a higher level of job creation,” she said. In other words, when regulations allow entrepreneurs to function and be creative, the whole economy improves.
Business-related costs are also low in Singapore, due largely to the favorable regulatory climate. In Singapore, business owners are charged on average just 0.3% of their property’s value in construction-related fees, one of the lowest such compliance costs in the world. Business owners also pay an effective tax rate of just 18.4%, one of the lowest rates worldwide.
Wealth typically coincides with a supportive business environment, and while this is not always the case, Singapore residents are quite wealthy. Each resident earns $51,150 annually on average. By contrast, the United States has a gross national income (GNI) per capita of $55,200.
To identify the best and worst countries for business, 24/7 Wall St. reviewed the “Doing Business 2016: Measuring Regulatory Quality and Efficiency” report. We reviewed countries with the 10 highest and 10 lowest index values, or the “Distance to Frontier Score” — in the World Bank’s Doing Business 2016: report. The report evaluated the business climates in 189 national economies around the world based on 10 categories of business regulations. The cost of starting a business, which is expressed as a percentage of the gross national income (GNI) per capita, also came from the report. The total tax rate, which is the percentage of profits companies effectively pay in taxes, was also included in the report. Gross domestic product (GDP) per capita, and GDP growth came from the International Monetary Fund (IMF) and are as of the most recent period available.