Singapore, second in economic freedom

Sept. 22, 2010 - PRLog -- First the Heritage Foundation's 'Index of Economic Freedom' and now Canada-based Fraser Institute's 'Economic Freedom of the World Index'. For a second time this year Singapore has been awarded the title of 'Second Freest Economy in the World', adding to the city-state's impressive performance in business and economic rankings this year.

From a sleepy fishing village to one of the world's most competitive economies, Singapore has undergone a remarkable transformation thanks to its strong fundamentals - an open and flexible trade policy based on the laissez faire principle. The cornerstone of Singapore's free market economy lies in its trade freedom, business freedom, investment freedom, labor market flexibility and legal structure.

According to Fraser's Economic Freedom Index, Singapore scored a perfect 10 on 10 for its income tax rate, freedom to own foreign currency, taxes on international trade, ownership of banks, private sector credit, interest rate controls, hiring regulations and minimum wage. It also scored highly for IPR protection, minimum international trade barriers, ease of starting a business, minimal business licensing restrictions, and low cost of tax compliance.

If one were to analyze Singapore's business and trade policies it is evident that the country imposes very low barriers on foreign investment, very low levels of restrictions in the banking and finance sector, low intervention in setting wages, and a low level of business regulation. For instance foreign businesses are treated on an equal footing as domestic businesses. Foreign entrepreneurs who wish to form a Singapore company (http://www.guidemesingapore.com/business/c649-singapore-c...) are free to do so without the need to seek government approval. There are no restrictions on the fields of business activity open to foreigners and foreign owners can have 100% shareholding in a Singapore company. A business can be set up with ease as the timeline for Singapore company incorporation is just 24 hours, with only few businesses requiring licenses. Ever since the liberalization of the banking sector in the late nineties, the banking and financial sector has grown stronger. A strong IPR protection regime has made the country an attractive base for foreign R&D firms. Singapore's tax rates (http://www.guidemesingapore.com/tax/c648-singapore-tax-ra...) are one of the lowest in the region with no exchange controls or restrictions on repatriation of profits.

According to Mr. Samir Gosh – a senior team member at Janus Corporate Solutions, "Singapore is the perfect model of a free market economy. Openness has led to a healthy competitive environment, which in turn boosts productivity. Singapore is almost like another Hong Kong, operating on the laissez faire economic policy. There is little government intervention in the economic decisions of businesses and this is a huge draw for foreign companies. Today there are as many as over 700 MNCs in Singapore and their numbers are growing."

Singapore's ranking as the second freest economy in the world certainly adds to the country's investment friendly climate and will continue to play a major role in its economic growth.

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