Singapore has in many ways been at the top of the world whether it is in entertainment, governance, and tourism. But one of the most remarkable things about Singapore is that it is commonly known as a financial hub not only within the region but across the world as well.
World’s top financial center
What makes this so remarkable is the fact that Singapore has become the top three financial hubs in the world in a matter of fifty years. This means that Singapore is just behind London and New York in terms of this ranking. It must be noted that in recent years, Singapore has overtaken the likes of Hong Kong as the top financial hub of Asia.
Why is Singapore a financial hub?
What makes Singapore a financial hub and vibrant market is it is considered one of the most competitive markets globally. This is where Singapore is considered one of the most attractive markets to go among investors and financiers around the world. The numbers do not lie. Deloitte ranked Singapore as the 6th in the top wealth management centers in the world while Singapore has been ranked second in PWC’s Opportunity Index. With the two top audit companies giving such rankings, it is not surprising that Singapore could well be on its way to becoming the top financial hub someday.
Singapore offers financial institutions a pro-business and cost-competitive environment, excellent infrastructure, and a highly skilled and cosmopolitan labor force. Find out what makes Singapore a leading global financial center.
Which Singapore industries drive the economy?
Singapore’s largest industry by far is the manufacturing sector, which contributes 20%-25% of the country’s annual GDP. Key industry clusters in Singapore’s manufacturing include electronics, chemicals, biomedical sciences, logistics, and transport engineering. In the third quarter of 2017, the manufacturing sector grew by 35%, with clusters like electronics and precision engineering benefiting from high demand.
Close behind Singapore’s manufacturing industry is its financial services industry, which has enjoyed stable growth due to Singapore’s pro-business environment and political stability. Home to over 200 banks and a regional hub of choice for many global financial services firms, Singapore’s financial services marketplace facilitates the transfer of knowledge, processes, technology, and skills between global, regional, and domestic markets. Other emerging industries that are making significant contributions to Singapore’s economy include medical technology, aerospace engineering, clean energy, healthcare, and content development.
What makes Singapore such an attractive market?
The most significant factor that makes Singapore such an attractive market is its location. Strategically located along the trade lines and protected geographically, the country is small enough to be easily managed. This can be dated back to 1819 when the East India Company was formed here where Singapore was the major port between Britain and India.
This has continued to flourish to the present day where financial services continue to be linked through the trade lines. Because economic activities have actively participated here, insurance and banking followed suit. Another factor that attracts investors here is that the major languages used here are English Language and Mandarin. This makes it a perfect place for foreign direct investments and companies to set up their companies in the country.
Taxation in Singapore
Because of its stature as a proportion financial hub and taxation becomes a major influence, Each year, individuals pay their income tax which is based on a progressive tax system. It is considered among the most competitive markets in the world in terms of individual income tax. This ranges between 0 and 22%. On the other hand, corporate income tax is applicable as well. This is paid on an annual basis.
Doing business in Singapore
According to the World Bank, doing business in Singapore is extremely easy. It is ranked second in the world by its rankings. With a slightly more than 5 million population, Singapore has surpassed most countries in the world when it comes to setting up a business and investments in the country.
The current scenario
The Global Financial Centres Index ranking has put Singapore as the third most dynamic financial center in the world. Another factor that enhances Singapore’s standings is its readiness to embrace new and more contemporary markets. This means platforms like fintech and blockchain technology have become quite the order of the day here. Such a scenario puts Singapore on par with being among many of the top financial centers like New York. Such is the case that Singapore is now a major hub for cryptocurrency trading in Asia.
Meanwhile, Singapore has a lot of potential and depth when it comes to capital markets. On the Stock Exchange of Singapore, about 800 companies are registered and trading actively. Such is the chain reaction that the Singaporean currency has grown by leaps and bounds and is being regarded as among the most stable in the world over.
In terms of banking, there are now over 120 banks operating in Singapore. Among them, 5 are locally owned of which 2 of them are among the top banks in the world. In terms of numbers, there are now about SGD2.5 trillion in asset management companies with a steady growth of about 10%. Meanwhile, there are more than 250 assets and fund management companies here.
The Interesting story!
There is one part of Singapore you won’t want to miss is the financial district. A place that symbolized the wealth in Singapore, called The Fountain of Wealth was built in Singapore in 1995 during the development of the country. It is located in the basement of Suntec City, which is in the center of office buildings. It is built the bronze ring measures a staggering 21 meters in diameter and is supported on four sides by 13.8 meter-tall bronze pillars. The entire fountain covers an area of nearly 1,700 square meters which led to it being listed in the 1998 Guinness Book of Records as the World’s Largest Fountain.
Suntec City was designed following the principles of Chinese geomancy or feng shui. The Fountain of Wealth sits at the center of five office blocks that are meant to represent a hand coming out of the ground. The Fountain of Wealth appears as a gold ring in the palm of the hand symbolizing the preservation of wealth. The combination of these structures strives to create harmony and, through that, the good fortune of the many people who work there.
Water is one of the most powerful elements of nature according to the Chinese because as a source of energy it symbolizes wealth and good fortune. For this reason, the water at the Fountain of Wealth flows inwards, representing money rolling in instead of going out. During specific periods, the fountain is switched off and this gives visitors a chance to walk around the smaller fountain located at the center of The Fountain of Wealth. Here, visitors can collect coins that are believed to possess charm and good luck. For Good fortune, The visitors are recommended to walk around the fountain three times in a clockwise direction, while touching the cooling waters together with a blessing. It has such positive energy that just standing near it and breathing in the “chi” that is emitted and even touching the lucky water can enhance your well-being.
By Ashley Jones