Nowadays every young entrepreneur has a unique seed of an idea in their pockets that they are ready to plant. All they need is a developed market which shall provide them with the advanced resources at affordable costs. Indian youngsters have not stayed untouched from such mentality as well. We Indians may not be the no. 1 in every field but we do try our best to mark our presence across the globe. However, the Indian land doesn’t seem to have a soft corner for the startups yet. Maybe that is why Indian entrepreneurs find it easier to start their businesses in foreign nations. Among the many nations that have attracted the “Indian Baniya” minds, Singapore stands at the top. Well, there are reasons for that too.
Here are some main reasons why Indian Startups prefer Singapore to register their business:
- For registering a startup in India, you will have to make multiple visits to the local authority & respective license offices. This, in general, takes 30 to 35 days for obtaining a registration and that too after following a long 13 to 15 Step Procedure Plan. However, as suggested by World Bank’s “Doing Business Report”, in Singapore, procedures take merely 2 to 3 days & only 3 simple steps to obtain registration for a new startup.
- As per the World Economic Forum’s latest “Global Competitiveness Report”, out of 144 countries around the world, Singapore ranks 2nd when it comes to fostering new businesses. India ranks 60th. The main reason behind this is that the government of Singapore supports innovation and entrepreneurial behaviour. They aim to establish a smart nation that can fight the problem of the ageing population.
- The diseased economic factor of corruption also plays a vital role in the administration and processing of business. As per a report of Trading Economics in 2018, India ranks 78th as compared to Singapore being the 3rd in the list of “Least Corrupted Countries”. All the businesses have to come across various scenarios and the more corrupt the system is, the more difficult it becomes to deal with them.
- The revenue of Singapore provides new start-ups with a great chunk of tax exemptions. Further, the established businesses have only to pay 17% flat tax rates. The tax slab exempts the startups for the first three years from tax up to SGD 1,00,000. And any income above SGD 1,00,000 is chargeable at very low rates. Whereas in India, any business start-up will have to pay a 30% flat tax on any profits they make. Although Indian Revenue System is trying to give perks to new startups by way of deductions and exemptions, however, they are not as effective and direct as Singapore.
- Startups don’t run on paper-based plan. They need an effective workforce to materialise their goals. India, instead of being the 2nd ranking country in population, its human resource lacks the talent, skills and knowledge in some manner. Hence, enthusiast entrepreneurs prefer countries having skilled manpower to pursue ease of doing business. Also, the unhealthy competitive tactics of Indian businesses lead the skilled workforce in diverse directions yielding zero benefits the workforce and to themselves.
- The financial system of Singapore allows businesses to get financial borrowings at 1.7% to 2.0%. The rates of interest on loans in India ranges from 9.5% to 12.5%. This makes it much easier for the entrepreneurs to choose, where to start their businesses.
- Singapore has resources and markets that serve businesses with a stage to test perform their products and services. It is advanced in terms of technology, network, human resource and many other factors making it a business-friendly location.