May 13, 2015 – Singapore is a small island in Southeast Asia, but with a very strong economy. The country’s economy has been regarded as the most open in the world, trade oriented, and pro business with low corporate tax rates. It’s GDP in terms of PPP (purchasing power parity) of $91,388 in 2015 is ranked third in the world, which is just behind Qatar and Luxembourg.
Take a drive around residential districts in Singapore and you’ll find one in six houses belonging to a millionaire. In fact, according to a report by Boston Consulting Group, the country contains the highest percentage of millionaires in the world. The country’s uber wealthy population has grown exponentially with one in every 10 individuals having net worth of more than USD$100 million.
Most of the individuals have amassed great wealth due to Singapore’s highly successful and developed free market economy. The country’s revenue is highly dependent on exports, mainly IT products, pharmaceuticals, and consumer electronics. The financial sector also contributes a lot to the economy of the country.
Since gaining independence from the U.K. in 1963, the country’s economy has grown by leaps and bound. In 2010, the GDP of the country grew at a remarkable 15.2%, but averaged around 4% in 2011-2014 mainly due to soft demand of its exports on account of European recession.
Singapore has benefited the most from inward flow of FDI (Foreign Direct Investment) from global institutions and investors due to its investor friendly climate and stable political system. The government continues to make policies to attract major investment in medical technology, pharmaceuticals, and other key sectors so as to make Singapore a regional hub for high tech, financial and health care industries.
At present, the manufacturing and business services sector contributes the most to the economy. The economy of the Singapore is known as one of the most competitive, innovative, and efficient in the world. It trade-to-GDP ratio of 407.9% is one of the highest in the world signifying the importance of trade for the economy.
Singapore has one of the highest net foreign investments per capita. The country attracts increasing number of foreign investment due to low tax rates, advanced infrastructure, skilled workforce, and business friendly policies. There are about 7,000 multinational corporations operating in the country hailing from the U.S. Japan, and European countries. Around 1,500 Chinese and Indian companies have also set up their base in the country.
Recently, the country is also identified as a tax haven for wealthy individuals as well due to its extremely low income tax rate. The country secured fifth spot on the Tax Justice Network’s 2013 Finance Security Index on world’s top tax havens just ahead of the U.S.
Individual’s foreign-based income and capital gains are exempt from tax. Due to its generous tax policy for the wealthy, a number of high profile individuals have decided to reside in Singapore including Facebook co-founder and billionaire, Eduardo Saverin, and Australian millionaire retailer, Brett Blund.
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