Singapore's $2 business model

If you want to do business well -- and cheap -- contact Singapore. One can register a company in the island-nation online, at a cost of just Singapore $2 (around Rs 57).

The statistics of starting a business are extraordinary, especially when compared to the red tape in India. It takes just seven steps to start a business and exactly eight days to get going.

In contrast, a World Bank report says it takes 89 days to register a new business in India and 67 to register new property. Perhaps, a more relevant comparison will be with China where it takes 42 to days to start business. For Singapore' regional peers, it's 52 days.

The Bank report says Singapore is third in terms of ease of doing business, behind New Zealand and the United States.

What helps Singapore is its strategic location, which makes the Delhi-sized nation the hub for a market of 3 billion people. Around 7,000 global firms have offices here of which two-thirds have made it their regional base. Over 100,000 small and medium enterprises have set shop in the nation.

Even the taxes are less. Says Chua Taik Him, assistant managing director of Singapore Economic Development Board (EDB), the government body that facilitates foreign set-ups: "Singapore has the lowest corporate tax rate of 20 per cent in the region. It acts as a launchpad for companies seeking to tap the Asia-Pacific market." Indeed, the tax rate in Malaysia is 38 per cent and in China, 33 per cent.

Like the ease of registering, space is also not a constraint. Despite its relatively small size, Singapore has effectively managed its land resources through cluster parks. One success story is the biomedical cluster, christened the Biopolis.

Singapore offers world-class capabilities across the medical value chain, like basic R&D, product manufacturing and healthcare services. Almost all global biggies in pharmaceuticals and medical technology have a station in the Biopolis.

For the new entrepreneur in Singapore, there are readymade, plug-and-play container-like shacks to set up office. These offer seamless Internet access and server space, and state-of-the-art business centres.

Moreover, as the EDB says: "An attractive quality of life and rewarding career opportunities have attracted many top international talents to live, work, play and learn in this cosmopolitan city."

The government itself works like a corporate. There is no diktat of local authority like in Shanghai, and no underhand dealings. All processes are transparent.

Says NIIT's Asia-Pacific head, Arvind Mehrotra: "The Singapore government works like a stakeholder in the various firms operating from the country. Its mantra is co-creation."

The author was in Singapore recently at the invitation of Contact Singapore.