Corporations favour closeness to markets
SINGAPORE continues to be the leading and logical choice as a headquarters location for multinational corporations.
Surveys conducted by top research organisations and business publications show Singapore's consistent high ranking as an international business location in the Asia Pacific.
For example, a survey conducted by the Far Eastern Economic Review in June last year showed that 66 per cent of chief executives interviewed preferred Singapore as their head office location.
In a recent Business International survey, major multinationals were asked to rank 12 key factors affecting their choice of an Asia-Pacific regional headquarters.
Singapore was cited as a top choice for its proficiency in English, closeness to market location, political stability, excellent infrastructure, active government support and incentives, sourcing and investment opportunities and cost competitiveness.
The survey also noted that the Singapore work force was ''well-trained, reliable and hard working'', and that industrial strikes and other disputes were virtually unknown.
These factors have been cited repeatedly in other assessments of Singapore. They reflect the high level of confidence among the international business community regarding Singapore as a value-added headquarters location in the Asia-Pacific.
This confidence is reinforced by the attractive packages of incentives and benefits awarded to multinational companies under the operational headquarters and business headquarter programmes.
The package of incentives offers different levels of tax concessions on offshore income derived from the provision of services, based on companies' activities. These include market planning, business development, training, finance and treasury control, technical support, information systems design, logistics management, procurement and other value-added services.
Companies which manage an extensive network of operations in the region from Singapore can also apply for tax exemption on their income.
In addition, Singapore's double taxation agreements signed with 28 countries and investment guarantees with 15 countries, offer tremendous advantages to regional headquarters based in the city.
Since 1986, the Economic Development Board has awarded the operational headquarters incentive to more than 40 Fortune 500-type companies from the US, Europe and Asia.
Some leading examples are United Parcel Service, General Electric, Matsushita, Sony, Reuters, Thomson, BASF, Moet Hennessy and Club Med.
The operational headquarters and business headquarters' programmes have helped position the city as an international hub for regional headquarters and business services.
From their base in the city, many have expanded their functional and geographical responsibilities.
Sony, Matsushita and Union Carbide have added significant treasury management activities to their regional responsibilities, to take advantage of the increasing pool of funds generated through capitalising on their operational headquarters' structure and operations in the region.