Prominent investor and cofounder of the Quantum fund Jim Rogers is known for saying: “If you were smart in 1807, you moved to London; if you were smart in 1907, you moved to New York City; and if you are smart in 2007, you move to Asia.”
But where exactly does Jim Rogers suggest moving to in the 21st century? Among the many Asian countries, he has chosen Singapore. With its strategic geography, first class facilities, important Asian and global transportation networks – not to mention very clean air – Singapore makes a lot of sense for a potential expatriate.
In the following overview, I will share a few points taken out of the comprehensive report I've written, called “A Beginner's Guide to Singapore”.
Singapore is a city-state with a population of 5.1 million people as of 2011. Englishman Sir Stamford Raffles officially founded Singapore as a trading post of East India Company in 1819. (It was reported that he spent less than eight months of his total time on the island.)
In 1824, Britain obtained full sovereignty over the island from the Sultanate of Johor. After more than a century of British governance, the Japanese occupied the island during WWII and reverted the island to British rule after the war and the island quickly became self-governing in 1959 for the first time in its history. Later, Singapore united with other former British territories to form Malaysia in 1963 and Singapore gained full independence just two years later in 1965.
After separation from Malaysia, Singapore had a GDP/capita ratio equal to Jamaica and today, it is more than eight times greater. (The total GDP today is close to neighboring Malaysia, which has a larger population, abundant natural resources, and a far greater land area.)
Singapore: The “Lion City”
“Singapore” means “lion-city” in Sanskrit, and the official symbol of the city is the Merlion – a creature that is half lion and half fish. While it is unlikely that lions ever inhabited the island, tigers were once populous on the island and were reportedly responsible of hundreds deaths each year in 19th century (before they were all hunted down.)
Singapore is one of the four original Asian Tigers and ranks at the top of various global rankings for ease of doing business and low perception of corruption. The city is second behind Hong Kong in economic freedom and is the fourth most important financial center in the world. Interestingly, Singapore is now the second biggest gambling destination in the world despite only opening the first casino six years ago! (On the downside, however, Singapore constantly ranks near the top of Mercer's cost of living survey.)
With few natural resources at its disposal, Singapore relies on an export driven economy and focuses primarily on electronics, chemicals, and machinery as well as services (financial, medical, tourism, and gambling).
FINANCE AND TAXATION
Singapore is an excellent banking jurisdiction that takes advantage of inflow of Sharia (Islamic religious set of laws) capital and the large presence of capital from China. Banks headquartered in the West (such as HSBC and private Swiss institutions) are also very active in the country. It is also worth mentioning that Singapore has never had a single bank failure in its entire financial history.
Opening a bank account, however, can be slightly cumbersome as an individual's personal presence is normally required and the applicant must be a Singaporean resident. The latter requirement can be bypassed by opening a Singaporean corporation and then applying for a corporate bank account in Singapore.
Singapore personal income tax rates are capped at 20% for residents and are a flat 15% for non-residents. Corporate tax rates are capped at 17% and corporations are only taxed on Singapore-generated income and income remittances (thus, if you bank elsewhere and do not conduct business in Singapore you have negligible tax liability.)
Educational facilities, hospitals, and abundant shopping centers are all first-class in Singapore (while train stations, the airport and even bus stops are all sparkling clean). The “Little India” district, for example, appears just like any other Indian ward of Asia with the exception that it is exceptionally clean.
Singapore is one of the busiest travel hubs in the world. International carriers fly routes out of Changi airport to multiple destinations throughout the world at competitive rates, thus residents and visitors will not have trouble getting in and out of Singapore. Transitting to and from the airport via the metro is both convenient and easy. Since its inception in 1981, Changi airport has won over 390 different excellence awards, making it the most awarded airport in the world.
Everyone in the country speaks English, while Mandarin, Malay, and Hindu are also widely used. All government agencies conduct their work in English (including document translation), thus eliminating language barriers for native Engish speakers. The Singaporean government is strategically promoting Mandarin through special programs with the slogan of one of the past programs being “Speak Mandarin, it's an asset.” And I fully agree.
Traffic jams are rare in Singapore due to governmental controls on automobile ownership that make it prohibitively expensive for the natives to own a car. Prior to purchasing a new car, individuals must purchase a “certificate of entitlement” from the government allowing car ownership which is valid for 10 years. The price is formed by market participants and is constantly floating – e.g. the price of entitlement for a mid-size car was a jaw-dropping 70,000 SGD (or approximately 55000 USD) as of August 2011.Needless to say, most residents choose to walk to the closest subway station and then hop on the train.
Crime in general (and violent crime in particular) is virtually nonexistent in Singapore. I was told that you have to be extremely unlucky to get into any sort of criminal trouble anywhere on the island. One resident shared with me that during the last 20 years he never locked the door of his apartment while living in the city!
Perhaps the biggest drawback of Singapore is that, because the place is highly developed, this drives up the overall price levels. In short, for an average person, Singapore may not be the place to come to without a job offer or specific business opportunity (as simply deciding to “just come here and see what happens” would probably not work for most expats as the daily spending rate here – unlike places like the Philippines or Colombia — is so high).
That's it for our overview of Singapore. In the full report, I'll cover:
- Various residency programs that exist in the Lion City
- The truth about it's image as a “boring” place to live (wrong!) and
- How to obtain a valuable Singaporean citizenship simply by choosing Singapore as a place to store your gold
[Mark's report “A Beginner's Guide to Singapore”, is available for members of the International Man Network. For more information, click here.]