Venturing overseas - what more can Singapore do on the tax front?

THE clarion call for Singapore companies to venture abroad has been repeatedly sounded by the government. With a limited domestic economy, it is crucial for companies to internationalise for access to broader global markets, resources and to scale up their businesses. Key drivers of future global growth will come from the rise of emerging markets, rapid urbanisation and escalating demands for higher-value services. With Singapore's extensive trade links and unparalleled connectivity, companies here are well-positioned to capitalise on these growth drivers to expand their international footprint.

Venturing abroad not only enables Singapore-based companies to overcome constraints of the domestic market, intense competition in the international arena also sharpens these companies' competitive edge. This will encourage the growth of globally competitive companies which can create value as Singapore transitions to a value-creating economy.

However, expanding beyond one's home country can be a daunting venture, especially for smaller companies with limited resources and lack of market knowledge or business partners. Common challenges faced by companies when internationalising include navigating multifaceted operating environments, understanding complex local tax and regulatory regimes (such as local participation and licensing requirements), and dealing with political instability, lack of robust corporate governance and currency uncertainties - hygiene factors which businesses are accustomed to enjoying in Singapore.