Singapore ranks top overall, up from 7 in the previous iteration of the index. Key reasons for the dominant position are:
- The political, legal and governance framework, with high scores being attributed to political stability, the low level of legal and regulatory risk, the high quality of the financial regulatory system, and government encouragement of private enterprise and competition
- Access by firms in Singapore to medium-term financing and the depth of the domestic banking market
- Low corporate tax burden
- Low barriers to international trade and exchange flows
- Low unemployment
- High investment in IT
However, the Index noted that Singapore’s level of dynamism was held back by the reducing volume and value of inward M&A deals, by the lower recent levels of foreign direct investment, and by the reducing percentage of the population under 30 years of age.
The Index’s findings are backed up by Grant Thornton’s own International Business Report for Q2 2015, which surveyed over 5,000 global business decision-makers. This found that:
- Only 7% of those polled were put off investing in Singapore by its legal and regulatory framework
- Only 6% were dissuaded by its political framework
- Only 6% were dissuaded by limited access to finance
Over half of global business leaders surveyed thought Singapore a key strategic market for their business.
Peter Allen, CEO of Grant Thornton Singapore, said: “The Index’s findings accord with our own experience of operating here in Singapore. This is a strategically crucial market for us where the very stable political, legal and regulatory framework makes it a natural hub for our, and our clients’, operations in the region. The one weak spot is inward M&A which has been held back by disparities in pricing expectations. Although the current relative softness of the Singapore dollar may help this, we fear that vendors of Singaporean businesses may need to adjust their price expectations over the next year or two.”
