Singapore Founding Series | Episode 2: Why Companies and the Wealthy from Around the World Aim for Singapore

In the first episode, I wrote that
Singapore is a country that did not rely on resources, but rather
managed the nation itself. This raises another question.
Why do companies from all over the world

place their headquarters in Singapore?

Why do the wealthy from all over the world
move their assets to Singapore?

Many people answer,
"Because taxes are low."

Certainly, that is one of the reasons.
However,
if that were all, every low-tax country in the world
would be like Singapore.

The reality is different.
The real reason is that
they are selling peace of mind, not tax rates.

Chapter 1: What Companies Are Buying

Companies seek profit.
Everyone knows this.
However, they do not choose a country based solely on profit.

What companies hate most.
That is,

uncertainty

.

Tax systems change suddenly.
Laws change suddenly.
Systems change every time the administration changes.
The courts cannot be trusted.
The administration acts arbitrarily.

In corporate management,
there is no greater risk than this.

That is why companies,
before looking at tax rates, choose

a country where the rules do not change

.

What Singapore is selling is not tax rates.
It is trust in the system.

Chapter 2: Tax Rates Are Just Part of the "Product"

Singapore's corporate tax rate is 17%.
It is low even by international standards.
Furthermore, there is basically no capital gains tax.

There is no inheritance tax.
There is no gift tax.
Under certain conditions,
capital gains from cryptocurrency investments are also not taxed.

Looking at this alone,
it gives the impression of being a "low-tax country."

However, what is important here is that
taxes alone are not enough to attract companies.

Even if tax rates are low,
they won't come if the politics are unstable.
They won't come if the courts cannot be trusted.
They won't come if the financial system is weak.

In other words, the tax system is

part of a completed national product

.

Chapter 3: A Nation is Also a Brand

Companies have brands.

Apple.
Microsoft.
Toyota.

A brand is peace of mind.

A nation is the same. Companies are

"Singapore"

buying the brand called.

Contracts are honored.
It is a nation governed by the rule of law.
English is spoken.
Finance is at a world-class level.
Both the port and airport are world-class.
Access to the ASEAN market is available.

All of these are the national brand.

Chapter 4: A Country That Designs Demand

Ordinary countries try to attract companies.

Please build a factory.
Please invest.
Please pay taxes.

But Singapore is different. First, it analyzed what companies wanted.

Safety.
Tax system.
Finance.
Logistics.
English.
Excellent talent.
Living environment.

It provided all of that as a nation. In other words, it read the demand and designed the supply.

This is exactly the same as corporate management.
You do not create products you want to sell.
You create products that the market wants.

Lee Kuan Yew
managed the nation with that mindset.

Chapter 5: Gathering Trust, Not Just Profits

Companies pursue profits.
However, they do not choose a country based on profit alone.

The reason companies from all over the world gather.
The reason funds from all over the world gather.
The reason the wealthy from all over the world entrust their assets.

That is,

"This country is safe."

It is because there is trust.
Trust is invisible.
However, it is also the most valuable asset in the world.

What Lee Kuan Yew built was

not a port.
Not a tax system.
Not a financial center.

A place where companies from around the world can safely entrust their future.
That was the national brand of Singapore.

Conclusion

The essence of national management and corporate management is the same.
Profit is a result.

However, if you make profit your goal, profit will escape.
As a result of continuously providing the value that companies seek,

Companies gathered,
Capital gathered,
Talent gathered,
And the nation became wealthy.

Singapore is
not just a country with low taxes.

It is a country that continuously supplied the value the world sought in the form of a nation.

...
History is not the past. The structure is still alive today.
That is why history is a textbook for reading the future.

★Reference Materials

International City Corporate Attraction Ranking

Rank | Country/Region | Evaluation
1st Place: Singapore
World-class in overall strength. Excellent balance of corporate tax, legal system, political stability, English environment, finance, talent, and port/airport infrastructure.

2nd Place: United Arab Emirates (Dubai, Abu Dhabi)
Gateway to the Middle East and Africa markets. Rapidly growing as wealthy individuals and sovereign wealth funds gather.
3rd Place: Ireland
Very strong in attracting European headquarters. Google, Apple, Microsoft, etc., have their European headquarters here.
4th Place: Switzerland
World-class in asset management, finance, and pharmaceuticals.
5th Place: Luxembourg
Overwhelming presence as a location for establishing investment funds, PE, and infrastructure funds.
6th Place: Netherlands
Popular as a hub for European logistics, supply chains, and holding companies.
7th Place: Hong Kong
Previously top-tier, but due to changes in relations with China, some international companies have relocated to Singapore.
8th Place: United Kingdom
London remains a financial center, but competitiveness has declined somewhat since Brexit.
9th Place: Mauritius
Has strengths in establishing holding companies and funds for African investment.
10th Place: Malaysia
High cost competitiveness, but falls short of Singapore in attracting headquarters functions.

★Why is Singapore 1st?
Singapore meets almost all the factors companies prioritize when setting up headquarters at a high level.

・Stable politics and legal system
・Adopts English common law, ensuring high contract reliability
・Relatively low corporate tax rates with preferential systems
・English is an official language
・World-leading ports and airports
・Easy to hire excellent foreign talent
・Good access to Asian markets
・Concentration of many financial institutions and investment funds

Very few countries in the world combine all of these.

Next Episode Preview

Singapore Founding Series | Episode 3
Why Wealth from Around the World Continues to Gather in Singapore

You cannot become a financial city with just a tax system.
Just having banks,
or just having securities companies,
will not attract global capital.
What Singapore designed was
"a structure where money gathers, money flows, and money grows."
When it designed the nation as a single financial platform,
the world began to need this small island nation.

★This is the post index.
★Please take a look if there are any articles you are interested in.

Post Index - Introducing all episodes
Post Index 2 - Explaining the benefits of reading by series

British Empire Series INDEX
Habsburg Empire Series INDEX
Ottoman Empire Series INDEX
Roman Empire Series INDEX
World's Great Figures Series INDEX
Thirty-Six Stratagems Series INDEX
Corporate Bankruptcy Series INDEX
Tokugawa Shogunate Series INDEX
Sun Tzu's Art of War Series INDEX
Series Supporting the Design of Judgment INDEX