Singapore: Economy forecast to register positive growth
According to the Monetary Authority of Singapore (MAS), the island republic’s economy is forecast to grow by 1 to 3 percent in 2017. The MAS Annual Report released on 29 June indicated that while the country’s economic growth has been somewhat uneven across sectors, it is expected to gradually broaden to the rest of the economy over the course of 2017.
According to the report, the manufacturing, transport and logistics, and the wholesale sectors, accounting for 43 percent of GDP, were the major drivers behind the economy’s rebound since the fourth quarter of the previous year. On the other hand, the services sectors comprising finance, business processes, and IT-enabled services, accounting for 30 percent of GDP, recorded mixed outcomes in the last two quarters. These sectors are, however, poised to register higher growth in the latter half of 2017. Retail and food services, and construction sectors, which account for 17 percent of GDP, are expected to remain weak.
Malaysia: World Bank forecasts positive growth in 2017
According to the Malaysia Economic Monitor, launched by the World Bank, the country’s growth rate for 2017 is forecast to increase to 4.9 percent. Malaysia registered a 5.6 percent year-on-year growth in the first three months of 2017, its highest quarterly growth rate in two years. According to the report, Malaysia’s positive growth outlook is driven largely by strong private consumption, supported by improving labor market conditions. Increasing private investments and major government-led infrastructure projects also contributed to it.
According to the report, an upturn in the US was reflected in the rising external demand, and stabilizing commodity prices as well as a recovery in global trade further helped to boost growth. The report also includes a special section on the importance of good data and effective data management, and how this can inform policy-making and improve service delivery. The Malaysia Economic Monitor series provides an analytical perspective on the policy challenges facing the country as it develops into a high-income economy.
By Dezan Shira & Associates
Editor: Vasundhara Rastogi
It is important for companies operating and hiring employees in Singapore to understand the key elements of the country’s payroll process and stay updated on the latest regulatory changes when computing salary and social security contributions.
The Employment Act of Singapore defines ‘salary’ as all remuneration including allowances, base salary, bonuses, commissions and incentives, payable to an employee for work done under the contract of service. Salary does not include:
- Any reimbursement made for expenses incurred by the employee during work;
- Allowances for travelling, food, housing, medical and other amenities;
- Goodwill payment or gratuity payable on retirement;
- Retrenchment benefits payable; or
- Pension or provident fund contributions paid by the employer.
Thailand: First quarter GDP growth fastest in four years
The Thai economy recorded its fastest growth in four years during the January-March 2017 period. This has been propelled by stronger exports, consumption and growth in tourist arrivals despite weaker private investment and public funding. According to a poll conducted by Reuters, gross domestic product (GDP) is expected to have expanded a seasonally-adjusted 1.2 percent in the January-March period from the previous quarter, when growth was 0.4 percent – the best pace since the final quarter of 2012. As per the poll, growth is expected at 3.3 percent in 2017, up from 3.2 percent in the previous year.
According to data from Thailand’s central bank, exports grew at 6.6 percent in January-March, private consumption at 2.9 percent and farm income grew at 20 percent. Exports comprise about two-thirds of the Thai economy. Tourist numbers rose to 9.2 million in the January-March period from 7.8 million in the previous quarter, when some tourism-related entertainment activities were curtailed following the death of King Bhumibol Adulyadej in October 2016.
Singapore: Innovation fund created to fuel growth
As part of its bid to fuel economic growth, Singapore’s government is setting up a S$1 billion (US$718 million) fund to help innovative companies to develop their businesses and expand overseas. Billed as the Makara Innovation Fund, the project is a collaboration between the Intellectual Property Office of Singapore (IPOS) and local private equity firm Makara Capital. According to IPOS, the fund will invest S$30 million (US$21.5 million) to S$150 million (US$107.5 million) each in 10 to 15 companies with globally competitive technologies over the next eight years.
According to Bloomberg’s 2017 innovation index, Singapore ranked sixth ahead of the U.S. and Israel. According to Bloomberg estimates, Singapore has the third-largest number of patents granted per one million inhabitants, trailing only South Korea and Japan. As per latest available data from 2015, Singapore had 10,814 applications for patents, the largest number of any Southeast Asian nation, according to the World Intellectual Property Organization. According to IPOS, the agency plans to double the number of intellectual property experts in Singapore to 1,000 over the next five years and will train 4,000 people a year. It will also assist companies in using intellectual property as collateral for financing. IPOS expects these initiatives to add about S$1.5 billion (US$1.07 billion) in value to Singapore’s economy over the next five years.
Singapore: ISO 37001 Anti-Bribery Systems Management Standard adopted
In order to enable Singapore-registered companies to implement and manage anti-bribery best practices, the city-state recently adopted the ISO 37001 Anti-Bribery Systems Management Standard. The Standard is being launched jointly by SPRING Singapore, an agency under the Ministry of Trade and Industry, and Singapore’s Corrupt Practices Investigation Bureau (CPIB). The two organisations released a joint statement saying ISO 37001 “is based on internationally recognized good practices [and] provides guidelines to help Singapore companies strengthen their anti-bribery compliance systems and processes [to] ensure compliance with anti-bribery laws.”
An accreditation mechanism for certification bodies is expected to be rolled out by the end of 2017. The majority of people prosecuted for bribery and corruption in Singapore in 2016 were private sector employees. According to the CPIB, 808 corruption complaints were filed in 2016, down from 877 complaints filled in the previous year.
By Dezan Shira & Associates
Singapore’s parliament on March 10, 2017 passed significant amendments to its Companies Act and Limited Liability Partnerships (LLP) Act. Among the key changes are measures aimed at making ownership and control of business entities more transparent in the city-state and reduce opportunities for the misuse of corporate entities for illicit purposes. The measures are also aimed at bringing Singapore in line with international good practices, and uphold the city-state’s sound reputation as a globally trusted financial hub. Among other significant changes introduced by the amended acts are (a) increased record keeping requirements and (b) introduction of an inward re-domiciliation regime allowing foreign corporate entities to transfer their corporate registration to Singapore.
Singapore – Ghana sign Double Taxation Avoidance Agreement
Singapore and Ghana have signed a Double Taxation Avoidance Agreement (DTA) on March 31, 2017. The agreement aims to reduce double taxation and tax disputes by clarifying the taxation rights on all types of income flows arising from cross-border business between the two countries. The DTA aims to reduce trade and investment barriers and increase trade flows between the two countries.
The agreement stipulates that withholding taxes on dividends, interest, and royalties will not exceed seven percent, while withholding taxes on services will be capped at 10 percent. All rates will come into effect on or after January 1, following the year when the DTA comes into force. The DTA will come into force after its ratifications by the two countries.
Singapore: Government proposes new cybercrime laws
The Singapore government will include four major amendments to the Computer Misuse and Cybersecurity Act in view of growing cyber threats. Once the Bill is implemented, it will criminalize trading of personal information such as credit card details, medical information, and banking information, even if no hacking was involved to gain such information. Buying or selling of hacking tools and software with criminal intent will also be considered an offence. Overseas committed offences will also fall under the ambit of the amended Act. Any act that causes illness, injury or death, and disruptions to essential services, national security, and Singapore’s foreign relations will be considered an offence.
According to a new section in the bill, multiple unauthorized access to one computer for a period of 12 months or less will be treated as a single offence. Treating multiple unauthorized acts as a single offence will lead to a heavier penalty. The maximum penalty under the Computer Misuse and Cybersecurity Act varies from US$5,000 fine and two years’ imprisonment, to a US$100,000 fine and 20 years’ imprisonment depending on the crime. Last amended in 2013, the government plans to introduce a new Cybersecurity Act in the middle of 2017 after public consultations.
By: Dezan Shira & Associates
An Introduction to Doing Business in ASEAN 2017, the latest publication from Dezan Shira & Associates, is out now and available for complimentary download through the Asia Briefing Publication Store.
What happens in and around ASEAN is one of the key factors increasingly impacting upon China and India trade flows, as well as the rest of Asia. While the ASEAN trade bloc has been in existence since 1967, it has really shown its importance in trade and commercial business flows since the rise of China over the past three decades, and through its response to China’s changing domestic demographics. Those changes – an aging and increasingly consumer demanding China – have been skillfully adapted by ASEAN to place the future of global manufacturing, and where it takes place, firmly within its own orbit.
Simply put, free trade agreements that came into effect with China and India in 2010 changed the face of Asian trade and production, and are continuing to do so. For example, bilateral trade figures between China and ASEAN’s Big Five of Indonesia, Malaysia, Philippines, Singapore, and Thailand have multiplied by factors of 500 percent since the agreement was signed. With the smaller ASEAN nations of Cambodia, Laos, Myanmar and Vietnam coming into line with their own compliance of ASEAN customs duty reductions at the end of 2015, the entire bloc offers close to zero import-export tariffs for much of emerging Asia, including the giant markets of China and India, possessing some 500 million middle class consumers between them. ASEAN therefore represents a massive trade bloc possessing free trade agreements of global strategic importance. The question of accessing ASEAN for the benefit of North American, European and other global purchasing and manufacturing executives is a key function of this report.
An Introduction to Doing Business in ASEAN introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment and taxation. We also include the latest development news in our “Important Updates” section for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each. Additional research and commentary on ASEAN’s relationships with China, India and Australia is also provided.
- An introduction to ASEAN
- Country profiles
- Case studies: ASEAN as a platform for Asian growth
Our practice, Dezan Shira & Associates, has taken giant steps into the ASEAN market through the establishment of offices throughout the region, in addition to the creation of a unique alliance of firms. That, coupled with our existing long experience of handling foreign investment into China and India, puts us in a unique position of truly understanding how Asia works and how to maximize its free trade benefits.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
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Dezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.
An Introduction to Doing Business in ASEAN 2017
An Introduction to Doing Business in ASEAN 2017 introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment, and taxation. We also include the latest development news for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each.
Human Resources in ASEAN
In this issue of ASEAN Briefing, we discuss the prevailing structure of ASEAN’s labor markets and outline key considerations regarding wages and compliance at all levels of the value chain. We highlight comparative sentiment on labor markets within the region, showcase differences in cost and compliance between markets, and provide insight on the state of statutory social insurance obligations throughout the bloc.