In a bid to strengthen economic and financial resilience within the country, Singapore’s central bank, the Monetary Authority of Singapore (MAS), has recently announced that it will adhere to a prudent monetary policy. It will also safeguard Singapore’s reputation as a trusted financial centre by fighting money laundering and tax evasion.
Singapore Incorporation views these policies as steps that will ultimately boost the confidence of investors and motivate them to incorporate a company in Singapore. This is especially relevant as businesses based in Singapore must continually meet higher standards of corporate governance and transparency, to compete in an increasingly globalised world.
Promoting monetary stability in the face of risks
As widely expected, the Monetary Authority of Singapore (MAS) said it will stick to a prudent policy of allowing a ‘modest and gradual’ appreciation of the Singapore dollar.
The decision to stabilize inflation resonates with its mandate of safeguarding the city-state’s economic stability and financial resilience. Although Singapore has weathered the volatile macro conditions over the last few years, new risks to the economy are cropping up. For example, the lower financial stimulus by the U.S. Federal Reserve could lead to higher borrowing costs and falling asset prices.
Reflecting on the Central bank’s decision to maintain this stance, Deputy PM Tharman commented that continued judicious management of the Singapore dollar exchange rate will ensure medium term price stability, and anchor inflation expectations, while supporting the economy’s transition to productivity-led growth. In light of inflationary pressures, he said that MAS will continue to remain vigilant against a resurgence of cost and price pressures.
Optimism ahead
According to MAS’ Macroeconomic Review (Issue 1 April 2014), the Singapore economy is expected to grow at a moderate pace in 2014, supported by the cyclical uplift in the industrialised economies.
For example, brightened economic outlook in the global markets, recovery in the U.S. labor market and emergence of Eurozone from recession, might bring some pickup in corporate capital expenditure, including a boost to the IT budgets.
In addition, domestic activities are expected to stay on track supported by construction, transportation, housing and social infrastructural projects, according to MAS. With a low unemployment rate, the Singapore economy was forecast to expand by 2 - 4% in 2014.
Ensuring Singapore is a trusted financial centre
On top of these measures, Deputy PM Tharman stressed on his commitment to combat money laundering and tax evasion and noted a series of measures to ensure a clean and trusted financial centre. He added that laundering proceeds from tax evasion and tax fraud is now a crime in Singapore as MAS has stepped up regulations to meet global standards on exchange of information (EOI). Singapore has 75 Avoidance of Double Taxation agreements (DTAs) which include EOI clauses.
“In the light of global risks to the economy, Singapore’s monetary authority is committed to promote financial stability in the city-state. MAS’ prudent monetary stance will maintain Singapore’s attractiveness to businesses, while ensuring productivity-led growth. Singapore was largely resilient to the macroeconomic stresses induced by the recession and has the frameworks in place to ensure resilience in future as well. For example, Singapore has fully implemented the Basel III minimum capital requirements for the local banks 2 years ahead of the international deadline,” commented Ms. Cheryl Lee, Business Development Manager at Singapore Incorporation.
“The positive economic outlook for 2014 will encourage businesses to continue to come to incorporate a company in Singapore, taking inherent advantages of its core strengths and stability. Even though regulations are getting tougher in Singapore and companies have to meet stricter compliance requirements to compete in an increasingly globalised world, the country still offers a vantage point from which to do business,” affirmed Ms Lee.
About Singapore Incorporation (incorporation-singapore.com)
Singapore Incorporation is a one-stop solutions provider to companies and professionals who want to do business or work in Singapore. Other than incorporating companies, Singapore Incorporation also offers Singapore work pass, accounting and tax, as well as statutory compliance services. 
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