Singapore has retained its title as the best place in the world to do business for the seventh consecutive year, according to research.
The tiny sovereign city-state ranked at the top out of 82 countries on the list compiled by the Economist Intelligence Unit (EIU). The UK fared less well but inched up one spot from last year to 21st on the list, just below Malaysia, Austria and France, This is Money website reported Thursday.
According to the EIU report, Singapore owes its position at the top to its 'efficient, open economy', which placed it ahead of Switzerland, Australia, Hong Kong and Sweden respectively in the top five.
Singapore continues to be a magnet for foreign companies because of its relatively low corporate tax rate of about 17 percent, extensive legal and business services, and the fact that it is largely corruption-free.
EIU global analyst Mike Jakeman said: "Singapore is consistently near the top – or at the top – of our rankings. The economy is open and efficient, and it is close proximity to several other excellent places to do business, which means that policymakers are incentivized to keep making improvements.
"There are domestic challenges – such as maintaining the right balance between local and foreign workers – and its political system is far from a true democracy, but we still believe it is the most straightforward place to do business."
The US made it into the top 10 in the seventh spot ahead of Denmark, New Zealand and Finland, although it was beaten to sixth position by Canada.
Ranking Factors
The EIU rankings are based on a number of factors, including political climate, taxes, labor market and infrastructure, as well as a country's openness to foreign investment.
Jakeman conceded that Britain's position on the list was disappointing: 'At 21st, the UK is ranked behind Malaysia, Chile and Taiwan, which looks disappointing for a wealthy, liberal democracy.
'The UK is held back by the disappointing performance of the economy since the global financial crisis. The stronger performance over the past year ought to augur well for the UK in next year's ranking.
'We also see the difficulties of a complex tax system, a congested transport network, the threat from international terrorists and the prospect of worsening international relations – especially if the current anti-EU feeling continues."
BRIC countries, meanwhile, languished in the bottom half of this year's rankings, with Brazil and India at 47th and 48th place respectively, while China placed 50th on the list, with Russia at 64th.
Foreign Investment
In 2013, the five biggest economies in southeast Asia received $1.3t in foreign investment, outstripping commitments into China for the first time, according to Singapore’s trade ministry.
Philips, the Dutch consumer electronics and healthcare equipment group, two months ago revealed plans for a new regional headquarters based in Singapore to be completed by 2016.
Multinationals have also started to open offices in Singapore to serve the wider Asia region, in some cases encompassing their Middle East operations as well.
Archer Daniels Midland in September moved its regional Asia headquarters to Singapore from China, while General Motors in August shifted the bulk of its non-Chinese international operations from Shanghai to a new regional office in Singapore that will also oversee India, Africa and the Middle East.
