November 15, 2010
I’ve long argued that the path to becoming a successful entrepreneur lies in finding ways to create value– solving problems. The larger the problem, or the more people affected by the problem, then the more value is created… and hence, the greater the reward for the entrepreneur.
It takes a bright and creative mind to do this; coming up with innovative solutions takes focus, energy, and out of the box thinking. After all, if you do what everyone else is doing, you’ll only be as good as everyone else.
Once the initial concept is framed, there are a lot more steps to operationalize the idea. In order to build a business, one must have access to startup capital, talented labor, flexible hiring conditions, stable banks, reasonable regulation, and a tax code that isn’t destructive.
Like it or not, governments have a heavy hand in establishing these conditions, and too many bureaucrats these days are setting policies that create disincentives and obstacles for productive entrepreneurs.
When politicians increase capital gain tax rates and mop up any available financial liquidity by overselling government bonds, the net effect is reducing the supply of capital that might be able to fund startups.
Laws which freeze wages, impede layoffs and terminations, and introduce expensive, unaffordable benefits create disincentives for hiring workers… or even for starting up a new business to begin with.
Most of all, the fact that a government forcibly inserts itself as your business partner and takes a percentage of your profits also provides a strong disincentive to starting a business… the higher the tax rates become, the stronger the disincentive.
Who in his/her right mind wants to do all the work and take all the risk, but pay out a hefty portion of the reward (under threat of imprisonment) to a partner that adds no value? It doesn’t make any logical sense.
There are a few countries out there, however, where governments are actually supportive of business. They take a very small (or zero in many instances) percentage of profits, and make up for it by setting the proper conditions to ensure that talented people and businesses can thrive.
Singapore is one such place; the official tax rate is a mere 17%, but even that slight amount is overstated. The government charges 0% tax the first S$100,000 (roughly $78,000 USD) in profit because they understand how important the first profits are to a startup.
The next S$200,000 in profit is only taxed at 8.5%, and profits beyond S$300,000 are taxed at 17%. Furthermore, businesses are not required to pay tax on profits which are earned outside of Singapore and not remitted back to the country.
Aside from a streamlined tax code, Singapore’s government supports business in a variety of other ways. In many instances, they help raise capital for startup companies, and they provide simple residency programs for entrepreneurs who want to start a business in Singapore.
And as for a stable banking system? Singapore has never had a bank failure in its history. Ever. It’s a very efficient place to bank, both for individuals and businesses, and foreigners who declare residency are able to obtain loans to fund their businesses with the same conditions as Singaporeans.
Singapore is certainly not the only pro-business jurisdiction in the world, but it’s one of the most supportive. One of my own businesses is based here, and I bank here as well.
At our upcoming offshore workshop which will be held 18-20 February in Panama, I’ll have my own personal contacts from Singapore in attendance who can help you create a business structure, establish a bank account, and register for residency (and eventually citizenship).
If you want more information about this limited-engagement, hands-on workshop, I’m holding a teleconference to discuss the details tomorrow (Tuesday) at 11am Eastern Time.
Title: Sovereign Man Offshore Workshop Overview
Time: Tuesday, November 16th at 11:00am Eastern // 8:00am Pacific
Phone number: (630) 300-6276
Conference ID: 167274#
– or – webcast http://attendthisevent.com/?eventID=16005873