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Singapore’s Political & Legal Business Environment Research Paper


One of the largest financial centers, not only in Asia, but also all over the globe, Singapore offers numerous opportunities to develop any business. Nowadays, it is considered an attractive venue for companies: According to the recent Global Financial Centres Index rankings, it is the third most significant center, having managed to outrank such cities as Hong Kong and Tokyo (Choudhury 2016). However, financial reasons are not the only criteria that should be examined. It is not possible to conduct various affairs without taking into account the peculiarities of the country or city and its political and legal issues. Whether a company plans to cooperate with Singaporean organizations or takes an independent stand in the Singaporean market, the task of primary importance is to scrutinize the political environment, particularly its political system, structure, political parties, and the possible political risks. Another essential sphere is the legal environment: Prior to performing any action, one should be aware of the characteristics of the legal system, legal issues in the international business, and legal risks.

Political Environment in Singapore

Political System

The governmental authorities possess the most considerable political power. Singapore is a unitary state and a parliamentary republic. Its present-day political system is connected with the past. In 1963, Singapore won its independence from the United Kingdom as a part of Malaysia, and two years later, Singapore further separated from the latter; nowadays, it is a republic within the Commonwealth (Department for International Trade 2016). The transformed Westminster Parliamentary system has been implemented; the unicameral parliament consists of the elected Members of Parliament and the Nominated Members of Parliament. Each Parliament may sit only five years, and after that, new elections are scheduled; the last elections took place in 2015. The president elected by the Parliament is the Head of State. The last presidential elections were held in 2011.

Political Structure

That there is only one level of the government in Singapore can be explained by its small territory. The political structure of the Republic of Singapore is hierarchical. It may be represented in a descending order, with the most powerful political leaders or governmental bodies on the top and the least powerful at the bottom.

Political Structure

One can see that the President is the highest rank in the political hierarchy. This person is to act explicitly in accordance with the advice of the cabinet or a minister under the authority of the cabinet (Morgenbesser 2016). The executive branch is represented by the Cabinet of Singapore. The Parliament is the form of the legislative branch. Finally, the judiciary branch is represented by the Supreme Court: A chief of justice and other judges are appointed by the President (Tan 2012).

Political Parties

The People’s Action Party (PAP) has been the leading party since 1959; only recently, in 2006, the opposition parties, namely the Workers’ Party, the Singapore Democratic Alliance, and the Singapore Democratic Party, appeared (Kenyon, Marjoribanks, & Whiting 2013). This tendency for a growing number of parties is relevant today. During the last elections in 2015, eight parties competed with PAP (Morgenbesser 2016).

Political Risks

As the experts estimate, the political risks for businesses are low (Morgenbesser 2016). In comparison with other Asian countries, the democratic form of government and the people’s loyalty to their government make Singapore a safer business venue. Independence has brought not only the opportunity to make autonomous decisions but also political stability. The people seem to be satisfied with the current state of affairs, and they will not ruin this system.

Legal Environment in Singapore

Legal System

Just as in the political system, the basis of the Singaporean body of laws pertains to the English legal system, although there have been some essential changes. The Westminster model is relevant in terms of the legal system. It is possible to derive the sources of law from the Singaporean Constitution, legislation, subsidiary legislation (for instance, Rules and Regulations), and judge-made law (Kenyon, AT, Marjoribanks, T, & Whiting 2013). As the supreme law, the Constitution provides the fundamental premises.

It is noteworthy that Singapore has inherited English common law tradition and values stability, certainty, and internationalization, particularly in the commercial sphere (Singapore Law Committee 2015).

Legal Issues in International Business

Since organizations from all over the world seek to collaborate with Singaporean companies and act within those markets, innovations are inevitable, and the laws are not the exception. Some aspects of the domestic legal system are changing at the moment, since Singapore has entered into many bilateral Free Trade Agreements (FTAs) with its trading partners. This process is likely to continue, because new companies are expected to act in the city. For instance, as a party to the plurilateral Government Procurement Agreement of the WTO, Singapore legally provides better opportunities and a more attractive procurement environment to its FTA partners (Singapore Law Committee 2015). Another example is the country’s competition legislation. According to the Competition Act, which refers to foreign market actors as well as domestic manufacturers, anti-competitive practices are to be addressed, because the trading environment is supposed to be open and competitive (Singapore Law Committee 2015).

All these examples prove the idea that the Singaporean legislative system combines different tendencies. On the one hand, the traditions of the past still linger, and law is seen as the cornerstone. At the same time, one has to admit that the country is developing and interacting with a wide range of partners from diverse countries, and successful communication and consent are significant elements of cooperation. Consequently, some changes occur.

Legal Risk

Comparing the legal system of Singapore, again, with the situation in other Asian regions, it is possible to state that the Republic of Singapore proves to be an advantageous venue. The legal system is enforceable, because it is based on principles of the English system, which are familiar to Western society. Consequently, the risks of misinterpreting are lower. Singapore is notable for its incorruptible legal system, and a company can safely run its business under the favorable conditions to be found there (Department for International Trade 2016). The corporate tax rate is lower than in the US: While it is 17% in Singapore, the American rates are twice as much (Singapore Law Committee 2015). Consequently, the risks of failure and loss of money are smaller.


In summary, it is only natural that Singapore has become a preferable business venue. The comprehensible legal system, non-biased regulations, and the tendency to implement business-friendly laws attract companies from different countries. The risks associated with legal and political issues are low. Singapore has managed to prove that it can provide good conditions for domestic and foreign businesses.

Reference List

Choudhury, SR 2016, , CNBC, Web.

Department for International Trade 2016, , Web.

Kenyon, AT, Marjoribanks, T, & Whiting, A 2013, Democracy, media and law in Malaysia and Singapore: a space for speech, New York, Routledge.

Morgenbesser, L 2016, ‘The autocratic mandate: elections, legitimacy and regime stability in Singapore’, The Pacific Review, vol. 29, no. 1, pp.1-27.

Singapore Law Committee 2015, Free trade agreements: Singapore legal developments, Web.

Tan, KP 2012, ‘The ideology of pragmatism: neo-liberal globalisation and political authoritarianism in Singapore’, Journal of Contemporary Asia, vol. 42, no. 1, pp.67-92.

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1. IvyPanda. "Singapore's Political & Legal Business Environment." August 14, 2020. https://ivypanda.com/essays/singapores-political-amp-legal-business-environment/.


IvyPanda. "Singapore's Political & Legal Business Environment." August 14, 2020. https://ivypanda.com/essays/singapores-political-amp-legal-business-environment/.


IvyPanda. 2020. "Singapore's Political & Legal Business Environment." August 14, 2020. https://ivypanda.com/essays/singapores-political-amp-legal-business-environment/.


IvyPanda. (2020) 'Singapore's Political & Legal Business Environment'. 14 August.

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