global country report

A GLOBAL/COUNTRY STUDY REPORT

ON “Travels & Tourism”

IN PARTIAL FULFILMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATIOIN

In

Gujarat Technological University

UNDER THE GUIDANCE OF Nishant Vachhani

Submitted by:

Sorthiya Hetal (ENR No.:107870592025)

Hirani Sagar (ENR No.:107870592013)

Makawana Kevin (ENR No.:107870592004)

Parmar Ashish (ENR No.:107870592055)

Kukadiya Ravi (ENR No.:107870592035)

Zala Shivrajsinh (ENR No.:107870592045)

Batch: 2010-12

MBA SEMESTER III/IV

ATMIYA INSTITUTE OF TECHNOLOGY & SCIENCE

DEPARTMENT OF MANAGEMENT RAJKOT (IN-Gujarat)

MBA PROGRAMME

AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY Ahmadabad

iii

DECLARATION

We undersigned the student of Department of Management, IVth Semester hereby declare

that the “GLOBAL COUNTRY REPORT” entitled “TRAVELLS AND TOURISM” is our own

work and has been carried out under the guidance of Prof. Nishant Vachhani of

DEPARTMENT OF MANAGEMENT, ATMIYA INSTITUTE OF TECHNOLOGY & SCIENCE,

Rajkot (IN-Gujarat)

This has not been submitted to any other university for securing in any examination.

(Hetal Sorathiya)_________________

(Ashish Parmar)_________________

(Kevin Makwana)________________

(Sagar Hirani)___________________

(Ravi Kukadiya)__________________

(ShivrajSinh Zala)________________

Place: Rajkot

Date: ________

iv

PREFACE

The excellent opportunity for any management student is to know about the actual

managerial work of any industry. “Practice makes man perfect.” In this perspective, it is the

necessity of practical training for every MBA student to support and to expand the deep

sense of practical management work.

The aim and purpose behind this industrial training is to lead the student to get more

efficiently skills and the knowledge of real managerial work/practices, which may help them to

become a successful manager.

Management field is like a coin. It has two sides one is theoretical and another is practical

management approach. Both are very necessary aspect to learn for management students.

As a part of practical approach, Global Country Report is very important for the management

students.

As a Management Student It was great opportunity for me to explore such a big and vibrant

company. In addition, we tried our level best to make this Report most successful. I got very

cordial support from all the Persons who shared their working experience with us; and it

become a precious reminiscence for us.

v

ACKNOWLEDGEMENT

We are heartily thankful to Mr. Nishant Vachhani (Faculty Member) for his constant

encouragement for assistance in preparing project report. I would also be thankful to Dean

Dr. Vikas Arora who has provided me an opportunity and valuable support for the project

work.

A project of this nature calls for intellectual nourishment and professional help from many

people. We therefore, deeply express my gratitude to all the professors of my college and

special Mr. Nishant Vachhani who guided me and even helped me in completing my project.

We finally express my gratitude to all those who directly or indirectly rendered the assistance,

guidance and support for the project undertaken by us.

Last but not the least, we are greatly indebted to God, Parents, Family members and Friends

without whose blessing and guidance we think we could not have reached this moment in our

life.

(Hetal Sorathiya)_________________

(Ashish Parmar)_________________

(Kevin Makwana)________________

(Sagar Hirani)___________________

(Ravi Kukadiya)__________________

(ShivrajSinh Zala)________________

Place: Rajkot

Date: _______

vi

TABLE OF CONTENTS

Particulars Page No. Declaration…………………………………...………………………..............................iii

Preface……………………………………….…………….............................................iv

Acknowledge.…………………………………………………………………..…...........v

PART I: ECONOMIC OVERVIEW OF SINGAPORE: 01

1. Economic Overview of Singapore 02

1.1 Demographic Profile 02 1.2 Economic Overview 04 1.3 Overview of Industries Trade and Commerce 07 1.4 Overview of Different Economic Sectors of Singapore 12 1.5 Overview of Business and Trade at International Level 14 1.6 Present Trade Relations and Business with India 16 1.7 PESTAL Analysis 18 PART-II TRAVELS & TOURISM SPECIFIC STUDY: 22

2. Travels & Tourism in Singapore 23

2.1 Introduction 23 2.2 Business Structure 28 3. Comparative Position of Travels & Tourism with India 33

4. Policies and Norms 34

4.1 Policies and Norms of Singapore 34 4.2 Policies and Norms of India 40

5. Business Opportunities in Future 44

6. Conclusion & Suggestions 45

7. Bibliography 46

“AITS, DEPARTMENT OF MANAGEMENT” 1

PART-I

ECONOMIC OVERVIEW OF THE SINGAPORE


1. ECONOMIC OVERVIEW OF THE SINGAPORE

1.1 DEMOGRAPHIC PROFILE

Population: 4,740,737 (on July 2011 )

Age structure: 0-14 years: 13.8% (Male 338,419 & Female 314,704)

15-64 years: 77% (Male 1,774,444 & Female 1,874,985)

65 years and over: 9.2% (Male 196,101 & Female 242,084)

Median age: Total: 40.1 years

Male: 39.6 years

Female: 40.6 years

Population growth rate: 0.817% (2011 EST.)

Birth rate: 8.5 births/1,000 population (2011 EST.)

Death rate: 4.95 deaths/1,000 population (July 2011 EST.)

Net migration rate: 4.63 migrant(s)/1,000 populations (2011 EST.)

Urbanization:

1. Urban population: 100% of total population (2010)

2. Rate of urbanization: 0.9% annual rate of change (2010-15 EST.)

Sex ratio: At birth: 1.077 male(s)/female

under 15 years: 1.08 male(s)/female

15-64 years: 0.95 male(s)/female

65 years and over: 0.81 male(s)/female

Total population: 0.95 male(s)/female (2011 EST.)

Infant mortality rate: Total: 2.32 deaths/1,000 live births

Male: 2.52 deaths/1,000 live births

Female: 2.11 deaths/1,000 live births (2011 EST.)


Life expectancy at birth: Total population: 82.14 years

male: 79.53 years Female: 84.96 years (2011 EST.)

Nationality: Noun: Singaporean(s)

Adjective: Singapore

Ethnic groups: Chinese 76.8%

Malay 13.9%

Indian 7.9%

other 1.4% (2000 census)

Religions: Buddhist 42.5%, Muslim 14.9%, Taoist 8.5%, Hindu 4%, Catholic 4.8%,

Christian 9.8%, other 0.7%, none 14.8% (2000 census)

Languages: Mandarin (official) 35%

English (official) 23%

Malay (official) 14.1%

Hokier 11.4%

Cantonese 5.7%

Teaches 4.9%

Tamil (official) 3.2%

Chinese dialects 1.8%

other 0.9% (2000 census)

Literacy: age 15 and over can read and write

Total population: 92.5%

Male: 96.6%

Female: 88.6% (2000 census)

Education expenditures: 3% of GDP (2009)

Maternal mortality rate: 9 deaths/100,000 live births (2008)

Children under the age of 5 years underweight: 3.3% (2000)

Health expenditures: 3.9% of GDP (2009)

Physicians density: 1.833 physicians/1,000 population (2009)

Hospital bed density: 3.14 beds/1,000 population (2008)


1.2 ECONOMIC OVERVIEW

Basic Economic Facts:

GDP (at 2005 market prices): S$284.561bn (2010) (US$230.8bn 2010)

GDP per capita: S$59,813 (US$48,514 2010)

Annual Growth: 14.5% (2010)

Inflation: 2.8% (2010)

Major Industries: Manufacturing (particularly electronics, engineering, biomedical

sciences and chemicals), financial and business services, and commerce.

Singapore is a model of economic development. After independence in 1965, it had achieved

almost uninterrupted growth nearly 8% per annum for over 3 decades. By the 1990s, it had

GDP per capita similar to many OECD countries and was acknowledged as one of Asia's

'tigers'. The contrast between Singapore and some of its regional neighbors is all the more

striking given to its size and lack of natural resources.

Singapore was one of the original "Newly Industrialized Countries" (NICs) along with Hong

Kong, South Korea and Taiwan. Between 1960s to the 1980s, the manufacturing industry

able to attract numbers of Multi-National Companies (MNCs) and Foreign Direct Investment

(FDIs) into the country. This became the base for Singapore to grow into one of the most

advanced and technologically driven economies in the world.

For 2011, the Singapore economy is continuously growing but at a more sustainable rate of 5

to 6%, with services playing a larger role. The first half of 2011 has already seen a growth of

4.9%. Economic activity is likely to grow moderately in the second half of the year, with the

prospect of a technical recession in the 3 quarter of 2011. Over the medium phrase,

policymakers aim to sustain annual GDP growth at 3-5%. In 2010‟s performance is seen as

the peak of recovery growth and the pre-crisis rates averaging over 8% from 2004-2007 are

not considered sustainable.

In 2010, Singapore was the 3rd fastest growing economy in the world behind Qatar and

Paraguay with a real GDP growth rate (constant prices, national currency) of 14.471%.


The economy of Singapore is described as a mixed economy. Although the country had

strongly advocates free-market policies and practices, government interference is also

obvious in macroeconomic management and major factors of production such as land, labor

and capital resources. This pioneering and highly successful economic system where both

the market and the state have equally strong roles in the government is dubbed as the

Singapore Model.

Singapore has a relatively small domestic market, and thus opens its economy to external

markets in order for the economy to succeed. However, the inherent exposure in depending

on external markets compelled the government to pass economic policies that would

safeguard the country from hurdles faced in the global market. Apart from these policies, the

government has also actively encouraged new industries to develop in Singapore so as to

respond to the needs of the global market.

The essential influence of the government can also be felt in other various sites of the society

from education, to transportation, to housing and to media. However, many social policies

have been implemented are often seen to be added for the economy. As such, many people

have labeled the country as “Singapore Inc.” where, the country appears to run more like a

corporation than a nation.

The Singapore Model or “Singapore Inc.” has proved to be an extremely successful. Globally

and regionally, the Singapore economy has demonstrated Marvelous flexibility to financial

crises such as the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis.

Singapore is also the only Asian country to have AAA credit ratings from all 3 major credit

rating agencies – Standard & Poor‟s, Moody‟s and Fitch. According to the 2011 Economic

Freedom, Singapore is the 2nd free economy in the world. Singapore‟s business freedom

score is incredibly high it takes only 3 days to start a business in Singapore compared to the

world‟s average of 34 days. Apart from strong business and rigid policies, other factors such

as the country‟s strategic geographic position, vast natural seaport, highly skilled workforce

and a favorable tax regime, have created a conducive business environment for companies

and industries.


Singapore has geostrategic importance in Asia. After the British colonized Singapore in 1819,

the nation quickly became the centre of the trade route between India and China. Today

Singapore is the busiest port in the world, above Rotterdam and Hong Kong. Many Multi-

National Companies (MNCs) have set up their regional headquarters in Singapore, due to its

high extent of globalization and accessibility to other markets.

For 2011, the Singapore economy is expected to continue growing but at a more sustainable

rate of 5 to 6%, with services playing a larger role. The first half of 2011 has already seen a

control of growth to 4.9%. Economic activity is likely to grow moderately in the second half of

the year, with the prospect of a technical recession in the 3rd quarter of 2011. Over the

medium term, policymakers intend at supporting annual GDP growth at 3-5%. 2010‟s

performance is seen as to hit the highest point of recovery growth and the pre crisis rates

averaging over 8% from 2004 to 2007 are not considered sustainable moreover.

After focusing the growth of last two years, Singapore is now facing inflation as its key

macroeconomic challenge for 2011. Rising cost led to inflation getting 5.8% in August 2011,

the highest since October 2008. This is expected to remain slightly over 5% in the next few

months, and the average between 4% and 5% for the full year of 2011.


1.3 OVERVIEWS OF INDUSTRY TRADE AND COMMERCE

Singapore is an attractive destination for trade and commerce. The City provides investors

with many tax and nontax incentives. It allows for broad freedom of commercial activity, has

a well developed infrastructure, an educated and productive workforce and political and

economic strength. In 1960, trade and commerce constitute the economy's primary basis of

development, reflecting the nation's role as Southeast Asia's foremost entry.

The Government pursued a policy of Industrialization through an export-oriented strategy, by

attracting foreigners to invest in Singapore to develop the manufacturing and financial

sectors.

The Singapore government encourages International business and investment by keeping

regulations to a minimum. Foreign investors can also import capital or raise funds locally. The

Government allows the movement of both capital and profit liberally within and outside the

country. In Singapore there is no capital gain tax, turnover tax, value added tax, development

tax or surtax on imports into Singapore.

The Government also brought improvement in the labor climate and investment environment

by enacts the Employment Act to lay down standards of employment to help and resolve

industrial disputes.

In addition, the National Trades Union Congress (NTUC) and National Wage Council (NWC)

also helped to promote better labor Management relations. The Government took various

initiatives to develop key infrastructure, including the establishment of the Jurong Town

Corporation.

The important role that international companies play in the economy of Singapore is another

important change. The growth of the manufacturing sector is an indication to it.

Over a period of time, the magnificent acceleration of growth reflected the shift to greater

export orientation of local firms and the arrival of multinational corporations with kicks to the

world markets.


Industry Trade & Commerce

Administrative & Support Services

Part of the Services industry, this sub-sector includes businesses that offer cleaning,

maintenance & landscaping, events & exhibitions, investigation & security, manpower

recruitment and travel & tours services.

Arts, Entertainment & Recreation

Types of Business in This Industry

Arts, Dramatic Arts & Music

Entertainment & Recreation

Gardens & Nature Reserves

Museums, Galleries & Cultural Venues

Sports & Fitness.

Food & Beverage (F&B)


Cafes

Coffee Houses & Snack Bars

Coffee Shops

Eating Houses & Food Courts Fast Food Restaurants

Food Caterers

Restaurants


Infocom


Film

Radio & TV

IT Services & Telecom

Publishing (Print & Digital)

Manufacturing


Biomedical Manufacturing

Chemicals

Electronics

Food Manufacturing

Furniture

Precision Engineering

Printing

Textile & Apparel

Transport Engineering.

Private Education

Private schools (including Kinder gardens) providing General, Technical and Commercial and

other Educational service.


Academic Private Schools, Non-Academic Private Schools, Kindergartens/Pre-

Schools.


Private Healthcare


Hospitals

Western Clinics & Pharmacies

Dental Clinics

Nursing Facilities & Home Healthcare

Traditional Chinese Medicine Practices

Professional Scientific & Technical Services


Advertising

Architectural & Engineering Design

Legal & Accounting

Management Consulting

Veterinary

Real Estate, Rental & Leasing Services

Part of the Services industry, this sub-sector includes businesses in the real estate and rental

& leasing services.


Real Estate.

Rental & Leasing.


Transport & Storage


Boat, Ferry & Cruise Services

Bus, Taxi & Trishaw Services, Car park Operators

Freight & Logistics

Postal & Courier Services

Shipping & Ship-Related Services

Storage & Warehousing.

Wholesale Trade

Wholesale trades of Food & Beverage, Agricultural Produce, Tobacco, Household Goods,

Fuels and Chemicals, Machinery Equipment, Motor Vehicles, etc.

The wholesale industry consists of 5 other sub-sector

Agricultural Materials

General Merchandise

Fuels & Chemicals

Transport Equipment

Other Wholesalers.


1.4 OVERVIEW OF DIFFERENT ECONOMIC SECTORS OF SINGAPORE

Petroleum and petrochemicals: It is another base of Singapore's industrial and

economic life. Singapore has the 3rd largest oil refinery in the world, after Rotterdam

and Houston. The Singapore Petroleum Company (SPC) is a foremost player in the

petroleum industry and occupied in exploration, production, refining and distribution.

Remarkably, despite of not having a single drop of definite oil reserves in the country,

Singapore is a net exporter of oil exporting 1.374million of barrels /day and importing

1.195 million barrels/day. This makes Singapore the 18th largest exporter of oil in the

world.

Finance Industry: Singapore‟s banking system is considered to be the strongest

system in the world. Singapore also has the 4th largest foreign exchange market in the

world after London, New York and Tokyo. The Singapore Government Securities is

the only Asian market, as well Japan, to be part of Citigroup World Bond Index.

Singapore is also recognized as one of the premier asset management centers in Asia

with more than 200 international asset management firms.

Pharmaceutical: Biomedical and pharmaceutical manufacturing promises to be the

next progression of the manufacturing industry in Singapore. Also, new government

initiatives have been introduced to encourage new industries while maintaining and

strengthening present industries through the use of advanced technology.

Tourism: It is the other major service industry available in Singapore. In 2010, tourist

arrivals to Singapore hit a record of 11.638 million visitors with tourist revenue of more

than S$18.8 bn. With the beginning of the two new integrated resorts in 2010, tourism

expenditure in sightseeing and entertainment grow by an astonishing 1.834% in 2010.


Telecommunication: Telecommunications and Internet facilities are state-of-the-art,

providing high-quality communications with the rest of the world. Radio and television

stations are all ultimately government-owned or government-linked. The print media is

dominated by a company with close ties to the government. Daily newspapers are

published in English, Chinese, Malay, and Tamil.

Transportation: The International Maritime Bureau reports the territorial and offshore

waters in the South China Sea as high risk for piracy and armed robbery against

ships; numerous commercial vessels have been attacked and hijacked both at anchor

and while underway; hijacked vessels are often disguised and cargo diverted to ports

in East Asia; crews have been murdered or cast adrift

1. Port: The Port of Singapore, with 6 free-trade zones, is ranked second in the world in

terms of container traffic. It is operated by Maritime and Port Authority of Singapore. It

is also the world's busiest hub for transshipment traffic.

2. Airport: The airport of Singapore (international Changi airport) is considered as one of

the best in the world. It is composed of two air terminals connected by monorail.

3. Road: The road network consists of 8 highways. The objective of the Land Transport

Authority (LTA), (under the Ministry of Communication and Information technology), is

to promote ground transport for a better use of the city by developing public transport.

The construction of 9 expressways and two highways (partially subterranean) of a total

length of 155 km is in progress in the Eastern part of the island.


1.5 OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL

Singapore‟s foreign policy has been designed to ensure a regional balance. Singapore was a

founder member of ASEAN countries in 1967 and has worked hard to maintain good

relations with regional neighbors. It hosted the 13th ASEAN summit in November 2007.

Relations with China have intensified the following opening of diplomatic relations in 1990.

I. Singapore's Relations with the International Community :

Singapore is an active player at International stage through its membership of the UN,

the Commonwealth, ASEAN, APEC, and WTO. Singapore served for the first time to the

United Nation Security Council in 2001 and 2002. Prime Minister Goh was the powerful force

behind biennial Asia Europe Meetings (ASEM). Singapore was one of the 5 ASEAN countries

that participated in the EU/ASEAN Aceh monitoring mission. Singapore‟s position as a

trading nation, Singapore is a strong supporter of free trade and uses its membership of

APEC and the WTO for progress in this area. Singapore was the Chair of APEC in 2009.

The matter was "Sustaining Growth, Connecting the Region", and focused on facilitating

trade and investment in the Asia-Pacific region, measures to support economic growth,

address the global economic crisis, accelerate regional economic integration, and resist

protectionism.

II. Singapore's Relations with different countries :

Since the 1960s, Singapore has adopted a policy of export-oriented industrialization;

promote the export of goods and services in the international markets with few barriers

against the import of goods and services, though the government's well-known dominant

policy in the regulation and possession of many Singapore companies has been widely

criticized. Singapore doubled its exports, from US$52.752bn in 1990 to US$118.268bn, in

1995. Exports curved in after 1997, but recovered to reach US$137 billion in 2000. US is

Singapore's single largest trading partner, accounting for 19% of all exports in 1999, primarily

from the trade of manufactured electronics and computer peripherals. A large part of exports

originates from U.S. owned companies, which is traditionally the largest investor in the

Singapore economy. Neighboring country Malaysia is the second largest export market,

accounting for 17% of total exports. Hong Kong & Japan are also important export

destinations, accounting for 8% and 7% of exports respectively. Other important associates


include Taiwan, Thailand, the United Kingdom, the Netherlands, China, South Korea, and

Germany.

The U.S and Japan are the largest suppliers of imports to Singapore, with both countries

supplying 17% of imports. Malaysia remained one of the traditional sources of imports,

accounting for 16%.

Imports from Malaysia include consumer goods like foodstuffs and raw materials. China

(5%), Thailand (5%), Taiwan (4.0%), Saudi Arabia (3%), and Germany (3%) are the other

sources of imports. In 2000, the value of imports totals US$127 billion.

Singapore's government considers the development of free trade as an important aspect for

the country's future economic growth. Singapore strongly support free trade negotiations

between the members of the Asia Pacific Economic Cooperation organization (APEC), tried

to remove trade barriers between member countries, including the U.S, Canada, Japan,

Australia, and others. Singapore is also strongly supported by the creation of a regional free

trade zone for the Association of South East Asian Nations (ASEAN), to be known as the

ASEAN Free Trade Zone (AFTA). In 2001, Singapore announced its objective to discuss

bilateral free trade arrangements with Australia, Canada, Japan, and the United States.

Singapore‟s international trade increase during the last 3 decades of the 20th century, when

the country managed its trade balance to achieve a trade surplus of US$10billion by 2000.

Singapore demonstrated its resistance to the sharp oil price rises in 2000-2001 however it

faces increasing competition from neighboring countries and has become susceptible to

changes in global market demands for electronic products. Nevertheless, political and

economic uncertainty in neighboring countries such as Indonesia, Philippines, and Thailand

have strengthened Singapore's position, confirming its image as one of the most stable and

business-friendly countries in the region.


1.6 PRESENT TRADE RELATIONS AND BUSINESS VOLUME OF

DIFFERENT PRODUCTS WITH INDIA

The bilateral relations between the Republic of India and the Singapore have been

traditionally strong, enjoying extensive cultural and commercial relations. In recent years,

India and Singapore have sign the Comprehensive Economic Cooperation

Agreement (CECA) to increase trade, investments and economic cooperation to expanded

bilateral cooperation on maritime security, training forces, conducting joint exercises,

developing military technology and fighting terrorism.

India and Singapore share cultural, commercial and strategic relations, with Singapore being

a part of the "Greater India" cultural and commercial region. More than 3 lakh people of

Indian origin live in Singapore. After independence in 1965, Singapore was concerned with

China-backed communist threats as well as domination of Malaysia and Indonesia and

looking forward a close strategic relationship with India, which saw as a counter balance

to Chinese influence. Singapore had always been an important trading hub, giving India trade

access to Malay Archipelago and the Far East. Although the positions of both nations over

the Vietnam War and the Cold War caused terror between India and Singapore, their

relationship expanded significantly in the 1990s; Singapore was the first to respond to India's

"Look East" Policy of expanding its economic, cultural and strategic tie up in Southeast

Asia to strengthen its standing as a regional power.

Ever since Singapore's independence, both nations have maintained high level contacts.

Between 1966-1971 the PM of Singapore Lee Kuna Yew visited to India three times in(1966,

1970 and 1971). Then the Indian Prime Minister Indira Gandhi visited Singapore in 1968, as

Indian leader Morarji Desai did. Singapore supported India to become a permanent member

of the U.N. Security Council to expand its role and influence in the Association of Southeast

Asian Nations (ASEAN). Singapore also supported India in war against Pakistan in 1965 and

the Kashmir conflict.

Military cooperation between the two nations had been hindered by their policy differences in

the Cold War period. In 2003, India and Singapore signed a bilateral agreement to expanding

military cooperation, conducting joint military training, developing military technology and

http://en.wikipedia.org/wiki/Republic_of_India

http://en.wikipedia.org/wiki/Republic_of_Singapore

http://en.wikipedia.org/wiki/Comprehensive_Economic_Cooperation_Agreement



http://en.wikipedia.org/wiki/Maritime_security

http://en.wikipedia.org/wiki/Terrorism

http://en.wikipedia.org/wiki/Greater_India

http://en.wikipedia.org/wiki/Communist

http://en.wikipedia.org/wiki/Malaysia

http://en.wikipedia.org/wiki/Indonesia

http://en.wikipedia.org/wiki/People%27s_Republic_of_China

http://en.wikipedia.org/wiki/Malay_archipelago

http://en.wikipedia.org/wiki/Far_East

http://en.wikipedia.org/wiki/Vietnam_War

http://en.wikipedia.org/wiki/Cold_War

http://en.wikipedia.org/wiki/India%27s_%22Look_East%22_Policy



http://en.wikipedia.org/wiki/Southeast_Asia



http://en.wikipedia.org/wiki/Regional_power

http://en.wikipedia.org/wiki/Prime_Minister_of_Singapore

http://en.wikipedia.org/wiki/Lee_Kuan_Yew

http://en.wikipedia.org/wiki/Indian_Prime_Minister

http://en.wikipedia.org/wiki/Indira_Gandhi

http://en.wikipedia.org/wiki/Morarji_Desai

http://en.wikipedia.org/wiki/U.N._Security_Council



http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations



http://en.wikipedia.org/wiki/Indo-Pakistani_War_of_1965

http://en.wikipedia.org/wiki/Kashmir_conflict

http://en.wikipedia.org/wiki/Cold_War


achieving maritime security. The Singapore Navy and the Indian Navy have conduct joint

naval training since 1993 such as SIMBEX and MILAN near India's Andaman and Nicobar

Islands. India and Singapore have also expanded their assistance in fighting terrorism.

Singapore is the 8th largest source of investment in India and the largest ASEAN member

nations and India's 9th biggest trading partner as of 2005-06. Its cumulative investment in

India is US $3 billion as of 2006 and it is expected to rise to US $5 billion by 2010 and US

$10 billion by 2015. India's economic liberalization and its "Look East" policy have led to a

major expansion of bilateral trade, which grew from US $2.2 billion in 2001 to US 9-10 billion

in 2006, 400% growth in span of 5 years and to US $50 billion by 2010. Singapore account

for 38% of India's trade with ASEAN member nations and 3.4% of its total overseas

trade. India‟s main Exports to Singapore in 2005 include petroleum, gemstones, jewellery,

machinery and Imports from Singapore include electronic goods, organic chemicals and

metals. More of the Singapore‟s exports to India are basically "re-exports" that had been

imported from India.

In 2005, both the nations had signed the Comprehensive Economic Cooperation Agreement

(CECA) and have organized the India-Singapore Parliamentary Forum and the India-

Singapore Partnership foundation with active support from the Federation of Indian

Chambers of Commerce and Industry (FICC), the Confederation of Indian Industry (CII) and

the Singapore Business confederation to promote trade, economic development and

partnerships. The CECA eliminated tariff barriers, double taxation, duplicate processes and

regulations and provided unconstrained access and cooperation between the banks and

financial institutions of Singapore and India. The CECA has highly developed bilateral

cooperation over education, science and technology, intellectual property, aviation and

relaxed visa system for Indian professionals in information technology, medicine, engineering

and financial fields to emigrate and work in Singapore. Singapore has invested in projects of

India to upgrade India's ports, airports and developing information technology parks and

a Special Economic Zone (SEZ). India has become Singapore's 4th biggest tourist Place and

more than 6 Lakhs Indians visited Singapore in 2006. Both nations have worked to gather to

collaborate on aviation, aerospace engineering, space programmers, information technology,

biotechnology and energy.

http://en.wikipedia.org/wiki/Maritime_security

http://en.wikipedia.org/wiki/Singaporean_Navy

http://en.wikipedia.org/wiki/Indian_Navy

http://en.wikipedia.org/wiki/Andaman_and_Nicobar_Islands



http://en.wikipedia.org/wiki/Terrorism

http://en.wikipedia.org/wiki/Petroleum

http://en.wikipedia.org/wiki/Federation_of_Indian_Chambers_of_Commerce_and_Industry



http://en.wikipedia.org/wiki/Confederation_of_Indian_Industry

http://en.wikipedia.org/wiki/Tariff

http://en.wikipedia.org/wiki/Intellectual_property

http://en.wikipedia.org/wiki/Aviation

http://en.wikipedia.org/wiki/Visa_(document)

http://en.wikipedia.org/wiki/Information_technology

http://en.wikipedia.org/wiki/Information_technology

http://en.wikipedia.org/wiki/Special_Economic_Zone


1.7 PESTEL ANALYSIS:

Political Environment

The political structure of a country inevitably affects the way business operates, as it is the

political conditions that will enact laws, sets regulations and policies.

Singapore‟s parliamentary democracy is well known for creating a stable and orderly

government. The government provides first rate efficiency and excellence in the public

service sector, assuring that any local or foreign individual wish to incorporate a company

can efficiently conduct business without disambiguation and bureaucratic delays.

Singapore is also renowned for it‟s extremely low corruption levels within the government and

it system.

A. Recent Political Developments:

Despite a drop in support for the party at the 2011 Election, the PAP retains an overwhelming

majority in parliament. The government is characterized by conservative, but extremely

effective and flexible management of the economy.

Lee Hsien Loong (son of Lee Kuan Yew, Singapore‟s first Prime Minister), succeeded Goh

Chok Tong as Prime Minister on 12 August 2004. Lee Kuan Yew is still with Singapore and

recently sat in Cabinet as „Minister Mentor‟ in the PM Office. Lee Kuan Yew‟s successor, Goh

Chok Tong, also remained in the Cabinet between 2004 and 2011 as Senior Minister.

B. Elections:

General Elections were held on 7th May 2011 and the Cabinet was reshuffled on 11th May

with the retirement of Minister Mentor Lee Kuan Yew, Senior Minister Goh Chok Tong and

several other seniors. A Presidential Elections was held on 27th August 2011, after which Dr.

Tony Tan succeeded S.R. Nathan as President of Singapore on 1 September.


Economic Environment

Singapore‟s economy has shown continued flexibility against most global crisis, and has

rebounded with a record 13% growth from the recent global economy downturn.

This rebound not only showed that the Singapore‟s forward looking and alert damage control

measures are always in the working place, it also shows the potential of even biggest growth

in Asia‟s top leading financial market.

Here are some economic indicators that will help you to forecast possible future movement of

the economies:

Potential customer’s spending power

Potential supplier’s pricing

Interest rate

Consumer price index

Retail sales index

Wholesale and manufacturing indices

Inflation rate

Exchange rate

Singapore‟s economical policies on national income, labor market, productivity,

investment commitment, and external trade are consistently fine tuning their plans to adjust in

a dynamic and changing Asian market in order to meet business growth.


Social Environment

Successful enterprises often leverage on developed and integrated social communities. The

education level of people, work habits, culture, leisure activities and the role of women in the

workforce will affect the vulnerability of a business entity.

Singapore boosts one of the most competitive and a well-educated workforce in the world,

and it is renowned for its efficiency.

Its multi-cultural and Internationalism society makes it extremely easy for international and

regional investors to set up their headquarters in Singapore as a starting point to reach Asian

market.

The Singapore government‟s motto “Live, work and play” ensures that a variety of business

can successfully operate in their chosen industries, with the right human resource boosting

business growth.

Technological Environment

Singapore, described as a “plug and play” nation, is ranked number 3 as the most wired

nation in the world, and the most wired in Asia, with a broadband network covers 99% of the

population.

Singapore‟s electronics, pharmaceutical and biomedical industries progress rapidly for both

national and regional economy.

In past few years, the country has been the innovator to set up several technological

research institutes to build better and green business infrastructure.

Technological advances led to fast turnaround times for retailers and consumers, hassle free

financial transactions, as well as the creation of new products at competitive rates.

The World Economic Forum ranked Singapore the top 10 in the world for network readiness

in 2002.


Ecological Environment

A long with technological advances, Singapore‟s push to integrate green technology into its

society has reaped many benefits.

Environmentally-friendly infrastructures such as Fusion polis, ION, Orchard Central are some

of the recent landmark achievements in the nation‟s attempt to reduce its carbon footprint.

The government has also laid out plans to build institutes researching green technology and

growing a pool for local talents to focus on improving business infrastructure while protecting

the environment.

Mass Rapid Transit – Singapore‟s public transport system, utilizes electricity to run, and a

plan has been launched to integrate the use of solar energy in Small & Medium Business and

domestic households.

An Anti-Pollution act is also in the place to oversee the impact of growing industries in

Singapore.

Legal Environment

Singapore has a standard law that has to be strictly followed and entrepreneurs must abide

by government standards on working hours, minimum wages, industrial production and

taxation. Business Law includes the Employment Act, Taxation Act and the Central Provident

Fund (CPF) Act.

The various taxes paid by businesses such as sole proprietorship, companies and Goods

and Service Tax have a direct impact on firms.


PART-II

TRAVELS & TOURISM SPECIFIC STUDY


2. TRAVELS & TOURISM IN SINGAPORE

2.1 INTRODUCTION

Singapore, the city of diverse culture & tradition, brilliances of art, technology & magnificent

architecture, the natural beauty along with exotic food from different countries and

affectionate hospitality makes it one of the tourist destinations of the world today, no wonder

Singapore is considered as the paradise by the tourist around the world.

This city has everything for the visitors to cherries from sky touching scrapers, shopping

malls, restaurants, Cuisines to the deep blue sea diving to watch life under water, from heart

agonizing natural beauty of island, nightlife, monuments to breath taking roller-costar ride.

With a visit to this beautiful island city of Singapore every visitors takes with them full of

memories to share and smile.

Some of the most beautiful and attractive places to visit while on a trip to the city other than

the stylish malls and superb dinning places are Singapore Zoo which houses over 350 spices

of animals and reptiles that roam about the reserved large parkland of more than 28 hectors.

Visitors are entertained by the thunderous roaring of tigers, summersaults of chimpanzees

and other monkeys, riding the Asian elephants and watching the rhinos lock their isolated

horns could be thrilling for all.

The different themes and rhymes sung by over 9000 chirping birds at Jurong bird park, one

of the largest and incredible bird parks in southeast Asia would surely attract and make every

traveler sing alone time to learn some birds languages.

Santosa Island has all the facilitation for tourists to make it a pleasurable experience in

Singapore. The beautiful resorts and luxurious hotels, spa, green lush golf course, exotic

dining halls, theme parks and beaches with festivals around the year makes Singapore tour

complete and memorable. To be on this island to enjoy the worldwide studio could also be a

dream come true for all the movie lovers.


Escape theme park for those who love to shout and scream their hearts out, this theme park

in Singapore with a huge range of thrilling and exciting rides and fun-fare games entertain

every visitor with both dry and wet water games and rides. Asian civilization museum a

variety of the National Museum of Singapore offers historical exhibitions and shows on the

culture evolution of Asia, Its origin and civilization. The display of admirably preserved

historical collections at these museums makes every visitors wonder and fall in the divine

history of time.

The Adventure board of Singapore tourism has many more attractive places including

the Pulau Ubin, a small island at the north east cost of Singapore. Kent Ridge Park a large

beautiful park covered with Acacias, Tembusus and other plant habitats. The view of island,

green plants and birds in this park fills one serene peace and completeness.

Welcome To Singapore!


SINGAPORE ATTRACTIONS:

Singapore River

The Singapore River was the lifetime of Singapore where first immigrants eked out a

meagre living and saw Singapore transform from an obscure little fishing village to a great

seaport. Highlights on the River banks of the Singapore River include Boat Quay and

Clarke Quay.

Arab Street

The Muslim centre of Singapore is a traditional textile district, full of batiks from Indonesia,

silks, sarongs and shirts. Add to this mix rosaries, flower essences, hajj caps, songkok

hats, basket ware and rattan goods, and you have a fair idea of the products haggled over

in this part of the city.

The grand Sultan Mosque is the biggest and liveliest mosque in Singapore, but the tiny

Malabar Muslim Jama-ath Mosque is the most beautiful. There is fine Indian Muslim food

along nearby North Bridge Road and the food stalls on Bussorah Street are especially

atmospheric at dusk during Ramadan.

Orchard Road

For shopping, Orchard Road is the ideal place to spend a day there. The bustling

shopping centres sells everything from the most fashionable and outrageous shoes and

clothes to precious gems, eyewear and accessories. And when the shopping gets a little

exhausting, revitalize yourself at one of the many restaurants and eating outlets.

Holland Village

Holland Village is one of the favourite haunts of the expatriate community and Singapore

young and trendy. For food and entertainment, there is a mix of old coffee shops and ritzy

wine bars; its colourful blend of foreign shops and local mixed trade as well as its many

ethnic restaurants and fast-food outlets. Here you‟ll find an eclectic collection of goods

from straw brooms to valuable antiques and movie memorabilia.


Chinatown

Experience the sights and sounds of Chinatown: medical halls mix snake skin, herbs and

spices and other exotic ingredients into potions for all ailments; traditional delicacies like

sea cucumbers lie drying in the street; fruit sellers squat near mounds of rambutan,

strong-smelling durian, mangosteen and other seasonal fruits; fortune-tellers sit at make-

shift tables waiting for eager customers to know their future; hawkers grill thin slices of

pork for passers-by over home-made barbecues.

Changi Village

For a slightly different type of suburban shopping experience, Changi Village is the place

to go for quiet surroundings. It offers a quaint charm of its own, away from the crowds and

traffic for a more relaxed ambience for shopping. The food centre offers great variety of

local food and round off the night by having a beer at Europa Changi.

Jurong Bird Park

Jurong Town, west of the city centre, is a huge industrial and housing area that is the

powerhouse of Singapore economy. This might seem an unlikely spot for a number of

Singapore tourist attractions but it is home for the Haw Par Villa (an incredibly tacky

Chinese mythological theme park), the beautifully landscaped Jurong Bird Park, Chinese

& Japanese Gardens and the hands-on Singapore Science Centre.

Little India

This modest but colourful area of wall-to-wall shops, pungent aromas and Hindi music is a

relief from the prim modernity of many parts of the city. Centred on the southern end of

Serangoon Road, this is the place to come to pick up the framed print of a Hindu god

youve always wanted, eat great vegetarian food and watch streetside cooks fry chapatis.

The Zhujiao Centre is the main market, but there are also interesting spice shops nearby.

The best temples are Veerama Kali Ammam, Sri Srinivasa Perumal and the glitzy Temple

of 1000 Lights.

Sentosa Island

Considered the granddaddy of Singapores parks, Sentosa Island is the city-states most

visited attraction, especially on weekends.


Facts:

• Tourism is the other major service industry available in Singapore.

• In 2010, tourist arrivals to Singapore hit a record high of 11.638 million visitors with

tourist receipts of more than S$18.8 billion.

• With the advent of the two new integrated resorts in 2010, tourism expenditure in

sightseeing and entertainment grew by an astonishing 1,834 percent in 2010.

• Investments and Tourism is the most Developing Industry in Singapore.

• The Singapore Tourism Board aims to triple tourism receipts to $30bn and double

visitor‟s arrivals up to 17 million visitors by 2015.


2.2 BUSINESS STRUCTURE:

Types of Business Structure

The main business structures used in Singapore are:

I. Companies

II. Partnerships, Limited Liability Partnership, Limited Partnerships

III. Representative Office

IV. Trusts

All companies, partnerships and foreign branches have to be registered with ACRA before

they can commence any business.

I. Companies

A limited liability company commonly referred as the most common business structure. The

shares in a company limited to the shareholder‟s liability to the share investment and any

uncalled amount on the shares.

A company can be registered as:

· Private company

A private company has less than 50 shareholders. Can be incorporated with 1 director and 1

shareholder and are exempted to appoint professionally qualified secretaries. A private

company qualify as an exempt private company if it has not more than 20 shareholders and

none of its shares are held by any other company. An exempt private company with an

annual revenue of not more than S$5million is exempted from having their accounts audited.

· Public company

A public company is one with more than 50 shareholders. A company must be registered (or

converted from a private company) as a public company if it raise its capital by offering

shares & debentures to the public. A public company must register a prospectus with the

Monetary Authority before any public offer for shares and debentures. Every incorporated

company of Singapore must have a registered office at which course of action and notices

can be served. The registered office need not be the place for business of a company.


Governing Documents

The Companies Act (“CA“) contains rules of the internal management of a company. Some of

the rules and norms are mandatory for all companies, and some are applicable for the

specific types of companies. Companies may also have their own MOA and AOA to provide

rules for the internal management of the company.

Directors

Every company shall have at least 1 director who is ordinarily resident of Singapore and,

where the company only has 1 member, that individual director may also be the individual

member of the company. The management and control of a company lies with directors and

they may exercise all powers of a company except for any power that the CA or the MOA &

AOA of the company require the company to implement in general meeting of Directors have

various statutory duties under the CA. They are required to be honest and use reasonable

delegates in the discharge of the duties of their office and unmasked potential conflict of

interests. In addition, they should ensure that there is proper accounting and record keeping

to explain transactions and financial position of the company and to facilitate true and fair

profit and loss accounts and balance-sheets should be prepared and presented during the

annual general meetings. Directors may face large fines or imprisonment for breaches of

their duties, as well as personal liability for debts incurred by the company in certain

circumstances.

Incorporating a company

Investors may hold a professional service firm to assist with the incorporation or to acquire a

shelf company from the professional service firm. A shelf company is a company that has

been integrated and not commenced its business or trade. The investors then can change

the company name, the directors and the secretary increase the capital of the company as

required.

Registration requirements and filing procedures for public securities

A public company must register a prospectus with the Monetary Authority of Singapore

before any public offer for shares and debentures. The Prospectus must be prepared

according to the Securities and Futures Regulations. Public companies intend to list its

shares and debentures on the Singapore Exchange (“SGX”) have to submit an application for

the eligibility to list from SGX. The listing requirements are contained in the SGX Listing

Manual.


Audit requirements and practices

All companies (other than exempt private companies) must appoint independent certified

public accountants to audit their annual financial statements.

Shareholding by foreigners

Foreigners are allowed to own shares in Singapore companies, except in a limited number of

industries.

Foreign Companies

Any person who wishes to register a Singapore Branch of a foreign company will need to

engage a professional service firm to with the registration. The CA requires a foreign

company to appoint two local residents as its agents.


II. Partnerships

A partnership is a business firm owned by at least 2 (limited to 20) partners (individuals or

companies). It is not a legal entity and cannot sue or is sued in its own name and it cannot

own or hold any property. The partners are personally accountable for business debts and

losses including the loss caused by another partner.

Limited Liability Partnerships (“LLP”)

LLPs combine the limited liability features of companies along with the operational flexibility

of partnerships. They must have a minimum of 2 partners (individuals or companies).

A LLP is a legal entity and can sue and be sued in its own name and can own or hold any

property. The personal assets of the partners are protected. While partners are not

personally accountable for the wrongful acts of other partners, they can be personally

accountable for debts and losses resulting from their own careless actions.

Limited Liability Partnerships (“LP”)

A LP is a business firm owned by a minimum of 2 partners, with at least 1 general partner

and at least 1 limited partner. The partners can be individuals, Singapore-registered

companies or unregistered foreign companies.

A general partner has unlimited personal liability and can be appointed as the manager of the

LP. The general partner is responsible and liable for all actions, debts and obligations of the

LP. A limited partner is not liable for any debts and obligations beyond his agreed investment

in the LP. If a limited partner takes part in the management of the LP, he will have unlimited

liability as if he were a general partner.

A LP is not a separate legal entity and cannot sue or be sued in its own name and cannot

own or hold any property.


III. Representative Office in Singapore

Foreign companies may set up representative offices to conduct limited business activities

such as market research, feasibility studies and liaison work on their behalf. As the

registration for the representative office is subject to periodic renewal, it is not suitable for

foreign companies wanting to maintain long term operations in Singapore.

IV. Trusts

A trust is an arrangement where a person (called the „trustee‟) holds property for the benefit

of others (called „beneficiaries‟). The trust arrangement may be use for public purposes (e.g.

for charitable objectives) or for private purposes (e.g. for private individuals in wealth

succession planning).


3. COMPARATIVE POSITION OF TRAVELS & TOURISM WITH INDIA

In India, Travel and tourism, as an industry, has been somewhat slower to takeoff than in

many other countries. However, with rising worldwide interest in travel, and with the

Government's encouragement for its activities, it is undergoing huge expansion and

improvement. This forecasts a bright future for all who prefer to make a career on travel and

tourism. Young people with constrain and a capacity for hard work can rise to top positions

very quickly in travel & tourism or even start their own agencies. This Industry gives good

returns in job including opportunity to see many locales at low prices.

The T&T industry in India accounted for approximately 6% of GDP and 30.5 million jobs

(including direct and indirect) in 2008. The Travel and Tourism Competitiveness Report 2009

brought out by World Economic Forum, ranks India as 11th in the Asia-Pacific region and

62nd overall in a list of 133 assessed countries in 2009, up three places since 2008. In terms

of travel, India stands 9th in the index of relative cost of access (ticket taxes and airport

charges) to international air transport services, having almost the lowest costs in the world.


4. POLICIES AND NORMS

4.1 POLICIES AND NORMS OF SINGAPORE

Major Exports and Imports:

The General Agreement on Tariff and Trade (GATT) has ranked Singapore the world‟s 16th

largest importer and exporter. Chemicals & chemical products (i.e. organic chemical and

chemical products, etc), petroleum & products, manufactured goods (i.e. Iron & Steel, Non-

metal mineral manufactures and metal manufactures, etc) machinery & transport equipment

(i.e. Office & Data machine, Telecommunication apparatus and Electrical machine, etc) are

both the main exported and imported items.

Government Policy on Foreign Investment in Singapore:

Singapore recognizes the importance of foreign investments and welcomes foreign investors

to Singapore with open arms. The Economic Development Board (EDB) is the lead

government agency responsible to attract foreign investors with solutions that create value

for investors and companies in Singapore. Singapore believes that competition makes

businesses to be more efficient, innovative and responsive, foremost to effective use of

resources and greater productivity for the economy. Competition Commission of Singapore

(CCS) is the government agency which is responsible for administering the Competition Act.

Intended applications may be made to the CCS for a decision whether a proposed activity

(such as a merger) may infringe the Competition Act.


TAXATION

Introduction

Singapore imposes income tax upon the income of taxable persons (such as companies and

individuals). Gains of a capital nature are not subject to any tax. There is a value added tax

called the Goods and Services Tax (GST) in Singapore. GST is imposed on the purchase of

goods and services. There are also some miscellaneous taxes such as stamp duty and

property tax.

Income Tax

Income Taxation Law and Administration

The Income Tax Act (Cap. 134) is the legislation that imposes income tax and regulates the

collection of income tax. The Comptroller of Income Tax through the Inland Revenue

Authorities of Singapore administers the Income Tax Act (“ITA”).

Fiscal Year

The statutory tax year is referred to as the Year of Assessment (“YA”) and it begins on 1

January and ends on 31 December. The income for a year of assessment is the income for

the preceding calendar year (commonly known as the basis year). For companies with non

31 December financial year ends, they are allowed to use their accounting year instead of the

calendar year as the basis year.

Taxpayers

Individuals and companies that derive taxable income are taxpayers and are liable to income

tax. A trust will have to pay tax at the trustee level unless it is granted tax transparency under

certain circumstances. Partnerships (including limited liability partnerships and limited

partnerships) are transparent for income tax purposes and each partner will be taxed on his

share of the income from the partnership.


Taxable Income Income tax is imposed on the following types of income:

Income from trade, business, profession or vocation;

Employment income;

Dividends, interest or discounts;

Pension, charge or annuity;

Rents, royalties, premiums and any other profits arising from property; and

Any other gains or profits of an income nature.

Essentially all receipts that income in nature are taxable unless specifically exempt under

ITA.

Allowable Deductions

All outgoings and expenses incurred in the production of the income are deductible for

income tax purposes unless the expense (e.g. private plated car expenses) is specifically

disallowed under the ITA. Outgoings and expenses incurred in relation to a capital gain/loss

are not deductible for income tax purposes.

Capital allowances (i.e. tax depreciation) are granted in lieu of accounting depreciation for the

capital expenditure incurred on plant and machinery and industrial buildings used in a trade,

profession or business.

Payment of Tax

Singapore is on an official assessment tax system wherein Notices of Assessment will be

issued after the tax authorities have reviewed the tax return. Income tax is due and payable

one month from the date of the Notice of Assessment. Late payment penalties of up to 17%

of the tax assessed may be imposed for late payment. Taxpayers may arrange for the tax

liability to be paid in instalments.


TAXATION OF COMPANIES

Tax rates

The corporate income tax rate for the YA 2010 (i.e. financial year ending in 2009) onwards is

17%. A partial tax exemption is granted to all companies for the first $300,000 of qualifying

taxable income (“TI”), resulting in an effective tax rate of about 8% on the first $300,000 of TI.

Newly incorporated companies may instead qualify for a separate partial tax exemption which

may reduce their effective tax rate to between 0% - 5.6% on the first $300,000 of TI for their

first three YAs.

Dividends

Dividends distributed by Singapore companies are no subject to any further income tax in the

hands of its shareholders.

Unutilised capital allowances and trading losses

Current year unutilised capital allowances („CA‟) and trading losses may be carried forward

indefinitely and can be used against future taxable profits subject to the “shareholding test”

and the “same business test”.

The shareholding test requires the company to have substantially (50% or more) the same

shareholders on two dates, (i.e. when the trading losses or capital allowances arose and

when they are being utilised). The same business test requires the company to continue the

same trade for which the allowances were granted. Companies who are not able to meet the

shareholding test may apply for a waiver of the test. The Tax Comptroller may grant such a

waiver if he is satisfied that the shareholding change is not for the purpose of deriving any tax

benefit or tax advantage.

Current year unabsorbed capital allowances („CA‟) and trading losses may also be carried

back and used against prior taxable profits subject to the “shareholding test” and the “same

business test”. The carry back is generally limited to one YA (i.e. the YA immediately

preceding the YA in which the capital allowances or trading losses arose) and up to

$100,000. For YA 2009 and 2010 (i.e. financial years ended in 2008 and ending in 2009), the

carry back is increased to 3 YAs and up to $200,000 from each YA.


Group relief

Singapore does not have tax consolidation for companies within the group. As an alternative,

qualifying companies belonging to the same group (under a Singapore incorporated

company) may transfer current year unutilised capital allowances, trade losses and donations

amongst themselves under the group relief system. Only Singapore incorporated companies

with the same financial year-end will qualify for group relief provided the 75% ordinary

shareholding requirement is met.

Interest Deductions

There are no thin capitalisation rules under the ITA. Interest expenses wholly and exclusively

incurred in the production of income is tax deductible. Where the taxpayer has non-income

producing assets such as interest free loans, a portion of the interest expense will be

attributed to such assets and the deduction for the attributed interest will be disallowed.

Repatriation of Profits and Transfer Pricing

Payment of interest, management fees, service fees and royalties are common methods of

repatriating profits to non-resident parent companies and associates. Such transactions with

related parties are subject to the arm‟s length requirement, as promulgated by the

Organisation for Economic Co-operation and Development (“OECD”) and endorsed by the

Inland Revenue Authority of Singapore.

Taxation of Capital Gains

Gains that are capital in nature are not subject to income tax. For instance, the gain from the

disposal of his home residence is generally considered capital in nature for the home owner

and is not subject to income tax. In contrast, gains from trading in residence properties are

considered trading gains in the hands of a property trader and are subject to income tax.

Interaction with International Tax Regime

Singapore has signed comprehensive double taxation agreements with 60 countries

including Australia, Canada, China, Japan, most South-East Asian nations, United Kingdom

and many European nations.


Taxation of Partnerships

Whilst partnerships (including LLP and LP) have to file a tax return, they are transparent for

income tax purposes. Each partner will be taxed on his share of the income from the

partnership.

Taxation of Trusts

The taxation of trusts is dependent on the nature of income derives and the residency of its

beneficiaries. As a general guide, the trust is taxed (as a final tax) at the trustee level with

one exception. Under the exception, the trust is tax transparent in respect of the non trade or

business income distributed to resident beneficiaries who are entitled to such distribution

under the trust arrangement. Such distribution is subject to income tax directly in the hands of

these residents Beneficiaries.


4.2 POLICIES AND NORMS OF INDIA:

The Government of India, Ministry of Commerce and Industry announced New Foreign Trade

Policy on 27th August 2009 for the period 2009-2014, earlier this policy known as Export

Import (EXIM) Policy. After five years foreign trade policy needs amendments in general,

aims at developing export potential, improving export performance, encouraging foreign trade

and creating favourable balance of payments position. The Export Import Policy (EXIM

Policy) or Foreign Trade Policy is updated every year on the 31st of March and the

modifications, improvements and new schemes becomes effective from April month of each

year.

Highlights of the Annual Supplement 2010-11 to the Foreign Trade Policy 2009-14

Additional benefit of 2% bonus, over and above the existing benefits of

5% / 2% under Focus Product Scheme, allowed for about 135 existing products.

256 new products added under FPS (at 8 digit level), which shall be

entitled for benefits @ 2% of FOB value of exports to all markets.

Tea and CSNL Cardinal included for benefits under VKGUY @ 5% of FOB

value of exports.

Zero duty EPCG scheme, introduced in August 2009 and valid for only two

years up to 31.3.2011, has been extended by one more year till 31.3.2012.

Duty Entitlement Passbook (DEPB) scheme has been extended beyond

31.12.2010 till 30.06.2011.

Concessional Export Credit: Interest subvention of 2% for pre-shipment

credit for export sectors namely, Handloom, Handicraft, Carpet and SMEs for

all export sectors.

Exporters shall now have the flexibility to get a high value EPCG

authorisation by filing their EPCG application on Annual basis.

Clarifications on the availability of 4% SAD refund benefit.


Facility of a data preparation module for Advance Authorization and

Export Promotion Capital Good (EPCG) has been provided on an offline mode.

Finished Leather export shall be entitled for Duty Credit Scrip @ 2%

under FPS.

Duty free import of specified trimmings, embellishments etc. shall be

available on Handloom made-ups exports @ 5% of FOB value of exports.

Readymade Garment sector granted enhanced support under MLFPS for a

period of further 6 months


TAXATION

The tax structure of India is well developed with clearly set the boundaries of authority

between Central and State Governments and local bodies. The taxes levied by the central

government include Income Tax (except tax on agricultural income, which the State

Governments can levy), customs duties, central excise and service tax.

The state government on the other hand can levy Value Added Tax (VAT), stamp duty, State

Excise, land revenue and tax on professions. Local bodies are authorized to levy tax on

properties, octroi and for utilities like water supply, drainage etc.

In the last 1 and half decade, the Government of India has carried out various reforms in the

taxation system. The tax rates have been rationalized and tax laws have been simplified

resulting in better compliance, easy tax payment and better enforcement. The process of

rationalization of tax administration is ongoing in India. Since April 01, 2005, most of the

State Governments in India have replaced the sales tax with VAT.

Types of Tax

Excise duties

Excise duty is a tax on manufacture of goods within the country. Excise duties are levied

under the Central Excise and Salt Act, 1944, the Excise Tariff Act, 1985 and the Modified

Value Added Tax (MODVAT) scheme. The rates of excise duty liveable vary depending inter

alia on the nature of item manufactured, the nature of the manufacturing concern, and the

place of ultimate sale. The duty rates are either ad valorem (i.e. a fixed percentage of the

cost of production), specified(a fixed rate depending on the nature of the manufactured item),

or a combination of both. In the Finance Act, 1994, there has been a shift in the basis of

taxation from specific to ad valorem rates, with a reduction in excise duty proposed on a large

number of items.


Customs duties

Customs duties are levied on imports at rates specified in the Annual Budget. The maximum

rate of customs duty for 1994-95 is 65 per cent, except on baggage. The Finance Act, 1994

has witnessed a general reduction in the duty on capital goods, steel, chemicals, drugs,

pesticides and project imports. The Indian tariff system is based on the Customs Cooperation

Council (Brussels) Nomenclature, with most taxes being ad valorem in nature. In the past,

India has imposed high customs tariffs with a view to stimulate domestic industry. These

duties, which were as high as 300 per cent for specified items in the late 1980s have been

progressively reduced over the last few years to a maximum of 65 per cent.

Sales tax

Sales tax is levied on the sale of a commodity which is produced or imported and sold for the

first time. If the product is sold subsequently without being processed further, it is exempt

from sales tax. Sales tax is levied by either the Central or the State Government, Central

Sales tax or 4 per cent is generally levied on all inter-State sales. State sales taxes that apply

on sales made within a State have rates that range from 4 to 15 per cent. Sales tax is also

charged on works contracts in most States and the value of contracts subject to tax and the

tax rate vary from State to State. However, exports and services are exempt from sales tax.

Service tax

A service tax at the rate of 5 per cent has been levied on services of telephones, insurance

(other than life insurance) and stock brokers. The tax will be charged on the amount of

telephone bills, the net premium charged by insurance companies and the brokerage or

commission charged by stock brokers for their services.


5. BUSINESS OPPORTUNITIES IN FUTURE

Travel and Tourism is one of the world's largest foreign exchange earner industries, provides

employment directly to millions of people worldwide and indirectly through many associated

service industries.

It is a very wide industry, includes Government tourism departments, Immigration and

customs services, travel agencies, airlines, tour operators, hotels etc and many associated

service industries such as airline catering or laundry services, Guides, Interpreters, Tourism

promotion and sales etc.

Travel and Tourism enterprises include thousands of major internationals with a workforce to

the small private travel agent with a handful of employees.

Travel and tourism offer multiple career options to graduates. To enter this sector all they

need is a course in tourism management/development offered by several public and private

institutes. They can join tour and travel companies, tour agencies, airlines and hotels.

Besides they can also work as independent tour guide and travel agents. Remuneration here

depends upon quality of services and customer satisfaction.

Starting a tour company can be a good endeavor most especially if you have a natural

interest in traveling and sightseeing and you have the necessary knowledge on how to start a

tour company.

Tourism has major economic significance for a country. The receipts from international

tourism are a valuable source of earning for all countries, particularly, the developing. Visitor-

spending generates income for both public and private sectors, besides affecting wages and

employment opportunities.


6. CONCLUSION & SUGGESTION

Travel and tourism industry is concerned with providing services for people who are far away

from home, on business or holiday.

It works at every functional level in the industry dealing directly with people. Travel agents

levy the needs of tourists and businessmen and help them to make the best possible travel

arrangements from many travel options available.

Tourism is consumed at the point of production. This results in great opportunities for

individuals and micro-enterprises, in urban or marginal rural areas, to sell additional products

(e.g., handicrafts and souvenirs) or services (e.g. guiding or music) to the potential

consumers.

Tourism is a much more diverse industry than many others and can build upon a wide

resource base. This diversity results in wider participation of the informal sector, for example

a farming household produces and sells local handicrafts.

Tourism provides various employment opportunities especially to women as compared to

some of the other sectors.

In many developing countries domestic tourism is growing rapidly and like international

tourism brings relatively wealthy consumers to areas where they constitute an important local

market. Domestic tourism can be accessed by people with lower budgets and is often equally

valuable to the economy.


7. BIBLIOGRAPHY

Web Source

http://www.apeda.gov.in/apedawebsite/SubHead_Service/Tourism.htm

http://geography.about.com/od/urbaneconomicgeography/a/sectorseconomy.htm

http://www.mas.gov.sg/publications/staff_papers/MAS_Occasional_Papers_No5May_1998.ht

ml

http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Singapore

INTERNATIONAL-TRADE.html

https://app.stb.gov.sg/asp/index.asp

http://www.newasia-singapore.com/

http://www.yoursingapore.com/content/traveller/en/experience.html?cmp=brandlaunch_India

_GoogleSEM_INDIA-Generic_Singapore

http://www.apeda.gov.in/apedawebsite/SubHead_Service/Tourism.htm

http://geography.about.com/od/urbaneconomicgeography/a/sectorseconomy.htm

http://www.mas.gov.sg/publications/staff_papers/MAS_Occasional_Papers_No5May_

http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Singapore%20INTERNATIONAL-TRADE.html

http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Singapore%20INTERNATIONAL-TRADE.html

http://www.newasia-singapore.com/

http://www.yoursingapore.com/content/traveller/en/experience.html?cmp=brandlaunch_India_GoogleSEM_INDIA-Generic_Singapore

http://www.yoursingapore.com/content/traveller/en/experience.html?cmp=brandlaunch_India_GoogleSEM_INDIA-Generic_Singapore

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