July 23, 2012   www.global-arena.com   1
Executive Summary   Taxes matter to business. Corporate taxes affect business decisions since they represent a significant ...
Tax Systems Key to Competitive Business   Environments   •  Tax matters to business: taxes represent a significant business...
Overall Attractiveness Ranking of Asian   countries for tax activities           Singapore	                               ...
Key Findings                                                                                             Singapore	     • ...
Ranking Component: PwC Total Tax Rate              Data Series Used                          Cambodia	                    ...
Ranking Component: PwC Time to Comply              Data Series Used                Singapore	                             ...
Ranking Component: PwC Tax Payments            Data Series Used                      Singapore	                           ...
Ranking Component: Double Taxation Treaties             Data Series Used                                China	            ...
Ranking Component: Ease of Market Entry              Data Series Used                          Japan	                     ...
Ranking Component: Quality of Governance             Data Series Used                      Singapore	                     ...
Ranking Component: Economic Growth              Data Series Used                         Indonesia	                       ...
Ranking Component: Infrastructure Capability"                Data Series Used                       Singapore	            ...
Ranking Component: Interconnectedness             Data Series Used                        Singapore	                      ...
Have a look yourself   Looking for the most   attractive business   environments with the   most favourable taxation   sys...
Appendices              •  About Global-Arena.com                            •  Data sourcesJuly 23, 2012    www.global-ar...
Global-Arena.com      Global-Arena.com is the leading secure online matching platform that brings together companies,     ...
Our Approach: From Long to Short ListJuly 23, 2012            www.global-arena.com   18
Data Sources used per Location Factor   Tax	  Factors	                  Sources	                                  Governan...
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Most Competitive Tax Location in Asia

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Taxes matter to business. Corporate taxes affect business decisions since they represent a significant business cost and therefore have a material impact on net operating margins. Evidence
shows that countries with lower tax costs are more attractive to business investment and more likely to
experience economic growth.
By offering high growth opportunities Asia is attracting global businesses to set up, expand or relocate operation to capture growth. However, tax systems differ between Asian countries, not only in terms of total tax rate, but also in the ease of compliance burden and related governance and economic factors. As part of its Go-global solutions Global-Arena.com’s interactive analysis to the most attractive tax location in Asia unveils the comparative advantages of 17 Asian economies.

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Most Competitive Tax Location in Asia

  1. 1. July 23, 2012 www.global-arena.com 1
  2. 2. Executive Summary Taxes matter to business. Corporate taxes affect business decisions since they represent a significant business cost and therefore have a material impact on net operating margins. Evidence shows that countries with lower tax costs are more attractive to business investment and more likely to experience economic growth. By offering high growth opportunities Asia is attracting global businesses to set up, expand or relocate operation to capture growth. However, tax systems differ between Asian countries, not only in terms of total tax rate, but also in the ease of compliance burden and related governance and economic factors. As part of its Go-global solutions Global-Arena.com’s interactive analysis to the most attractive tax location in Asia unveils the comparative advantages of 17 Asian economies: •  Singapore, South Korea and Malaysia offer the most attractive business environments for tax in Asia. All three show favourable conditions in terms of taxation systems •  Biggest populated emerging economies China and India show attractive economic growth figures combined with the highest number of signed bilateral taxation treaties, but show a mixed performance on other aspects •  Other emerging markets such as Cambodia, Indonesia and Azerbaijan rank high on specific aspectsJuly 23, 2012 www.global-arena.com 2
  3. 3. Tax Systems Key to Competitive Business Environments •  Tax matters to business: taxes represent a significant business cost for corporations and have a material impact on net operating margins •  Corporate tax rate, compliance burden and transparency of the tax system are decisive location factors for companies considering to set up, relocate or expand operations •  Because taxes directly affect business investments and location decisions, national, regional and local governments compete to offer the most attractive tax regimes and continue to reform, resulting in dropping tax rates and easing compliance burdens •  When it comes to site selection a 360-degree real-time view and performance monitoring of the market, business environment and local and global talent supply, including comparisons of tax systems is neededJuly 23, 2012 www.global-arena.com 3
  4. 4. Overall Attractiveness Ranking of Asian countries for tax activities Singapore   98%   South  Korea   90%   Malaysia   85%   Japan   80%   China   75%   Taiwan   74%   India   64%   Azerbaijan   55%   Thailand   55%   Indonesia   49%   Armenia   25%   Philippines   22%   Bangladesh   21%   Cambodia   19%   Pakistan   14%   Vietman   10%   Sri  Lanka   7%   0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 4
  5. 5. Key Findings Singapore   •  Singapore, South Korea and Malaysia offer the most PwC  Total  Tax  Rate   PwC  Time  to   Interconnectedness   Comply   attractive business environments for tax in Asia. All three show favourable conditions in terms of taxation Infrastructure   PwC  Tax  Payments   CapabiliAes   systems (tax rate, time to comply, tax payments and Economic  Growth   Double  TaxaAon   TreaAes   double taxation treaties) Quality  of   Ease  of  Market   Governance   Entry   •  Singapore outperforms the other countries on most of the included location factors, only in terms of expected Singapore   Mean   economic growth the country scores below average Malaysia   •  Biggest populated emerging economies China and India show attractive economic growth figures PwC  Total  Tax  Rate   combined with the highest number of signed bilateral PwC  Time  to   Interconnectedness   Comply   taxation treaties, but show a mixed performance on Infrastructure   CapabiliAes   PwC  Tax  Payments   other aspects Double  TaxaAon   •  Other emerging markets such as Cambodia, Indonesia Economic  Growth   TreaAes   and Azerbaijan rank high on specific aspects Quality  of   Ease  of  Market   Governance   Entry   Malaysia   Mean  July 23, 2012 www.global-arena.com 5
  6. 6. Ranking Component: PwC Total Tax Rate Data Series Used Cambodia   86%   • Total Tax Rate as % of commercial Singapore   80%   profits PwC Paying Taxes Survey South  Korea   76%   Malaysia   69%   Indonesia   68%   Bangladesh   67%   Pakistan   66%   Taiwan   66%   Thailand   62%   Azerbaijan   57%   Analysis Vietman   57%   • Cambodia offers of all Asian countries Armenia   55%   the most attractive environment when it Philippines   44%   comes to the total tax rate. The country Japan   38%   ranks on top with taxing commercial India   17%   profits with 22,5% • Of all 17 countries included, Sri Lanka is China   15%   the least attractive with a total tax rate of Sri  Lanka   0%   105,2% 0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 6
  7. 7. Ranking Component: PwC Time to Comply Data Series Used Singapore   87%   • Time to comply (in hours) PwC Malaysia   82%   Paying Taxes Survey Cambodia   76%   Philippines   72%   South  Korea   67%   Azerbaijan   67%   Taiwan   64%   India   62%   Sri  Lanka   61%   Thailand   60%   Analysis Indonesia   60%   • When it comes to hours needed to Bangladesh   53%   comply Singapore ranks on top in Japan   47%   Asia with only 84 hours China   34%   • Malaysia (133), Cambodia (173)and Armenia   18%   the Philippines (195) follow Pakistan   11%   Vietman   0%   0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 7
  8. 8. Ranking Component: PwC Tax Payments Data Series Used Singapore   90%   • Number of tax payments PwC China   88%   Paying Taxes Survey South  Korea   82%   Malaysia   80%   Japan   79%   Taiwan   77%   Azerbaijan   72%   Bangladesh   66%   Thailand   62%   Analysis • Of the countries included Singapore Vietman   42%   offers the most attractive business India   40%   environment in terms of required number Armenia   38%   of tax payments. The country ranks on Cambodia   28%   top with 5 payments per year •  China follows with 7 tax payments per Philippines   15%   year Pakistan   15%   Indonesia   11%   Sri  Lanka   1%   0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 8
  9. 9. Ranking Component: Double Taxation Treaties Data Series Used China   96%   • Double Taxation Treaties listed in India   92%   the OECD EOI Tax Database South  Korea   90%   Malaysia   81%   Singapore   79%   Indonesia   75%   Japan   70%   Vietman   37%   Philippines   37%   Thailand   35%   Pakistan   34%   Analysis Armenia   27%   • China is most attractive Asian country Sri  Lanka   26%   with respect to avoidance of double Azerbaijan   22%   taxation of income, capital and sales Bangladesh   19%   taxes. The country signed 99 such bilateral agreements Taiwan   10%   • India and South Korea follow with 88 and Cambodia   5%   84 agreements respectively 0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%   • Cambodia is the least attractive country in this perspective: the country didn’t sign any double taxation treaty to dateJuly 23, 2012 www.global-arena.com 9
  10. 10. Ranking Component: Ease of Market Entry Data Series Used Japan   92%   • Ease of establishment index World Taiwan   90%   Bank Investing Across Borders Singapore   88%   Database Armenia   88%   India   83%   Azerbaijan   72%   South  Korea   70%   Pakistan   49%   China   46%   Thailand   35%   Malaysia   35%   Vietman   27%   Analysis Philippines   27%   • In Japan it takes the least effort to Bangladesh   20%   establish a foreign business. The country ranks top in terms of number procedures Indonesia   15%   and days needed Sri  Lanka   7%   • Taiwan, Singapore and Armenia follow Cambodia   4%   0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 10
  11. 11. Ranking Component: Quality of Governance Data Series Used Singapore   99%   • World Bank Governance Indicators Japan   97%   on Rule of Law Taiwan   89%   • Transparency International South  Korea   85%   Corruption Index Malaysia   54%   Sri  Lanka   47%   India   46%   Thailand   45%   Analysis China   43%   • Countries such as Singapore, Japan, Vietman   32%   Taiwan and South Korea offer the most Armenia   30%   reliable governance environment when it Indonesia   27%   comes to the rule of law and corruption. Philippines   26%   In particular Singapore and Japan rank Bangladesh   22%   high on these aspects • Although improving their quality of Pakistan   20%   governance, countries like Malaysia, Azerbaijan   17%   Sri Lanka, India, Thailand and China do Cambodia   11%   not show comparable levels yet 0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 11
  12. 12. Ranking Component: Economic Growth Data Series Used Indonesia   96%   • IMF forecast total GDP growth rate Azerbaijan   90%   2012-2017 Cambodia   80%   China   79%   India   76%   Sri  Lanka   72%   Vietman   60%   Taiwan   58%   Bangladesh   53%   Analysis South  Korea   52%   • Indonesia is expected to show the Malaysia   43%   highest economic growth in the next five Thailand   40%   years. IMF forecast indicates the country’s Philippines   26%   GDP will have increased by app. 45% by 2017 Armenia   20%   • Also economies such as Azerbaijan, Pakistan   7%   Cambodia, China and India are expected Japan   5%   to grow significantly the next five years Singapore   5%   0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 12
  13. 13. Ranking Component: Infrastructure Capability" Data Series Used Singapore   96%   • World Economic Forum Global China   89%   Competitiveness Report items on South  Korea   88%   Infrastructure: Japan   88%   • Roads Malaysia   84%   • Railroads Taiwan   75%   • Airport Thailand   61%   • Available airline seat kilometers India   51%   Sri  Lanka   45%   Azerbaijan   39%   Analysis Indonesia   30%   •  With regards to the infrastructure Pakistan   23%   capabilities countries such as Singapore, Armenia   19%   China, South Korea, Japan and Malaysia Cambodia   18%   offer the most attractive business Vietman   13%   environment: these countries all offer a Philippines   9%   state of the art road, rail and air Bangladesh   9%   infrastructure 0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 13
  14. 14. Ranking Component: Interconnectedness Data Series Used Singapore   99%   • KOF Index of Globalisation: Malaysia   95%   • Economic dimension Thailand   73%   • Political dimension Japan   72%   • Social dimension South  Korea   71%   China   60%   Indonesia   53%   Philippines   52%   India   40%   Pakistan   39%   Analysis Taiwan   38%   •  Singapore and Malaysia are the most Azerbaijan   34%   interconnected Asian countries when it Sri  Lanka   25%   comes to economic, political and social Armenia   24%   integration Cambodia   14%   • Thailand, Japan and South Korea follow, Vietman   12%   whereas countries such as Cambodia, Bangladesh   8%   Vietnam and Bangladesh rank significantly lower on these aspects 0%   10%   20%   30%   40%   50%   60%   70%   80%   90%   100%  July 23, 2012 www.global-arena.com 14
  15. 15. Have a look yourself Looking for the most attractive business environments with the most favourable taxation system? Click here to visit the interactive analysis to adjust the sliders and to learn more about our Go-global Enterprise Location Planning servicesJuly 23, 2012 www.global-arena.com 15
  16. 16. Appendices •  About Global-Arena.com •  Data sourcesJuly 23, 2012 www.global-arena.com 16
  17. 17. Global-Arena.com Global-Arena.com is the leading secure online matching platform that brings together companies, investors and business locations worldwide. Global-Arena.com offers innovative digital services and gives them a data advantage to save cost and time. With it’s Go-global solutions Enterprise Location Planning and Economic Development Planning Global-Arena.com is able to provide companies and governments an integrated 360-degree view and comparative advantages analysis of the market, business environment and talent supply by: •  Analysing and comparing the attractiveness of business locations in support of its clients growth strategies •  Searching and analysing growth, expansion and relocation opportunities worldwide •  Visualising scenarios of business and policy impacts based on real time economic statistics, trends and forecasts To learn more about how Global-Arena.com can support your site selection or location promotion processes, visit our website www.global-arena.com or contact: Peter Storm CEO info@global-arena.com www.global-arena.comJuly 23, 2012 www.global-arena.com 17
  18. 18. Our Approach: From Long to Short ListJuly 23, 2012 www.global-arena.com 18
  19. 19. Data Sources used per Location Factor Tax  Factors   Sources   Governance   Sources   Growth  Factors   Sources   Factors   PwC  Total  Tax  Rate   PwC  Paying  Taxes  Survey   Double  TaxaAon  TreaAes   OECD  EOI    Tax  Database   Forecast  Economic   IMF  Forecast  annual  GDP   as  a  percentage  of   number  of  listed  double   Growth   growth  rate  2012-­‐2017     commercial  profits   taxaAon  treaAes   PwC  Time  to  Comply   PwC  Paying  Taxes  Survey   Ease  of  Market  Entry   World  Bank  InvesAng   Infrastructure  CapabiliAes   World  Economic  Forum   hours  per  year  needed  to   Across  Border  Database   Global  CompeAAveness   comply     Ease  of  establishment   Report  2011-­‐2012  items   index   on  infrastructure  quality:   •   Roads   •   Railroads   •   Airports   •   Available  airline  seat   kilometers   PwC  Tax  Payments   PwC  Paying  Taxes  Survey   Governance  Quality   World  Bank  Governance   Interconnectedness   KOF  Index  of   number  of  tax  payments   Indicators  on  Rule  of  Law     GlobalisaAon:   per  year   Transparency   •   Economic  Dimension   InternaAonal  CorrupAon   •   Social  Dimension   Index   •   PoliAcal  Dimension  July 23, 2012 www.global-arena.com 19

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