Investigation on the construction of legal business environment in Singapore

The construction and development of the business environment is a reflection of the dynamic rule of law relationship. As a core economy in Southeast Asia, Singapore’s business environment has always been at the forefront of the world. Relying on an advanced rule of law environment, efficient government functions, and complete supporting facilities, the institutional transaction costs for the business activities of enterprises have been reduced.

The development process of the rule of law in the business environment

The initial stage of the construction of the rule of law in the business environment. In 1965, Singapore separated from the Federation of Malaysia and established an independent country, with a lot of work to be done. At that time, Singapore’s economic construction took cheap labor as an advantage, vigorously developed labor-intensive industries, and attracted foreign capital based on this to undertake industrial transfer from developed countries. However, the high institutional transaction costs, lack of professional talents, and imperfect economic dispute resolution mechanisms in the development of enterprises have made it difficult for enterprises to obtain effective legal support and help. In order to achieve sustainable economic development, the Singapore government began to improve the investment environment, promote economic and industrial development to shift to technocracy through legislation, reduce corporate transaction costs, and lay the foundation for leapfrog development between the government and the market.

The internationalization process of the development of the rule of law in the business environment. With the development of economic globalization, the development model of a single manufacturing industry can no longer meet the requirements of actual development. The Singapore government began to formulate refined property rights laws and regulations, flexibly adjust monetary policies, clarify tax systems, widely attract foreign investment, and create external economic models to encourage domestic enterprises to “go global”, align with global development with institutional norms, and participate in global market competition. The international institutional norms are integrated with Singapore’s laws, regulations and policy frameworks to form a stable, transparent and predictable business system, providing a fair competition environment for domestic and foreign enterprises, gradually becoming an international investment and trade center, and winning wide acclaim. At present, Singapore has signed free trade agreements with 25 countries, investment guarantee agreements with 42 countries, and double taxation avoidance agreements with 75 countries.

Digital transformation of the legalization of the business environment. As a leader in the global economy, Singapore’s digital infrastructure is at the forefront of the world, and science and technology are constantly promoting the legalization of the business environment to digitalization and transformation. Since the first proposal of the “Information and Communication 21st Century Plan” in 2000, to the “Smart Nation 2025” strategy, Singapore has taken “digital” as the core of modern legal construction, strengthened data resource construction and network security development, established the transformation focus of the digital economy and digital government, and promoted the digitalization of the rule of law society. The Singapore e-Government Master Plan highlights the government’s role as a service provider in the construction of a legal business environment, innovates digital governance methods, effectively integrates government and market resources, and improves the efficiency of business environment affairs. The legalization of the business environment is the prerequisite for building a digital business environment, and digital legal government and digital economy are the key to optimizing the business environment.

Main features of the construction of a legal business environment

The legal system of the business environment is becoming more sound. The legal system of Singapore’s business environment is a multi-level and multi-dimensional legal framework, which not only includes traditional commercial laws, but also includes government behavior regulation, international trade regulations and digital economic regulations. First of all, Singapore’s commercial laws and regulations are the foundation of economic construction, providing a stable and predictable business environment for the business environment, including a business entity system with the Company Law as the core, property rights protection regulations based on the Patent Law and the Trademark Law, personnel management systems with the Employment Act and the Labor Law as the core, and tax regulations with the Goods and Services Tax Law and the Wage Tax Law as the main content. Secondly, the construction of a government under the rule of law has established a sound administrative legal system, clarified the responsibilities of government agencies, supervised government behavior, prevented the abuse of power, and ensured the fairness and transparency of the exercise of administrative power. Singapore has effectively curbed commercial corruption with strict anti-corruption laws; it has also relied on the e-government system to strengthen government audits and promote the realization of fair value. Thirdly, Singapore attaches great importance to the construction of international legal norms, using organizations such as the International Chamber of Commerce as a bridge, signing a number of international economic and trade agreements such as the Investment Agreement, and constantly improving the domestic legal system, laying a legal foundation for integrating into the international market and resolving international commercial disputes. Finally, with the rise of the digital economy, Singapore has promoted the innovation and application of digital technology with digital rule of law, making the electronic transaction legal system forward-looking and adaptable, and further guaranteeing the development of a digital business environment. The Financial Regulatory Authority and the Economic Development Board and other institutions jointly constitute the regulatory body of Singapore, reviewing the formulation and implementation of laws and regulations, and escorting the business environment.

The construction of e-government for the business environment is increasingly strengthened. Starting in the 1980s, Singapore’s e-government construction has gradually become comprehensive and systematic, and currently covers e-government infrastructure construction, one-stop e-service platform, government data openness, and e-government intelligent services. First, based on the “Smart Nation” plan, the e-government infrastructure further launched the “Data Interconnection Development Blueprint”, combined with the “Singapore Green Development Blueprint 2030”, implemented the “whole-of-government” concept, and established a large-scale high-speed broadband network and wireless communication infrastructure, laying a solid foundation for the sustainable development of the digital government under the rule of law. Secondly, the e-government construction of the business environment is based on a one-stop service platform, such as “digital personal identity” and “electronic citizen”, which replaces the traditional government processing model, simplifies administrative processes, efficiently integrates public power resources, and greatly improves the communication efficiency between enterprises and the government. Thirdly, using the e-government platform as a window, actively promote the government policy disclosure system, timely disclose government information, including electronic laws and regulations, policy documents, and workflow visualization, which improves government trust and forms effective guidance for optimizing the business environment. Finally, the business environment e-government hardware facilities are equipped with artificial intelligence software, which uses big data to accurately grasp the needs of enterprises and social entities, provide targeted and personalized policy recommendations and preferential measures, ensure the accuracy of e-government, and promote the legalization of the business environment to be more convenient and efficient.

The construction of soft law regulation of the business environment is gradually covered. Compared with the construction of laws and regulations, soft law regulation refers to a behavioral system that enables actors to voluntarily comply with and self-regulate through non-mandatory and guiding norms. It complements legal regulations and creates a more fair, transparent and predictable business environment. The soft law regulation of the business environment includes the construction of policy systems, the construction of industry norms, and the development of a legal culture. First, Singapore’s business environment policy system is market-oriented and flexible, including tax incentives, financial policies, and fiscal subsidy policies, which have the function of interpreting and supplementing the legal norms of the business environment. Secondly, Singaporean enterprises have formed complete industry norms, which have expanded the space for hard law activities to a certain extent. The soft law self-regulatory norms among enterprises are an important foundation for the formation of Singapore’s business environment self-regulatory mechanism. They have obvious professional ethics tendencies and are an important manifestation of the rule of law culture. They not only strengthen the self-discipline of enterprise development, but also enhance the enthusiasm and active participation of enterprises, maintaining market order and promoting the rule of law construction of the business environment with a constructive role. Finally, Singapore’s rule of law culture dissemination mechanism is an important support for the soft law regulation of the business environment and a fusion agent for the development of multiple cultures. Relying on “corporate social responsibility”, private rights subjects popularize the rule of law culture and promote cultural integration through various means. Based on this, Singapore’s soft law regulation and hard law norms jointly create an efficient and transparent business environment for enterprises, which is conducive to better attracting foreign investment and improving international competitiveness.

The dispute resolution mechanism for the business environment is improved. Singapore’s business environment dispute resolution mechanism is an important part of the rule of law construction of the business environment, including a fair and efficient judicial system, an international commercial mediation system, a multi-dispute resolution mechanism and a business environment relief mechanism. First, the Singapore court uses modern digital technology to simplify the trial process, improve the trial efficiency of business environment cases, provide predictability for business environment activities and dispute resolution, and help achieve the unity of substantive justice and procedural justice. Secondly, as an international trade center, Singapore has joined the International Commercial Mediation Organization, strengthened the construction of international commercial legislation and norms, actively benchmarked against internationally accepted commercial rules, and is committed to building a one-stop dispute resolution mechanism. Thirdly, Singapore has built a multi-dispute resolution mechanism through arbitration and mediation. Based on the International Arbitration Act and the Singapore Mediation Act, it has established specialized arbitration and mediation institutions, such as the Singapore International Arbitration Center, the Singapore Mediation Center and the Maxwell Multi-Dispute Resolution Center, which specialize in arbitration and mediation matters, forming an “arbitration-mediation-arbitration” mechanism, providing efficient services for corporate dispute resolution. Finally, the relief mechanism is an important guarantee for dispute resolution in Singapore’s business environment. For example, regulatory agencies such as the Financial Regulatory Authority have provided relief channels for financial disputes in the construction of the rule of law in the business environment, protecting the legitimate rights and interests of enterprises. In summary, the core of optimizing the business environment lies in the rule of law, and the development of the digital economy has put forward higher standards for the construction of the rule of law. Therefore, actively promoting the construction of the rule of law in the digital business environment is the correct strategy to follow the trend of the times.

Author: Wang Shubin