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Singapore ranks among the least corrupt countries in the world. Companies face very low risks of corruption in the city state, which has numerous safeguards and rigorous audit controls. Key anti-corruption legislation includes the Penal Code and the Prevention of Corruption Act (PCA), which prohibit active and passive bribery, gifts and facilitation payments in the public and private sector. Maximum punishment includes fines of up to SGD 100,000 (approx. USD 80,000), prison sentences of up to seven years and in some instances both. Facilitation payments, bribery and gifts are uncommon in business transactions. Singapore has ratified the United Nations Convention against Corruption.
Last updated: April 2016
There is a low risk of corruption in the judicial system. Irregular payments or bribes to obtain favorable judicial decisions never occur (GCR 2015-2016). Judicial independence is guaranteed by the constitution and is generally respected in practice (HRR 2014). Exceptions are cases against the government, which overwhelmingly result in success for the ruling party and often drive opposition politicians and parties into bankruptcy (FitW 2015).
Singapore provides very efficient judicial processes: Enforcing a contract takes businesses on average only 150 days (DB 2016). The country is a regional hub for alternative dispute mechanisms (ADR), both for investment and commercial disputes, which it promotes in its extensive arbitration centers (ICS 2015). Businesses find that the legal framework for settling disputes is efficient in Singapore (GCR 2015-2016). Singapore ratified the convention on the Recognition and Enforcement of Foreign Arbitration Awards (1958 New York Convention) and is a member state to the International Centre for Settlement of Investment Disputes (ICSID convention).
Corruption in the police force is a very low risk for businesses in Singapore. The Ministry of Home Affairs and the Corrupt Practices Investigation Bureau have effective mechanisms in place to investigate and punish abuse, and corruption and impunity are not a problem (HRR 2014). The police can be relied upon to enforce law and order (GCR 2015-2016).
Corruption is a very low risk for businesses dealing with public services, and does not represent an obstacle when acquiring public licenses, permits or utilities. Businesses report that irregular payments in relation to public utilities do not occur (GCR 2015-2016). Procedures for obtaining licenses and permits are usually transparent and not burdensome (ICS 2015). Nevertheless, some exceptions apply and procedures for investors in areas considered national priorities can often be faster than others (ICS 2015).
Singapore promotes an efficient and business-friendly regulatory environment with the interests of both foreign investors and local enterprises in mind (ICS 2015). Companies can use a centralized internet portal to solicit feedback on selected draft legislation and regulations. Companies can also visit an online licensing portal, a one-stop application point for multiple licenses. Starting a business takes on average 2.5 days and involves less costs than elsewhere in East Asia and the Pacific (DB 2016).
There are no reports of corruption in Singapore’s land administration. The judiciary effectively protects property rights, and contracts are secure (BTI 2016). Overall, there are no restrictions on foreign ownership of industrial and commercial real estate, but foreigners are not allowed to purchase public housing (HDB) (ICS 2015). Registering property is significantly faster and less costly than elsewhere in the region (DB 2016). Singapore performs very well in regards to dealing with construction permits, which takes businesses less time than anywhere else in the world (DB 2016).
There is a very low risk of encountering corruption in the tax administration. Companies report that bribes in connection with annual tax payments are extremely rare (GCR 2015-2016).
In September 2014, six Singaporean customs officials were convicted and sentenced to prison for corruption as they accepted bribes for processing fraudulent Goods and Service Tax tourist refund claims (HSF, Oct. 2015).
The customs administration carries a very low risk of corruption for business (GETR 2014). Singapore is a trading hub with one of the most efficient and transparent border administrations in the world (GETR 2014). Accordingly, irregular payments are uncommon when importing and exporting (GCR 2015-2016).
In April 2015, an associate consultant with a marine surveying firm solicited bribes from ship masters to issue favorable ship inspection reports and was convicted to 12 months in prison (HSF, Oct. 2015). The conviction emphasizes that private sector corruption can result in jail sentences in Singapore (HSF, Oct. 2015).
There is a low risk of encountering corruption in public procurement. Irregular payments or bribes in connection with the awarding of public contracts or licenses is very uncommon (GCR 2015-2016). Compared to 29 percent globally, only 5 percent of Singaporean-based companies have reported having encountered procurement fraud in the past two years (PwC, 2014).
Singapore has limited natural resources; there are no reports of corruption in the sector.
Corruption in Singapore is well contained and rigorously prosecuted (BTI 2016). The two main laws are the Penal Code and the Prevention of Corruption Act (PCA) (Clifford Chance, Oct. 2015). The PCA prohibits gratifications, which includes active and passive bribery, facilitation payments and gifts (Clifford Chance, Oct. 2015). It is also illegal to offer such gratification to induce a person to withdraw from a tender (HSF, May 2015). The PCA applies to the public and private sector and both companies and individuals. Principals, both in the private and in the public sector, can be found liable for the action of intermediaries (Clifford Chance, Oct. 2015). Penalties for private sector bribery include fines not exceeding SGD 100,000 (approx. USD 80,000) or imprisonment of up to five years (Clifford Chance, Oct. 2015). For public sector bribery fines of up to SGD 100,000 (approx. USD 80,000) can be levied as well as prison sentences for a term not exceeding seven years, in some instances both can occur (Clifford Chance, Oct. 2015). The PCA provides protection for whistleblowers by protecting their identity and information that could lead to their discovery (HSF, May 2015).
Singapore is not a party to the OECD Convention on Combating Bribery, but the PCA prohibits Singaporean citizens to bribe a foreign official or any other person, whether within or outside Singapore (ICS 2015). Singapore has ratified the United Nations Convention against Corruption.
Traditions of civil society in Singapore are weak, but gradually expanding, especially among welfare-oriented groups (BTI 2016). Singapore’s constitution provides freedom of speech and freedom of expression, but the government imposes official restrictions on these rights especially in regards to criticism of the government or potential disruptions of social harmony (HRR 2014). Freedom of association is restricted by the Societies Act, which requires most organizations of more than 10 people to register with the government, and the government enjoys full discretion to register or dissolve such groups (FitW 2015).
Nearly all local newspapers, radio stations, and television channels are owned by companies linked to the government (FoP 2015). Even though some critical content is published, most media outlets practice self-censorship (FitW 2015). The Singaporean press is considered “not free” (FoP 2015).
- Bertelsmann Foundation: Bertelsmann Transformation Index 2016.
- The World Bank: Doing Business 2016.
- Channel News Asia: “Former ST Marine financial controller pleads guilty in corruption case”, 19 February 2016.
- The World Economic Forum: Global Competitiveness Report 2015-2016.
- US Department of State: Investment Climate Statement 2015.
- Freedom House: Freedom of the Press 2015.
- Freedom House: Freedom in the World 2015.
- Clifford Chance: A Guide to Anti-Corruption Legislation in Asia Pacific 4th Edition, October 2015.
- Herbert Smith Freehills: Global Anti-Corruption Report, October 2015.
- Herbert Smith Freehills: Guide to anti-corruption regulation in Asia Pacific, May 2015.
- Pricewaterhouse Cooper (PwC): Economic Crime Survey 2014.
- US Department of State: Country Report on Human Rights Practices for 2014.
- The World Economic Forum: The Global Enabling Trade Report 2014.