In 2014, the World Bank rated Singapore as the first economy by the “ease of doing business”
, but also “the most open economy in the world for enabling trade”. This is a direct result of the enactment of the Competition Act 2004
, which has promoted foreign trade measures. It you plan on opening a company in Singapore
, our law firm
can provide you with more information about the recent development of the business market.
The Competition Act in Singapore
The Competition Act, enacted in 2004, is based on the English legislation and it has been introduced to develop a more efficient business market, which would attract foreign investors.
The Act is prohibiting anti-competitive practices, with the purpose of obtaining lower costs for goods and services and for offering better products on the consumer’s market. The Competition Act regulates three areas in which companies can abuse their position on the market:
• section 34: competitive agreements, decisions and practices which have as an effect the prevention, restriction or distortion of competition;
• section 47: abuse of a dominant market position, which determines if a certain company can keep the prices above the competitive levels or offer quality products or services below competitive levels;
• section 54: mergers whose actions would lessen the competition on the market, situation which may occur when the merger (national or foreign), has a market share of more than 40%.
These are the most important provisions of the Act, but our attorneys in Singapore
can offer you more details on the other stipulations of the document.
Exclusions from the Competition Act in Singapore
Although many large companies are regulated by the Competition Commission of Singapore, certain exceptions are applied. These are the following:
• agreements between a wholesaler and a retailer are excluded as they operate at different levels of supply chain and, generally speaking, these types of agreements are considered to be good, in terms of competition.
• block exemptions - agreements that are excluded because they produce net economic benefits. This situation is regulated by the Ministry for Trade and Industry; our law firm in Singapore can provide you with the legal background on which this exemption is granted, but you should know that this system is also accepted at an institutional level by the European Union.