What are some reasons behind Singapore's competitive edge over other markets in the Asia Pacific?

Short answer: Singapore's PAP political party, government and the policies laid down over the past few centuries. Longer answers: * Low tax rate. Singapore has one of the lowest corporate and personal tax rate in the world. This helps to attract foreign investments and talents. Bigger corp tax reduction if you make your Singapore office the Asia Pacific head quarter. * Top-notch business infrastructure. The geo location facilitates import/export. Hugh import/export logictic industry. It sits between east and west. Rarely there is traffic jams. One of the best voice and internet communications infrastructure. Major aerospace hub. Financial hub and world major banks are here for your financing need. And its legal framework, derive from British, is not too foreign to English speaking countries. * Productivity and education. Emphasis of the government on increasing productivity and education. Makes Singapore having one of the more competitive workforce in the world. As an example for the financial turmoil 2 years ago, Singapore government plan was giving out subsidies for corp to train staffs and retain staffs. * Foreign talents. Singapore government keenly attracts foreign talents into its shore. Some government policies advisory board have reputable foreigners in respective fields sitting at the board or in advisory positions. The up and coming Singapore University of Technology and Design is a collaboration with MIT. * Adapt to change and focus in order to compete. Singapore chooses its industry to focus. Out is manufacturing. Currently it is focusing on life science, green+water tech and interactive media. Who ever thought Singapore government can be one of the first in Asia Pacific to spearhead and approve the building of 2 casinos in the country to boost tourism? * English and Chinese languages. English is the main language for school, government and business. Chinese and mandarin is common as majority of population is Chinese. These two languages are the most important commerce languages. If you want to bring up your kids who can master these two languages, Singapore is ideal place. Jim Rogers and Jet Li think so. * Vibrant, cosmopolitan and convenient. A hugh park and garden will open in city centre later this year, ala Central Park in New York. The renowned Singapore Zoo is transformed later with theme park and 2 pandas on loan from China. Train network is expanding quickly with more reach. A new sports hub is being build with the aim of injecting sports into culture. The one and only F1 night race. Beautiful Marina Bay. Major gourmet centre this part of the world. Florished concert and club scenes. 24-hour supermarkets are plenty around the country. Some say Singapore is the New York of South East Asia. * Branding and marketing. Singapore has build up a brand for itself. Singapore Air emphasis the quality, Changi Airport the efficiency. And government agencies have efficient process, just check out the main ICA immigration office. Many people from China are here to buy chinese medicine from China as there is emotional gurantee that the goods in Singapore are genuine. Tie up for building SuZhou industry park in the 80s showcase the prowess of management. Recent tie up to build an eco city in TianJing China aims to put Singapore on top for its green and water tech. Singapore is now hype as one of the most hip and happening cities. * No natural disasters and safe. Weather in Singapore is either hot or wet. There is heavy rain and wind but never moonsoon. It is out of earthquake zone. Kids can wonder around in city past midnight safely. * Political stability and religious harmony. People in Singapore are generally happy and trusty of the governing political party. There is continually great emphasis on religious harmony and tolerance by Singapore leaders.

I think free market and multi-ethnic population are faux reasons that American observers would tend to highlight, because this correlates with US memes about economic success. But I think the bigger reason is that Singapore is run somewhat like a company, not like a country; 60% of GDP comes from state-owned companies. This is like having a "benevolent dictator": it works as long as the state is run in a smart way.

Location, location, location. Singapore's strategic location as a port has been one of the major factors behind its economic success ever since its beginnings as a British colony in the 1800s (Singapore boasts one of the busiest ports in the world, and is the 4th largest trading center in the world behind New York, London, and Tokyo). This is also the case for Hong Kong, which is also a former British Colony. Also, Singapore's People's Action Party works very hard to make the economy open, competitive, and business-friendly. So while the government may also impose harsh laws (such as corporal punishment for spitting in public and a mandatory death penalty for first-degree murder), the trade-off is a strong, stable economy.

It's a developed country, enough said. So most things you expect from a developed country (well educated workforce, good infrastructure, reliable legal system, etc) is available here. And it has only a few competitors. The nearest competitors is Hong Kong. For companies which want to enter South East Asian / East Asian market, there are not many choices unless they are willing to entertain problems typical to developing countries (lack of well educated workforce, shambolic infrastructure, unreliable legal system, etc). And unlike Japan or Korea, Singapore has a long standing tradition of welcoming foreign companies.

I agree with most of the comments thus far and in addition: Singapore has a lot going for it, including its proximity to major markets, pro-active government, tax benefits for foreign firms and reasonable  corporate laws. It's also relatively easy to do business there (check out the World Bank's "Ease of Doing Business Rankings" -- Singapore continues to be listed as No. 1).  Read "Singapore:  The Entrepreneurial Capital of the World"  http://importexport.about.com/od/DoingBusinessIn/a/Singapore-The-Entrepreneurial-Capital-Of-The-World.htm For more information, including 12 tips for doing business in Singapore, visit: http://importexport.about.com/od/DoingBusinessIn/a/Singapore-The-Entrepreneurial-Capital-Of-The-World.htm.  Another helpful article related to why Singapore has the competitive edge over other Asian countries, "Why Engage With Singapore?"  http://importexport.about.com/b/2011/11/18/why-engage-with-singapore.htm

It's the least awful place to live in the region. Low crime rate, low level of corruption, little air pollution.