For example, the Asean Free Trade Area (AFTA) was established to promote the idea of reducing intra-regional tariffs amongst the ASEAN nations which is done through the Common Effective Preferential Tariff Scheme(CEPT). Through this scheme, it will be easier to do cross-border trade or other business activities such as investments. Besides encouraging trade amongst the ASEAN members, AFTA also encourages foreign firms from non-ASEAN nations to invest in ASEAN nations such as Singapore. Besides Free Trade Agreements (FTAs), the Singapore government also introduced other trade policies such as the Pioneer Certificate Incentive (PC) and Development and Expansion Incentive (DEI), which are under the Economic Expansion Incentives Act which was introduced by the government and the Economic Development Board (EDB) on the 15th of December, 1967 where tax incentives were given out in the form of Pioneer Certificates to foreign firms that are willing to invest in contributions to the Singapore economy in leading industries such as securing Headquarters (HQ) activities in Singapore to control and coordinate regional business operations. Between the years 2011 to 2015, a total of 71 firms were awarded the certificate, including two Small and Medium Enterprises (SME), one of which is a local firm. (Lee, M. 2016)Furthermore, changes were made to the Economic Expansion Incentives Act in 2016, which extends the maximum possible tax relief period for firms that holds the certificate. Before the changes were introduced, the Act only allows each firm to a maximum possible tax relief of 15 years, regardless of the number of Pioneer Certificate that they hold. The changes to the Act allows each firm to receive tax relief for a maximum of 20 years, and the tax relief is applied on the economic activity rather than the company as a whole. (Tan, N. 2016) This tax relief incentive encourages foreign firms to add more high-value economic activities in Singapore, thereby increasing investment in the Singapore economy by foreign firms.
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