The annual ranking of business-friendly countries, compiled by financial magazine Forbes Asia, saw Singapore jump four spots from last year, leapfrogging Britain, Sweden, Ireland and Finland.
Singapore also maintained its regional top-dog position as the economy with the best business conditions in the Asia-Pacific. New Zealand was fifth in the ranking, Australia eighth and Hong Kong ninth.
Business-friendly economies like Singapore, which are able to attract entrepreneurs, investors and workers, are 'in a much better position than others to rebound' from the economic downturn that has gripped the world, Forbes said.
Its survey ranked 127 countries according to criteria such as taxes, red tape, investor protection, stock market performance, promotion of free trade and freedom of expression and organisation.
The only three countries ahead of Singapore in the ranking were Denmark, the United States and Canada.
To top it off, 17 Singapore-listed firms also made it to this year's Forbes Global 2000 list of the world's 2,000 biggest public companies, ranked by profits, assets, sales and market value. Last year only 14 firms from Singapore were featured.
In fact, with the financial meltdown centred around the United States and Europe, Asian companies featured more prominently on the list this year. A total of 681 firms from the region made the list, 61 more than last year.
But the US is still the single dominant country with 551 firms represented - including the list-topper, General Electric - although this number is down by 47 from last year.
Japan, the clear leader in Asia, fielded 288 firms to the Global 2000 list, 29 more than last year. China, at number two, had 91 companies on the list, an increase of 21 from last year.