Every business owner who launches a venture plans for it to expand. It is crucial to pick the ideal location with the ideal company environment in order to realize that objective.
Therefore, business owners should constantly take into account a number of variables before deciding to establish their operations in a new nation. It is essential to conduct a thorough analysis of the advantages, disadvantages, chances, and dangers involved in opening a company in a specific market.
This report compares doing business in Singapore with Germany in detail, giving a broad overview of various aspects like the business environment, taxes, intellectual property protection, trade openness, and workforce, among others.
| Singapore | Germany | |
| Corporate Tax | 0% (on Foreign Profits) | 30% |
| Withholding Tax | 0% (on Dividends) | 25% |
| Time to Incorporate a Business | 3 days | 5 Weeks |
Business Environment
In its 2018 “Doing Business Report,” the World Bank ranked the ease of doing business throughout the world and Singapore came in second. Germany was positioned 24th.
Here is a summary of some of the major elements that each country’s ranking was influenced by:
| (Ranking based on 190 countries) | Singapore | Germany |
| launch a business | 3 | 114 |
| Minority investor protection | 7 | 72 |
| Tax payments | 8 | 43 |
| Trading between countries | 45 | 40 |
| Dealing with bankruptcy | 27 | 4 |
Singapore is ranked 8th in the world for business, and Germany is ranked 14th, according to Forbes’ 2018 Best Countries for Business Index.
Taxes
In terms of tax burdens, personal income tax rates in Germany range from 0% to 47.5% while they are 0% to 20% in Singapore for incomes over S$320,000. The federal company tax rate in Germany is 15.8%, and the municipal trade tax ranges from 14% to 17%. The actual corporate tax rate ranges from 30% to 33%. For profits up to S$300,000, Singapore’s corporate income tax rate is 8.5%; for profits over S$300,000, it is 17% flat.
IP Protection
It has been demonstrated time and time again that nations with robust intellectual property systems prosper the most.
In terms of IP protection regime, Singapore is in 3rd place globally, whereas Germany comes in at 21st place, according to the World Economic Forum’s “2018 Global Competitiveness Report.”
International Competitiveness
According to their rankings in the World Economic Forum’s “2018 Global Competitiveness Report,” both nations exhibit identical levels of competitiveness. Out of 140 economies, Singapore has the second-most competitive economy, and Germany has the third-most competitive economy.
Singapore ranked second among 174 nations in the Heritage Foundation’s “2018 Index of Economic Freedom,” while Germany came in at number 25. Singapore had gains in areas like trade freedom, public spending, judicial efficiency, and political integrity. On the other side, Germany also had gains in areas like economic stability, public spending, and political integrity.
Openness to Trade
According to data from the World Economic Forum’s “2016 Global Enabling Trade Report,” Singapore ranks first among 136 nations in terms of trade openness, while Germany comes in at number nine. Due to its open trade policy, stable regulatory environment, low trade barriers, low tariff structure, effective border administration, sophisticated transport and port infrastructure, logistical efficiency, and affordable shipments, Singapore took the top spot.
Bureaucracy
Workforce
The World Economic Forum’s Global Competitiveness Report 2018, which evaluates some of the important aspects of the workforce, ranks each nation according to the following:
| (Ranking based on 140 countries) | Singapore | Germany |
| Digital skills among population | 6 | 16 |
| Ease of finding skilled employees | 9 | 7 |
| cooperation between employers and employees | 2 | 19 |
| Easy access to foreign labour | 97 | 11 |
| Labour tax rate | 75 | 97 |
Overview of the Rankings: Singapore and Germany
| Year | Category | Singapore’s rank | Germany’s rank | Source |
| 2018 | Efficiency of Business | 2 | 24 | World Bank, 2018 Ease of Doing Business Report |
| 2018 | Most Competitive Economy in the World | 2 | 3 | World Economic Forum, Global Competitiveness Report 2018 |
| 2018 | The country with the best business climate worldwide | 8 | 14 | Forbes’ Best Countries for Business Index |
| 2019 | Freest Economy in the World | 2 | 24 | Heritage Foundation’s Index of Economic Freedom |
| 2016 | Country with the Most Open Trade | 1 | 9 | World Economic Forum, Global Enabling Trade Report |
| 2018 | Country with the lowest perception of corruption | 3 | 11 | Transparency International, Corruptions Perception Index |
| 2018 | World’s Best IP Protection | 3 | 21 | World Economic Forum, Global Competitiveness Report |
The ABC(DE) of Business for German Enterprises in Singapore
Here are some suggestions for German companies wishing to establish or grow their businesses in Singapore.
Singapore’s biggest trading partner in Europe is Germany, whereas Germany’s biggest trading partner in ASEAN is Singapore. Bilateral commerce between both countries climbed by 8.3% to S$21.6bn in 2017. In Singapore, there are about 1,700 German enterprises operating in sectors as diverse as chocolate and chemicals.
Due to Singapore’s ease of doing business, German companies are drawn to establishing operations there. Singapore has been named the world’s easiest place to do business in Asia by the World Bank for five years running. For instance, if no extra government agency permissions or licenses are required, the Singapore business registration process can be completed in as little as 24 hours.
If you were to hire a registered filing agent to handle the formalities for you, submitting the online application for your company incorporation may also be simple and hassle-free.
And there are a ton of other reasons why Singapore is the best place to conduct business. Here, we’ll share some insider advice that will make your transition to sunny Singapore easier.
Associations
The German Club is the oldest foreign club in Singapore and was established in 1856. Both organizations work to advance German language and culture in Singapore alongside the Goethe-Institut, Germany’s cultural institute.
Additionally, the German embassy and other government- and industry-related organizations like the Singaporean-German Chamber of Industry and Commerce and the German Center for Industry and Trade provide considerable assistance for German businesses in Singapore.
Associations located in Germany can also use their industry network to connect with others who share similar interests and investigate commercial opportunities in Singapore. Beginning in April of this year, the Singapore Precision Engineering and Technology Association (SPETA) and the German business association IVAM Fachverband Für Mikrotechnik (IVAM) will work together to implement Industry 4.0 technology.
In order to connect with possible partners among businesses in Singapore and Germany, both parties will initially be able to list their members in the other’s member directory.
Business Opportunities
A well-connected hub for a developing area, Singapore not only has a business-friendly climate but also a wealth of business prospects.
Due to Singapore’s position, it is simple to reach larger regional markets like those in Thailand, Indonesia, the Philippines, and Vietnam. The airport connects to 210 locations with more than 6,000 flights every week, while the seaport has connections to 600 additional ports worldwide. According to the most recent Mercer poll, Singapore also has the greatest infrastructure in the world, with convenient access to transit, dependable electricity, political stability, and low crime rates.
Additionally, Singapore has a network of over 22 FTAs in place, allowing for easier access and duty-free imports into a number of export markets in the ASEAN area as well as other nearby countries including China, India, South Korea, Australia, and New Zealand.
With such a conducive business environment, more German companies in Singapore are expanding their operations here to become innovation hubs. DHL launched its first innovation centre outside of Germany in Singapore (https://www.channelnewsasia.com/news/business/dhl-launches-s-10m-innovation-centre-in-singapore-8245702) while gas giant Linde opened a $30m digital innovation hub (https://www.straitstimes.com/business/companies-markets/linde-to-invest-s30m-in-singapore-digital-technologies-hub).
Cooperation
Sincere diplomatic ties have existed between Singapore and Germany for more than 50 years. In 2015, both nations commemorated 50 years of diplomatic ties and worked together on defence and economic projects like the expanded Defence Cooperation Agreement.
The promotion of financial technology (fintech) and Industry 4.0 for manufacturing are shared objectives between the two nations. Automation and data sharing are used by Industry 4.0 to advance manufacturing technologies and procedures.
Both nations have large industrial and financial services industries, therefore it is common knowledge that early technology adoption will support their continued worldwide competitiveness in these fields.
With the use of Big Data analytics and machine learning, the German gas and engineering giant Linde intends to transform its facility on Jurong Island, an offshore island west of Singapore, into a plant of the future.
In order to promote information sharing on a rapidly expanding industry, the German online bank Fidor recently created its first fintech education curriculum in Asia alongside five Singapore polytechnics.
Deutsche Sprechen (or Speak German)
European German School The largest German school in Southeast Asia is located in Singapore. Additionally, a number of nearby schools teach German as an additional subject, producing a population of German-speaking Singaporeans who are exposed to the German language and culture at a young age.
Even German-speaking Protestant and Catholic churches exist, enabling German families living in Singapore to keep up with their ancestral customs.
Entrepreneurship
A*STAR, the scientific and technology agency of Singapore, and BMBF, the federal ministry of education and research of Germany, released a request for proposals earlier this year for organizations from the two nations to work together on cooperative research projects.
Projects using novel additive manufacturing materials and techniques, industrial internet of things (IIOT) security systems, smart sensors and actuators for production, and advanced manufacturing systems will all be eligible for funding of up to $500,000 or €300,000.
Additionally, enterprises wanting to establish a company in Singapore have access to training grants, research grants, and regional or global headquarter tax incentives thanks to government organizations like A*STAR and the Economic Development Board (EDB).
A program is available to high-potential German start-ups to assist with their entry into Southeast Asia through Singapore-based acceleration programs. These cooperative yet focused investment initiatives support entrepreneurship and company prospects in Singapore and Germany, enabling them to grow outside of their home countries.
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