Globalization’s emergence has drastically lowered obstacles everywhere. Our society has advanced to a world that contracting, and business practices have changed as well.
As more business owners explore broadening their horizons and relocating, it is essential that they take several important factors into account before entering a foreign business jurisdiction.
Singapore
New Zealand
Corporate Tax
0% (on Foreign Profits)
28%
Withholding Tax
0% (on Dividends)
33%
Time to Incorporate a Business
3 days
1 week
This article analyses the many factors that go into choosing a country by doing a comparison of doing business in Singapore versus New Zealand.
Singapore has a highly developed economy and a culture that is free of corruption. The economy is notable for its stable pricing and a per capita GDP that is higher than that of the majority of wealthy nations. The long-term goal of the government is to pursue a new growth path that emphasizes increasing productivity and will eventually enable Singapore to become the financial and high-tech hub of Southeast Asia.
The nation is a key hub for foreign investment and one of the world’s top business hubs. It is supported by strong financial stability, a solid legal and regulatory environment, an effective and transparent government, and effective anti-corruption measures.
The rural economy of New Zealand has given way to an industrial one. This rapid growth has increased its GDP and widened the industrial sector’s technological capabilities. Before the commencement of the global financial crisis, the economy entered a recession, and despite the government’s development of fiscal stimulus measures, its primary trade industries are still susceptible to foreign demand.
The comparison of worldwide rankings’ findings between Singapore and New Zealand show the following stark contrasts between the two countries.
ENVIRONMENT FOR BUSINESS
In its “2015 Ease of Doing Business Report,” the World Bank ranks Singapore as the most business-friendly country in the world, with New Zealand taking second place. For the previous nine years running, Singapore has maintained its top spot, demonstrating its competitive advantage as a business-friendly country.
One of the outstanding aspects of forming a company in Singapore is that there are only two steps involved and they may both be finished online in a record-breaking 24 hours. Despite New Zealand’s high rating, it is interesting to note that it trailed Singapore significantly in areas that are important to businesses, such as taxation (Singapore #5; New Zealand #22) and cross-border trading (Singapore #1; New Zealand #27).
According to Forbes’ list of the “2014 Best Countries for Business,” there is a significant difference between the two nations in terms of trade freedom, innovation, technology, and taxes. Singapore demonstrated remarkable accomplishments in the areas of high trade freedom (#1), low taxation (#5), high levels of innovation (#9), and technology adoption (#7). New Zealand, in comparison, came in at #38 for trade openness, #23 for innovation, #21 for tax load, and #23 for technology.
TAXES
According to the PWC, IFC, and World Bank’s “2011 Paying Taxes Survey,” Singapore is the fourth-easiest country in the world to pay taxes, while New Zealand comes in at number 26.
According to Forbes’ 2009 Tax Misery and Reform Index, Singapore is ranked #11 and has a lower tax burden than New Zealand, which is ranked #13.
Singapore’s corporation tax rate of 17% is the third lowest among Asia-Pacific nations, according to a KPMG research from last year. In contrast, the corporation tax rate in New Zealand is 30%. The reduced rate of 28%, which will go into effect in 2012, won’t change how much more expensive New Zealand’s corporate tax rate is than Singapore’s. Furthermore, Singapore’s current GST rate of 7% is less than half of New Zealand’s GST rate of 15%.
In the World Bank’s 2015 Ease of Doing Business Report, Singapore ranks #5 for taxes while New Zealand ranks #22, demonstrating the discrepancy in the tax policies of the two nations.
IP PROTECTION
Intellectual property (IP) protection has grown in importance for businesses as a result of IP being an asset that generates revenue. Singapore has established realistic and efficient enforcement norms and has positioned itself as a regional IP hub. In the “2014-2015 Global Competitiveness Report” published by the World Economic Forum, Singapore is ranked second for IP protection, while New Zealand is ranked sixth.
GLOBAL COMPETITIVENESS
Singapore is the second-most competitive economy out of 144 economies, whereas New Zealand ranks #17 in terms of competitiveness, according to the World Economic Forum’s “2014-2015 Global Competitiveness Report.” A few of the characteristics that make conducting business in New Zealand challenging include an inadequate supply of infrastructure, limited access to funding, high tax rates, an ineffective government bureaucracy, stringent labor laws, and political unpredictability. Singapore, in comparison, receives high marks for its institutions, lack of corruption, efficient labor and goods markets, infrastructure, and sophisticated financial system.
Singapore is ranked as the second-most freest nation among 178 economies in the Heritage Foundation’s “2015 Index of Economic Freedom,” with New Zealand coming in third. Singapore receives good marks for elements like freedom of trade, freedom of investment, freedom of business, freedom from corruption, freedom of labor, and freedom of property rights. The domain of fiscal freedom is where Singapore and New Zealand most noticeably diverge. Due to its straightforward and cheap tax structure, Singapore receives a score of 91.2 on this metric while New Zealand only receives a score of 70.4 due to its high tax rates.
The IMD’s 2010 World Competitiveness Scoreboard places Singapore’s economy in first place, with New Zealand coming in at number 20.
TRADE OPENNESS
According to the “2010 Global Enabling Trade Report,” New Zealand is the sixth-most open economy, while Singapore is ranked first. Due to its open trade policy, minimal trade barriers, low tariff structure, excellent border administration, first-rate infrastructure, effective logistics, and affordable shipments, Singapore ranks first in the world. New Zealand fell short in a few areas, including the costs, paperwork requirements, and processing times for exporting and importing commodities, as well as the accessibility and calibre of its transportation infrastructure.
Singapore is ranked #1 for market access domestically and internationally, whereas New Zealand is ranked #37. Singapore scores #1 while New Zealand’s border management is ranked #5. New Zealand ranks #26 and #11 in terms of business environment, transportation infrastructure, and communications, while Singapore ranks #7 and #2.
BUREAUCRACY
According to Transparency International’s “2010 Corruptions Perceptions Index,” Singapore and New Zealand share the top rank as the least corrupt countries in the world.
According to IMD’s “2010 World Competitiveness Report,” Singapore is the nation with the highest level of transparency, with New Zealand coming in at #8.
According to the WEF’s “Global Competitiveness Report 2014-2015,” In comparison to Singapore, which ranks #1 for public trust in politicians and #2 for the burden of government regulation, New Zealand ranks #6 and #17.
WORKFORCE
Singapore is ranked third in terms of risk related to hiring, employing, and relocating personnel, whereas Auckland (New Zealand) is ranked #36 according to Aon Consulting’s “2010 People Risk Index.”
New Zealand doesn’t rank among the top 15 economies, while Singapore tops BERI’s “Labor Force Evaluation Measure as #1.
According to IMD’s “2010 World Competitiveness Yearbook,” Singapore has the seventh-most motivated workforce in the world.
According to a poll conducted by the INSEAD Business School in 2010, Singapore has the sixth-best highly skilled workforce in the world.
ENVIRONMENT FOR LIVING
According to HSBC’s “2010 Expat Experience Report,” Singapore is ranked #12 for expat quality of life.
According to Gallup’s “2010 Potential Net Migration Index,” Singapore is the most popular immigration destination worldwide.
Singapore is ranked as the finest place in the world for Asians to reside by ECA International’s “2010 Location Ratings System,” while Wellington comes in at number ten. According to Lee Quane, Regional Director, Asia, ECA International, “Singapore’s high quality infrastructure and health services, combined with low health risks, air pollution, crime rates, and a multicultural population, help make the city an easy environment for Asian assignees to reside in.”
According to the IMD’s 2010 World Competitiveness Yearbook, Singapore is rated as the finest country in Asia for foreign talent to work.
Singapore ranks 4th for the financial quality of life of expats, according to HSBC’s “2010 Expat Economics Report.”
AT-A-GLANCE COUNTRY RANKINGS: SINGAPORE VS. NEW ZEALAND
Year
Category
Singapore’s Rank
New Zealand’s Rank
Source
2015
Ease of Doing Business
1
2
World Bank, 2015 Ease of Doing Business Report
2015
Freest Economy in the World
2
3
Heritage Foundation’s Index of Economic Freedom
2014 – 2015
Most Competitive Economy in the World
2
17
World Economic Forum, Global Competitiveness Report
2011
Ease of Paying Taxes
4
26
PWC, IFC, World Bank’s 2011 Paying Taxes Survey
2010
Country with the Most Open Trade
1
6
World Economic Forum, Global Enabling Trade Report
2010
Most Competitive Economy in the World
1
20
IMD, World Competitiveness Yearbook
2010
Country with the Most Transparency
1
8
IMD’s World Competitiveness Report
2010
Best IP Protection in the World
3
7
World Economic Forum, Global Competitiveness Report
2010
The Best Workforce on Earth
1
–
BERI’s Labor Force Evaluation Measure
2010
The City with the Lowest Employment and Relocation Risk in the World
