In the current economic climate, business development outside of one’s country has become a more frequent and evident consideration for companies. However, choosing the incorrect jurisdiction to open a firm in might be a costly and Fatal mistake.
When choosing a foreign jurisdiction, most business owners and investors have a tendency to focus on a small number of isolated elements and frequently overlook the immense challenges of establishing a new region. It is simple to exaggerate how desirable a foreign business location is.
Therefore, it is crucial to carefully weigh the chances, advantages, disadvantages, and risks of starting a firm in a specific industry. Country guides on business environments are an effective tool in this regard for comparing and contrasting two or more business locations.
Singapore
Switzerland
Corporate Tax
0% (on Foreign Profits)
14.93%
Withholding Tax
0% (on Dividends)
35%
Time to Incorporate a Business
3 days
2 – 4 weeks
The report below compares doing business in Singapore to doing business in Switzerland on a wide range of factors, including business environment, taxes, IP protection, openness to trade, bureaucracy, labour force, and expat living conditions.
Business Environment
Singapore has continuously been regarded as the easiest country to do business in the world by the World Bank. The nation has maintained its top ranking in the most recent “Doing Business Report” since 2010. The fact that Singapore placed highly on the index suggests that its regulatory framework is the most favourable for establishing and running a business.
Switzerland, however, came in at position 26. The areas where Singapore excels the greatest include enforcing contracts (ranked #1), paying taxes (ranked #5), safeguarding investors (ranked #1), and starting a business (ranked #10). When compared to Singapore on the same characteristics, Switzerland showed a significant difference gap. The nation ranks #69 for starting a business, #19 for paying taxes, #46 for enforcing contracts, and #105 for protecting investors. In Singapore, a corporation can be incorporated in just 24 hours and with only two procedures, as opposed to six steps and 20 days in Switzerland.
The Forbes ‘2015 Best Countries for Business’ Index places Switzerland at number twelve and Singapore at number eight in the world for doing business. The reasons for Switzerland’s lower rating include things like tax burden (Singapore ranked #5 vs. Switzerland ranked #18), red tape (Singapore ranked #10 vs. Switzerland ranked #58), and investor protection (Singapore ranked #1 vs. Switzerland ranked #92).
Taxes
Singapore is ranked #5 for simplicity of tax payment in the 2015 Paying Taxes Report by PWC, IFC, and the World Bank, while Switzerland is ranked #19.
According to Forbes’ “2009 Tax Misery & Reform Index,” Switzerland is ranked 41st, suggesting that its citizens are subject to heavier tax loads than Singapore, which is ranked 11th. The highest combined personal income tax rates in Switzerland range from about 20% to over 45%. Singapore has a progressive personal income tax system with rates that range from 0% for income under S$320,000 to 20% for income over S$320,000. Singapore has a corporate income tax rate of 17%, while Switzerland has a federal company tax rate of 8.5% and a cantonal corporate tax rate that can reach 20%.
The 2016 Doing Business Report by the World Bank, which places Singapore fourth for tax payment while demoting Switzerland to the 16th spot, and the 2015 “Best Countries for Business Index” by Forbes, which places Singapore fifth for tax burden while placing Switzerland eighth, are two other studies that highlight the startling taxation disparity between Switzerland and Singapore.
IP Protection
The most innovative and affluent nations are frequently those that uphold strict intellectual property laws. In this regard, according to the “2014-2015 Global Competitiveness Report” of the World Economic Forum, Singapore has the second-best IP protection system in the world. According to the research, Switzerland has the fourth-best IP protection.
International Competiveness
The World Economic Forum’s “2014-2015 Global Competitiveness Report” names Switzerland as the most competitive economy in the world, surpassing Singapore (ranked #2), but Singapore’s institutions, infrastructure, goods market efficiency, higher education & training, and financial market development scored higher than Switzerland’s.
Singapore is ranked as the second-freest economy in the world by the Heritage Foundation’s “2015 Index of Economic Freedom,” while Switzerland is ranked fifth. Singapore’s superiority over Switzerland, which came in with a score of only 78.1 points, can be seen by its score of 96.9 for business freedom. With a score of 91.2 compared to 70.3, Singapore performs better than Switzerland in the area of fiscal independence. This is due to Switzerland’s tax structure, which is more onerous at the cantonal than the federal level.
According to IMD’s “2015 World Competitiveness Yearbook,” Singapore has the third-most competitive economy in the world, with Switzerland having the fourth-most competitive economy.
Openness to Trade
The World Economic Forum’s 2014 Global Enabling Commerce Report places Singapore’s economy first, reiterating that it has the most open trade. Taking up position 7, Switzerland lagged behind.
Singapore comes in #1 for infrastructure and border control, and second for market access and business climate. Since 99.9% of imports enter duty-free, the trade-weighted applicable tariff rate is virtually nil (0.03%, the second lowest). The paperwork involved in importing and exporting items is minimal (four documents on average), quick (three to five days on average), and affordable.
Bureaucracy
According to Transparency International’s “2014 Corruptions Perceptions Index,” Singapore, which is rated #7 on the index, is thought to have a low level of corruption, while Switzerland, which is placed #5, is thought to have a lower level of corruption overall.
According to the WEF’s “2014-2015 Global Competitiveness Report,” Singapore has the highest level of public trust in politicians and ranks #2 for having the least amount of government regulation. Switzerland, in comparison, comes in at both #8 and #12 based on the same metrics.
According to the Political and Economic Risk Consultancy (PERC), Singapore has Asia’s most effective bureaucracy as of 2010.
Labour-Force
Singapore is the third-lowest risk city in the world for hiring people, according to Aon Consulting’s “2010 People Risk Index,” whereas Zurich (Switzerland) is the sixth-lowest risk city for hiring and managing personnel.
For more than 30 years, Singapore has consistently held the top spot in BERI’s “Labour Force Evaluation Measure,” claiming to have the best labour force in the entire globe. On the index, Switzerland is ranked fourth.
Singapore’s labour force was named sixth best in the world by INSEAD in 2010.
Environment for Living
Singapore is ranked as the top immigration destination in Gallup’s “2010 Potential Net Migration Index,” while Switzerland is merely the fifth most desirable.
Singapore was named the top place in the world for Asians to reside in 2010 by ECA International’s “Location Ratings System,” while Bern, Switzerland, came in at number 13.
According to the “2015 HSBC Expat Economics Report,” Singapore is ranked #2 for its expats’ financial quality of life, whereas Switzerland is ranked #15.
SINGAPORE RANKINGS VS. SWITZERLAND IN A NUTSHELL
Year
Category
Singapore’s Rank
Switzerland’s Rank
Source
2016
Ease of Doing Business
1
26
World Bank, 2016 Ease of Doing Business Report
2014-2015
World’s Most Competitive Economy
2
1
World Economic Forum, Global Competitiveness Report
2014
Country Most Open to Trade
1
7
World Economic Forum, Global Enabling Trade Report
2014
Country with Least Corruption Perception
7
5
Transparency International’s Corruption Perceptions Index
