Doing Business - Singapore vs Canada
There are several factors that must be taken into consideration when a company decides to expand its market or establish itself on a global level. It is important to assess which foreign market to enter, the cost of setting up business operations in a given country, the risks involved, and the ease with which business objectives can be accomplished in the chosen destination. Each business jurisdiction has differing levels of risks, legal formalities, opportunities, advantages, and disadvantages.
- Singapore has been consistently ranked by the World Bank as the easiest place to do business in the world. Its rank in the ‘2010 Ease of Doing Business Report‘ was #1 while Canada ranked #8. Singapore demonstrated a clear advantage over Canada in the areas of ease of getting credit, protecting investors, paying taxes, and trading across borders.
- Although Forbes’ ‘2010 Best Countries for Business‘ list ranked Canada (#4) one step higher than Singapore (#5) it lagged behind the latter in most areas. For instance, Singapore’s rank for trade freedom was #1 while Canada’s was #6. In terms of monetary freedom Canada (#45) was way behind Singapore (#9). Singapore was ahead of Canada in terms of property rights, innovation, and technology. Singapore is less corrupt than Canada (#3 vs. #8) and also provides more protection to investors (#2 vs. #5).
- Singapore’s tax system lends itself a competitive advantage over most economies, including Canada.
- Singapore’s #11 rank in Forbes’ ‘2009 Tax Misery Index’ is testimony to its low tax rates and simple tax system while Canada’s #33 position indicates the higher burden of tax it imposes on its residents.
- With a tax burden score of #4 In Forbes ‘2010 Best Countries for Business‘ list, Singapore is more tax friendly than Canada, which scored #23 on the parameter.
- The World Economic Forum’s (WEF) ‘2010 Global Competitiveness Report‘ ranked Singapore #24 in the world for its total tax rate while Canada was ranked #79.
- Singapore’s strong IP regime is a boon for businesses that setup a Singapore company.
- Singapore was placed in the 8th spot for property protection by Forbes in its 2010 ‘Best Countries for Business‘ Index while Canada was accorded the 12th position.
- Singapore’s IP regime is the 3rd best in the world according to the WEF’s ‘2010 Global Competitiveness Report‘ while Canada’s IP regime ranked #13.
- he WEF ranked Singapore’s economy #3 in its ‘2010 Global Competitiveness Report‘ while Canada was accorded the 10th spot. Canada’s tax rates, access to financing, inefficient government bureaucracy, restrictive labor regulations, complex tax regulations, and inadequate supply of infrastructure were barriers to its competitiveness. By contrast, Singapore’s strong IP regime, efficient bureaucracy, corrupt-free environment, high quality infrastructure, low tax system, flexible labor market, easy access to finance, and high degree of technological innovation were its competitive advantages.
- The IMD ‘2010 World Competitiveness Scorecard‘ shows Singapore in the top position while Canada secured the 7th rank. Singapore is said to have toppled US from its number one position that it had held for 16 long years. The IMD also conducted a Debt Stress Test, where Singapore fared well. Its debt was 48.01% of its GDP while Canada will be able revert to a “bearable” public-debt level of 60% of its GDP only by 2025.
- Singapore’s rank in Heritage Foundation’s ‘2010 Index of Economic Freedom‘ was #2 while Canada came in 7th. Singapore scored over Canada in areas such as starting a business, barriers to cross-border trade, tax rates, government spending, labor market, investment freedom, and corruption.
Openness to Trade
- Singapore’s economy is the most open to trade according to the WEF’s ‘Global Enabling Trade Report 2010-2011‘ while Canada’s economy is the 8th most open to trade. Singapore featured in the top 10 on 43 out of 56 indicators. Its outstanding performance is attributed to its low trade tariffs, efficient customs services, efficient import/export procedures, transparent border administration, top quality transport infrastructure and efficient regulatory environment. By contrast, Canada placed below the top 10 on many of the parameters. It fared poorly due to its complex tariff structure, burden of customs procedures, and high cost of importing/exporting goods.
- According to the ‘2010 Global Innovation Index‘ released by INSEAD and the Confederation of Indian Industry Singapore ranks #7 in the world for innovation while Canada is positioned as the 12th most innovative economy. According to the Index, Singapore leads in the field of innovation and entrepreneurship owing to its institutions (#1), business sophistication (#3) and market sophistication (#6). Canada ranked 11th, 14th, and 8th on the same pillars. Singapore ranked 13th in Creative Outputs and Well Being while Canada ranked 19th.
- In almost all rankings Singapore has been consistently praised for its efficient bureaucracy that is a key enabler for doing business in the country.
- According to the WEF, Singapore has the Highest Public Trust of Politicians, Least Burden of Government Regulation, and Highest Transparency of Government Policy Making. Canada ranked #23, #41, and #11 on the same indicators.
- Singapore’s score in Transparency International’s ‘2010 Corruption Perceptions Index‘ was #1 while Canada’s score was #6.
- Singapore’s highly competitive and talented labor force is one of its strengths that attracts foreign companies to setup an operational base in the region.
- According to BERI’s ‘2010 Labor Force Evaluation Measure‘, Singapore’s workforce continues to remain the best in the world while Canada ranked #16 on the Index.
- Singapore has the best employer/employee relations and the most productive workforce in the world according to the WEF while Canada’s score on the same parameters were #28 and #30 respectively.
- According to IMD’s ‘2010 World Competitiveness Yearbook‘ Singapore has the 2nd best business conducive labor relations while Canada’s are the 11th best.
- Singapore is the most desirable immigration hot-spot as per Gallup’s ‘2010 Potential Net Migration Index’ whereas Canada’s is only the 4th most appealing destination.
- ECA International’s ‘2010 Location Ratings System‘ rated Singapore as the best location in the world for Asians to live while Vancouver (Canada) was only in the 10th best.
- Foreign talent rank Singapore as the world’s 2nd best country to work in according to the IMD ‘2010 World Competitiveness Yearbook‘ while Canada reigned in the 9th spot.
- According to HSBC’s ‘2010 Exapt Economics Report‘, Singapore ranks #4 in the world for expats’ financial quality of life while Canada rank was #18.
At-a-glance Country Rankings: Singapore vs. Canada
|Year||Category||Singapore’s Rank||Canada’s Rank||Source|
|2010||Ease of Doing Business||1||8||World Bank, Ease of Doing Business Report|
|2009||Country with Lowest Tax Misery||11||33||Forbes Tax Misery and Reform Index|
|2010||World’s Most Competitive Economy||3||10||World Economic Forum, Global Competitiveness Report|
|2010||Country Most Open to Trade||1||8||World Economic Forum, Global Enabling Trade Report|
|2010||World’s Most Competitive Economy||1||7||IMD, World Competitiveness Yearbook|
|2010||World’s Most Innovative Economy||7||12||INSEAD and the Confederation of Indian Industry’s Global Innovation Index|
|2010||World’s Freest Economy||2||7||Heritage Foundation’s Index of Economic Freedom|
|2010||World’s Most Business Conducive Labor Relations||2||11||IMD, World Competitiveness Yearbook|
|2010||World’s Best Labor Force||1||16||BERI’s Labor Force Evaluation Measure|
|2010||Country with Least Corruption Perception||1||6||Transparency International’s Corruption Perceptions Index|
|2010||World’s Most Desirable Immigration Hot-spot||1||4||Gallup’s Potential Net Migration Index|
|2010||World’s Best Location for Asians to Live||1||10(Vancouver)||ECA International’s Location Ratings System|
|2010||World’s Best Country to Work In||2||9||IMD, World Competitiveness Yearbook|
|2010||Best Financial Quality of Life for Expats||4||18||HSBC’s Expat Economics Report|
On a Final Note
The above analysis reaffirms Singapore’s dominance as a global business and commercial hub. Each year thousands of foreign companies and entrepreneurs choose to incorporate a Singapire company owing to its many advantages. With a visible disparity in tax rates, trading policies, IP protection regime, bureaucracy, and living environment Singapore scores over Canada as a place to live, work, and play.