Doing Business - Singapore vs France
Besides choosing the right business entity, entrepreneurs have to make a decision on where to operate from. Choosing the right business location is crucial to the success of one’s business, especially if starting-up a small to medium enterprise (SME). A careful analysis of strengths, weaknesses, opportunities and risks associated with setting up a business in a given market is vital. For many entrepreneurs, it is time-consuming to consolidate information and make a sound assessment based on the variety of business studies, reports and surveys issued every year. Hence, country guides on business environments are useful tools that help entrepreneurs compare business locations and make an informed decision.
- The World Bank has consistently ranked Singapore as the world’s easiest place to do business. Singapore has maintained its number one position in its latest ‘Doing Business Report’. Its ability to stay at the top of the list proves that it has the necessary elements that make it a great place to start and run a business. France, on the other hand was ranked #31. Singapore’s strengths lie in the areas of trading across borders (ranked #1), protecting minority investors (ranked #3), enforcing contracts (ranked #1) and starting a business (ranked #6). France did not perform as well when compared to Singapore in the same areas. It ranked #10 for trading across borders, #17 for protecting minority investors, #10 for enforcing contracts and #28 for starting a business. When it comes to setting up a business, it takes five procedures and 4.5 days to do so in France. To incorporate company in Singapore, it takes only 24 hours and two procedures.
- According to Forbes ‘2010 Best Countries for Business Index’, Singapore is the fifth-best country in the world for business. France is on the list as well but comes in at #21. France has a lower ranking due to factors such as investor protection (Singapore ranked #2 vs France’s #56 rank), red tape (Singapore ranked #4 vs France’s #18 rank) and tax burden (Singapore ranked #4 vs France’s #41 rank).
- The PWC, IFC, World Bank’s ‘2015 Paying Taxes Report‘ ranked Singapore #5 for ease of paying taxes while France came in #95.
- The World Bank ‘2011 Doing Business Report‘ also ranked Singapore #4 for paying taxes while France came in at #55. Both France and Singapore have improved their rankings in this category since 2010.
- When it comes to tax burdens, Forbes’ ‘2010 Best Countries for Business Index’ ranked Singapore #4 while France ranked #41. Prior to that, in Forbes’ ‘2009 Tax Misery & Reform Index‘, Singapore was ranked #11, indicating that tax burden on its residents were lower than in France (ranked #65 and worst in the list). While personal income tax rates in France range from 0% to 40%, personal income taxation starts at 0% and ends at 20% for residents and remains at a flat rate of 15% for non-residents in Singapore. France’s corporate tax rate is 33.3% while Singapore’s corporate income tax rate is 8.5% for profits up to S$300,000 and a flat 17% for profits above that amount. Additionally, France imposes a 33% capital gains on residents and non-residents of France. It imposes a 19% capital gain tax on EU residents as social charges are not imposed. In Singapore, there are no capital gains or dividends tax. Goods and services tax is also much higher in France than in Singapore (19.6% vs. 7%). France imposes only 2 more annual tax payments than in Singapore.
- Countries that have in a strong intellectual property protection system in place have been proven to flourish the most. According to the World Economic Forum’s ‘2014 – 2015 Global Competitiveness Report‘, Singapore has bumped up one position to have the second-best IP protection regime in the world, while France has the 7th best.
- In the World Economic Forum’s ‘2014 – 2015 Global Competitiveness Report’, Singapore is the second-most competitive economy among 144 economies while France’s competitiveness rank is #23. France’s lower ranking is due its problematic factors including restrictive labor regulations, high tax rates and cumbersome tax regulations, lower access to financing, inefficient government bureaucracy, shortage of educated workforce and political instability. Singapore’s strong suit is precisely in these areas. Singapore has low corporate and income taxation, liberal labor laws, an abundant pool of funding, efficient and stable government and a talented workforce.
- In the Heritage Foundation’s ‘2015 Index of Economic Freedom’ Singapore emerged as the second freest economy among 178 countries while France came in as the 73rd freest. Singapore scored high points on areas such business freedom, trade freedom, government spending, property rights, labor freedom and freedom from corruption. It has also improved in terms of business, labour and monetary freedom since 2014. Singapore superceded France in terms of fiscal freedom (Singapore’s 91.2 vs. France’s 47.5 points), labor freedom (Singapore’s 96.9 vs. France’s 43.5 points) and government spending (Singapore’s 93.8 vs. France’s 2.5 points).
- In the IMD ‘2011 World Competitiveness Yearbook’ Singapore clinched the #3 spot while France was ranked in the 29th position.
Openness to Trade
- Data from the World Economic Forum’s ‘2010 Global Enabling Trade Report’ shows that when it comes to openness to trade, Singapore remains at the number one spot since 2009 while France drops to the 20th place from #17 in 2009. The report, which is conducted on 125 countries, saw Singapore emerging tops due to its open trade policy, stable regulatory environment, low trade barriers, low tariff structure, efficient border administration, sophisticated transport and port infrastructure, logistics efficiency, and affordability of shipments. France did not perform as well as Singapore due to its low domestic and foreign market access characterized by the the complexity, number and types of tariffs it imposes, its cumbersome immigration framework for hiring foreign labor, the business costs of terrorism and higher costs of importing and exporting.
- While France ranked #97 for domestic and foreign market access and #10 for efficiency of import-export procedures, Singapore ranked #1 on both counts. In terms of business environment France ranks #27 while Singapore ranks #2.
- According to the ‘2014 Corruptions Perceptions Index‘ released by Transparency International, a global coalition against corruption, Singapore was perceived as a “very clean” and non-corrupt country and was ranked #7. France was considered clean as well but was ranked #26.
- The WEF’s ‘2014 – 2015 Global Competitiveness Report’ also reveals that Singapore has once again come up tops with the highest public trust of politicians and 2nd for the least burden of government regulation. In comparison, France ranks #42 and #121 respectively in both areas.
- In 2010, the Political and Economic Risk Consultancy (PERC) accorded Singapore the status of having the most efficient bureaucracy in Asia.
- Singapore’s top position in BERI’s ‘2010 – 2011 Labour Force Evaluation Measure‘ for more than 30 years is testament to its ability to attract and retain the world’s best labor force. On the other hand, France came in at #14.
- Aon Consulting’s ‘2010 People Risk Index‘ reveals that Singapore is the third-lowest risk city in the world for employing people while France (Paris) is the 30th riskiest.
- The WEF ‘2011 – 2012 Global Competitiveness Report’ ranks Singapore #2 in terms of labor/employee relations. France comes far behind in the list at #133.
- In 2010, INSEAD ranked Singapore’s workforce as the sixth-best in the world.
- The ‘2010 IMD, World Competitiveness Yearbook’ shows that Singapore is the second most best country to work in while France comes in at #15.
- According to Gallup’s ‘2010 Potential Net Migration Index‘, Singapore is the most desirable immigration destination while France is the 9th most desirable.
Country Rankings: SINGAPORE VS. FRANCE
|Year||Category||Singapore’s Rank||France’s Rank||Source|
|2015||World’s Best Labor Force||1||14||BERI’s Labor Force Evaluation Measure|
|2015||World’s Freest Economy||2||73||Heritage Foundation’s Index of Economic Freedom|
|2014 – 2015||World’s Most Competitive Economy||2||23||World Economic Forum, Global Competitiveness Report|
|2015||World’s Most Competitive Economy||3||32||IMD, World Competitiveness Yearbook|
|2014 – 2015||World’s Best IP Protection||2||13||World Economic Forum, Global Competitiveness Report|
|2015||Ease of Paying Taxes||5||95||PWC, IFC, World Bank’s Paying Taxes Survey|
|2014||Ease of Doing Business||1||31||World Bank, Ease of Doing Business Report|
|2014||Country with Least Corruption Perception||7||26||Transparency International’s Corruption Perceptions Index|
|2010||Country Most Open to Trade||1||20||World Economic Forum, Global Enabling Trade Report|
|2010||World’s Lowest Risk City for Employing and
|Aon Consulting’s People Risk Index|
|2010||Most Desirable Immigration Destination||1||9||Gallup Potential Net Migration Index|
|2010||World’s Best Country for Business||5||21||Forbes’ Best Countries for Business Index|