Doing Business - Singapore vs Germany

Every entrepreneur who starts up a company envisions growth for his business. In order to bring that dream to fruition, it is vital to choose the right environment with the right conditions to set up a business. Hence, entrepreneurs should always consider various factors before making the decision to set up their business in a new country. A careful analysis of strengths, weaknesses, opportunities and risks associated with setting up a business in a given market is crucial.

This report is a comprehensive comparative analysis of doing business in Singapore and Germany, providing an overview on different factors such as business environment, taxes, IP protection, openness to trade, and labour force among others.

Business Environment

  • The World Bank has ranked Singapore in second place as the world’s easiest place to do business in its 2018 'Doing Business Report'. Germany was ranked #24. Below is an overview on some of the key factors that affected the ranking of each country:
(Ranking based on 190 countries)  Singapore  Germany 
Starting a business  3 114
Protecting minority investors  7 72
Paying taxes  43
Trading across borders  45 40
Resolving insolvency  27 4
  • According to Forbes '2018 Best Countries for Business Index', Singapore ranks 8th in the world for business and Germany is ranked at #14.

Taxes

  • When it comes to tax burdens, personal income tax rates in Germany range from 0% to 47.5%, while personal income taxation starts at 0% and ends at 20% for income above S$320,000 in Singapore. Germany’s federal corporate tax rate is 15.8% while the municipal trade tax ranges between 14%-17%. The effective corporate tax rate is between 30%-33%. Singapore’s corporate income tax rate is 8.5% for profits up to S$300,000 and a flat 17% for profits above S$300,000.

IP Protection

  • Countries that have in a strong intellectual property system in place have been proven to flourish the most. According to the World Economic Forum’s '2018 Global Competitiveness Report', Singapore ranks 3rd on IP protection regime in the world and Germany places at 21st.

Global Competitiveness

  • Both countries are equally competitive as shown by their rankings in the World Economic Forum’s ‘2018 Global Competitiveness Report’. Singapore is the second most competitive economy among 140 economies and Germany ranks as the third most competitive economy..
  • In the Heritage Foundation’s ‘2018 Index of Economic Freedom’ Singapore emerged as the second freest economy among 174 countries while Germany came in at #25. Singapore saw improvements on areas such trade freedom, government spending, judicial effectiveness and government integrity. On the other hand, Germany also saw improvements in areas such as fiscal health, government spending and government integrity.
     

Openness to Trade

  • Data from the World Economic Forum’s ‘2016 Global Enabling Trade Report’ shows that when it comes to openness to trade, Singapore takes the number one spot out of 136 countries while Germany takes the 9th place. Singapore emerged number one 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.

Bureaucracy

  • According to the ‘2017 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 #6. Germany was ranked #12.
  • The WEF’s ‘2017 – 2018 Global Competitiveness Report’ also reveals that Singapore has the highest public trust of politicians and the least burden of government regulation. In comparison, Germany ranks #13 and #7 respectively.

Labor Force

  • The World Economic’s Forum Global Competitiveness Report 2018, measures some of the key factors of labour force, and here is how each country ranks:
(Ranking based on 140 countries)  Singapore  Germany 
Digital skills among population  16 
Ease of finding skilled employees 
Cooperation in labour-employer relations  19 
Ease of hiring foreign labour  97  11 
Labour tax rate  75  97 

Rankings at a glance: Singapore and Germany

Year  Category  Singapore's rank  Germany's rank Source 
2018 Ease of Doing Business 2 24 World Bank, 2018 Ease of Doing Business Report
2018 World's Most Competitive Economy 2 World Economic Forum, Global Competitiveness Report 2018
2018 World's Best Country for Business 8 14 Forbes' Best Countries for Business Index 
2019 World's Freest Economy 2 24  Heritage Foundation's Index of Economic Freedom
2016 Country Most Open to Trade 1 World Economic Forum, Global Enabling Trade Report
2018 Country with Least Corruption Perception 3 11  Transparency International, Corruptions Perception Index
2018 World's Best IP Protection 3 21 World Economic Forum, Global Competitiveness Report
 
 
 
 
 
 
 
 


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