Doing Business - Singapore vs United Kingdom

Singapore, on the other hand, is one of the smallest countries in the world and once came under British rule. With sheer guts and gumption since self-independence, however, Singapore successfully leapt from Third World to First – within a generation. Today, the city-state’s foreign exchange centre is the third-largest globally, after London and New York.

When choosing to do business in Singapore or the UK, a business must note the few but distinct differences between the jurisdictions, in areas such as the workforce, immigration and taxation. This report serves as a comparative guide. 

Economic Overview

The UK is the fifth largest economy in the world and is fueled by the strength of its services sector, which accounts for more than 75% of its total GDP. In fact, the largest UK exports are financial services as a result of the credibility the country has gained in this sector. In addition, the country is the world’s 11th biggest manufacturing nation. Key industries include automotives, pharmaceuticals, and aerospace. 
Strategically located in the heart of key Asian trading routes, Singapore is Asia’s most competitive business country. Like the UK, while growth is fueled by a thriving financial services sector, exports in electronics and chemicals provide the main sources of revenue for the economy. When it comes to GDP per capita, Singapore ranks higher at #10 compared to the UK at #23. 

Business Environment

For factors such as corporate tax rates, set-up costs, energy prices and transparency, the UK stands at #7 in the ranking of 190 economies on the ease of doing business (World Bank Doing Business Report 2018). Singapore, on the other hand, ranks 2nd in the world after New Zealand. The following are key comparatives at a glance: 
• Starting a business (Singapore) #6; Starting a business (UK) #14
• Protecting minority investors (Singapore) #4; Protecting minority investors (UK) #10
• Enforcing contracts (Singapore) #2; Enforcing contracts (UK) #31
The UK comprises 3 legal systems – the English law applies in England and Wales, while the Northern Ireland law applies to Northern Ireland. 

Scots law, which applies in Scotland, is based on civil law principals with common law elements. 

As Singapore inherited its legal system from the British, who founded modern Singapore, judges in Singapore continue to refer to English case law, as well as relevant Singapore cases. The law, however, has been modified to some extent by amendments made to statutes. 

In the World Justice Report’s Rule of Law Report 2017-2018, Singapore ranked 13th in the world, while the UK is ranked 10th. 

Workforce

The Labor Force Participation Rate (LFPR) in the UK is recorded at 78.8%, while that of Singapore is 67.7%. The female LFPRs in the UK and Singapore were comparable at 57% and 60% in 2017 respectively, while the male LFPRs were recorded at 68% and 77% respectively. 

The minimum wage in the UK is £7.83 (age 25 and above), while such is not prescribed in Singapore. 

In the UK, all workers have the legal right to ask for flexible working arrangements, after 26 weeks of employment. In Singapore, however, companies can apply for grants and incentives for its flexible work arrangements. 

Business Language

British English is the English language spoken and written in the UK. Other major languages include Welsh and Scots. While two-thirds of UK citizens cannot speak any foreign language, one-third can speak and understand French, German and Spanish.

English is also the main language used for business in Singapore. Additionally, in accordance to their ethnicities, most Singaporeans also receive formal education on their second languages, which include Malay, Mandarin and Tamil. 

Business Incorporation & Set-Up

The four main types of business entities in the UK are Sole Trader, Partnership, Limited Liability Partnership and Limited Liability Company. Similarly, business structures in Singapore include the Private Limited Company, Subsidiary Company, Representative Office and Sole Proprietorship. 

Starting a business in the UK requires 4 procedures and take 4.5 days, whereas incorporating in Singapore requires 2 steps, which can be completed within a day. 

Filing Requirements

Private companies in the UK are not required to hold any general meetings. However, private limited companies must file full annual accounts and company tax returns with the Companies House and Her Majesty’s Revenue and Customs (HMRC). Public companies, however, must hold annual general meetings (AGMs) within 6months of the end of each financial year. 

All Singapore incorporated companies are required to hold AGMs and file annual returns. 

Immigration Requirements

Individuals looking to set up a business in the UK can apply for a Tier 1 (Entrepreneur) visa. This visa is valid for a maximum of 3 years and 4 months and also requires the individual to have access to investment funds totaling more than £50,000. Alternatively, investors with an access to at least £2 million in investment funds can apply for the Tier 1 (Investor) visa. 

In Singapore, an Employment Pass can be issued to foreign professionals, managers and executives, who are required to draw a minimum monthly salary of S$3,600. In addition, foreign entrepreneurs wanting to start and operate a new business in Singapore can apply for the EntrePass. 

Income Tax

Corporate Tax

Withholding Tax

Foreign-Sourced Income

Country Rankings at a Glance

On a Final Note