In this comparative report, we look at the differences between doing business in Singapore and in Thailand.
This report refers to data from World Bank’s 2014 ‘Ease of Doing Business’ report and World Economic Forum’s Global Competitiveness 2013 – 2014 as well as 2014 Global Enabling Trade reports. It measures five indicators, namely company incorporation, corporate tax rate, foreign investment friendliness, intellectual property protection and workforce.
As businesses all over the world adopt a look-east policy, Singapore and Thailand, two widely recognized South East Asian countries, are often considered as jurisdictions suitable for a company’s Asian headquarters.
Thailand has scored an overall 18th rank in the ‘Doing Business’ survey by the World Bank last year, not too far from Singapore, which sits at first position.
|World Bank’s Doing Business (DB) 2014
Singapore vs. Thailand
|Starting a business||3||91|
|Dealing with construction permits||3||14|
|Trading across borders||1||24|
Given its low cost competitiveness, Thailand attracts businesses from the western developed countries. And though Thailand made some progress in business facilitation during the past five years, it has yet to catch up with Singapore.
When it comes to business incorporation, Singapore is easier than Thailand, according to the World Bank Doing Business report. Thailand stands at 91st position when it comes to the ‘Starting a business’, compared to the third position earned by Singapore. Incorporating a company in Singapore takes 1-2 days and only 3 procedures. On the other hand, starting a company in Thailand takes 27.5 days and 4 procedures.
In addition, getting a construction permit is much easier and faster in Singapore. According to Doing Business report, it takes only 26 days to obtain a construction permit in Singapore, compared to about 157 days in Thailand. Obtaining a building permit from the Bangkok Metropolitan Authority takes the longest time of about 73 days. In Singapore, obtaining approval for a building plan takes 10 days.
The corporate tax rate in Singapore is capped at 17%, while it stands at 20% in Thailand. In the Doing Business report, World Bank ranked Singapore 5th worldwide for its attractive tax rates and efficient online tax filing as well as payment procedures. Thailand, on the other hand, ranks at 70th position for the same parameter.
The Doing Business report notes that businesses in Thailand make 22 tax payments a year and spend 264 hours a year on filing, preparing and paying taxes. In contrast, Singapore businesses make five tax payments a year and spend 82 hours a year filing, preparing and paying taxes.
For more details on taxation in Singapore, please visit our page on Singapore taxation.
Foreign investment friendliness
The Singapore government offers numerous incentives for foreign businesses to set their shop in the city-state. Singapore supports an open trade policy and has few barriers to external trade transactions. The 2014 Global Enabling Trade report ranked Singapore at the top position due to its trade-friendly regulations and a business enabling environment. Thailand stood at the 57th place.
Intellectual property protection
Protection of Intellectual Property (IP) rights is a crucial element for gaining confidence of foreign investors in an innovation and knowledge-based economy. According to the World Economic Forum’s Global Competitiveness Report 2013-2014, Singapore stands as second best in the world and first in Asia for having a robust IP protection framework.
Prior to this, the Political & Economic Risk Consultancy Report 2011 and the International Property Rights Index 2012 have similarly ranked Singapore top in Asia for intellectual property protection. The Global Competitiveness Report ranks Thailand at 102nd position in this category.
|WEF’s Global Competitiveness Index (GCI)
Singapore vs. Thailand
|Basic Requirements (60%)||1||49|
|Health and primary education||2||81|
|Efficiency Enhancers (35%)||2||40|
|Higher education and training||2||66|
|Goods market efficiency||1||34|
|Labor market efficiency||1||62|
|Financial market development||2||32|
|Innovation and sophistication factors (5%)||13||52|
Singapore offers a highly-educated and skilled workforce both domestically and from abroad. The Global Competitiveness Report ranks Singapore at the top position for excellent ‘Labour Market Efficiency’. However, it ranked Thailand 62nd for the same measure.
In a Nutshell
As indicated above, Singapore and Thailand remain ideal jurisdictions for relocating your company’s headquarters. Thailand scored an overall 18th rank in the Ease of Doing Business survey by the World Bank last year, not too far from Singapore, which has maintained its top position for seven consecutive years. But considering the low corporate tax rates, robust IP protection regime and skilled workforce, Singapore edges past Thailand in its appeal to foreign investors.