Both Singapore and Netherlands have been praised for their growing economic and business hubs that welcome local and foreign businesses alike. In this comparative article, we’ll be comparing the similarities and differences between doing business in Singapore, and doing business in Netherlands to determine which country is more suitable for your foreign business.
The World Bank Doing Business Report in Netherlands vs Singapore
The World Bank publishes annual assessments measuring the Ease of Doing Business in 190 economies. The DB score is used to rate countries, and the greater the DB score, the higher the rank. Singapore currently holds second place with an 86.2 rating, whereas the Netherlands has a 76.1 rating, ranking 42nd overall.
The DB score is based on a number of categories that factor in the ease of doing business in the country, where countries are ranked depending on each category. A rank of 1 means the country is the global leader in that category.
Doing Business: Singapore vs Netherlands 2020
World Bank
Doing Business: Netherlands vs Singapore
Economic Overview
Singapore is renowned for being one of the most business-friendly nations in the world, coming in second place overall in the World Bank's Ease of Doing Business rankings. With subsidies and tax breaks to entice enterprises, Singapore's Accounting and Corporate Regulatory Authority (ACRA) actually makes it simple for entrepreneurs to launch and run firms there.
The Netherlands is known as a good gateway in establishing business in Europe. While the nation ranks 4nd overall in ease of doing business, it tops the world rankings of ease in trading across borders as the EU-nation is open to trade to multiple countries.
Business Environment
Structure and planning are among the strengths of the Netherlands’ business environment. Most companies value efficiency and productivity in work, and employees work independently without much of an office hierarchy.
Similarly, Singapore maintains an efficient business environment, with many of the workforce being skilled workers in specialised clerical fields. Companies expect employees to work without constant guidance, and value efficiency as well as collaboration among employees.
Workforce
Both Singapore and the Netherlands have relatively young workforces, with more than half of the workforce in each country being 35 years of age or younger. Due to the business environment in both countries, most employees work in white-collar jobs.
Business Language
English is the official business language in Singapore. However, large portions of the population are literate in Mandarin, Malay, and Tamil. The Netherlands mostly conducts business in its official language, Dutch, but most people also speak and understand English, French, and German.
Incorporation Process
The incorporation of businesses in Singapore can be confusing without proper assistance. At WealthBridge, we take measures to ensure your business registration is done swiftly and properly, with the best chances of approval!
The incorporation process in the Netherlands is relatively straightforward, provided that the foreign company has all required documents on hand. Once submitted, the Dutch Trade Registry will approve or reject the application, and approved corporations will be announced through the Netherlands Official Gazette (Staatscourant).
Filing Requirements
Because of efficient government systems, both Singapore and the Netherlands have orderly and systematic filing systems. Singapore has the BizFile+ business portal, and incorporation can be completed in around 1-3 days.
In the Netherlands, entrepreneurs looking to incorporate in the country must make an appointment with the Netherlands Chamber of Commerce (KVK), who will then approve or reject the application within 3-5 business days.
Immigration Requirements
Singapore is home to thousands of migrant employees who work in the country with an employment visa, or an EntrePass. As Singapore is a global business hub for Southeast Asia, the country provides several types of work permits for foreign nationals.
Migrating to the Netherlands as a non-EU citizen can be difficult. Foreigners must provide numerous documents to prove their motives in the country, as well as apply for a temporary immigrant visa for the first five years of staying in the country before they can apply for permanent residence.
Taxes
Singapore’s low corporate tax rate of 17% is one of the major incentives for foreign businesses to enter the country. Netherlands, however, has a corporate tax rate of 25.8% - a stark increase from the tax haven in Singapore.
IP Protection
Copyrighted works published in the United States of America and in the European Union are automatically protected under the Netherlands law. However, IP protection only applies to works that have been registered and enforced under the country’s local laws.
Meanwhile, the Singaporean government continues to work on the Intellectual Property (IP) Hub Master Plan, a 10-year pledge to improve the IP protection of works in the country. The plan is set to come into force by 2023 or 2024.
Bureaucracy
Singapore has a highly-efficient bureaucracy for companies and businesses, with most business applications and procedures approved within a few days. ACRA manages most of the corporate procedures, and therefore has a focus on maintaining swift processes.
The Netherlands is considered a highly bureaucratic country in terms of setting up businesses, and the country. However, the level of red tape in the processes and procedures in the country is relatively high, especially for foreign companies looking to incorporate into the Netherlands.
Openness to Trade
As the business hub of Southeast Asia, Singapore is known for being exceptionally open to trade, particularly with neighbouring countries as the nation has free trade agreements with Southeast Asian countries.
The Netherlands is equally open to trade, but mostly within the European Union as the country has free trade agreements with its surrounding nations. While Singapore is ideal for trade in Asia, the Netherlands is a good gateway for trade in the EU.
Global Competitiveness
The Netherlands ranks fairly high on the Global Competitiveness Index organised by the World Economic Forum. Netherlands has a ranking of 4, with an overall score of 82.4, making it one of the most internationally competitive countries in the world.
However, Singapore continues to hold its 1st place in global rankings as having the most competitive economy in the world. This is greatly due to the fact that the country is a known international business hub where companies from all over the world gather to trade and conduct business operations in the country.
Location
Location is a major component in deciding to do business in Singapore or the Netherlands. Singapore is a favourite location for foreign investors for the country’s ease of setting up foreign businesses in Asia, particularly as the country already has numerous multinational companies in operation.
The Netherlands, on the other hand, can serve as a gateway to Europe, and, being a founding member of the European Union, is an excellent location to trade within European countries without tariffs.
Why Do Business in Singapore?
Even when compared to a country with a well developed economy like the Netherlands, foreign investors and business owners will find that operating businesses in Singapore has more advantages, conveniences, and privileges.
Singapore's laws and incentives entice foreigners to visit the country for commercial opportunities by removing language barriers and administrative costs. This makes the country exceptionally attractive to foreign investors. Contact WealthBridge today to get started on incorporating your business!