Singapore and New Zealand are the top two competitors in the ease of doing business, but is there a major difference in setting up, operating, and conducting business between the two? In this article, we take a look at the two most business-friendly economies in the world to determine the ideal location for new businesses.
The World Bank Doing Business Report in New Zealand vs Singapore
Each year, the World Bank publishes assessments assessing the ease of doing business in 190 economies. A country's rank is determined by its DB score; the greater the DB score, the higher the rank. At this time, New Zealand tops the charts with an 86.8 DB score, while Singapore is not far behind, having a DB score of 86.2.
The World Bank also ranks countries on specific factors that contribute to the ease of doing business in the country. Countries are ranked per category, where 1 is the highest score a country can achieve. New Zealand currently has the highest score in Starting a Business, while Singapore tops in Enforcing Contracts.
Doing Business: Singapore vs New Zealand 2020
World Bank
Doing Business: New Zealand vs Singapore
Economic Overview
Singapore and New Zealand are ranked head to head in the Ease of Doing Business by the World Bank. New Zealand currently takes the top spot as the country with the most business-friendly environment, with Singapore not too far behind, ranking second overall.
Both countries are ideal locations for setting up businesses: Singapore being a gateway for companies to enter the Asian market, and New Zealand being a prime location for starting a business in Oceania.
Business Environment
The Singapore business environment is enticing for many foreign investors as the country puts priority on their ease of doing business, particularly with their welcoming of foreign companies to do business within the country. With tax benefits and other incentives for foreign companies, ACRA opens the Singaporean business environment to international entrepreneurs.
New Zealand operates an open economy, as its geographical location makes it distant from trade and export markets. The country has the least amount of requirements and procedures needed to set up a business, and approves applications in a relatively short period of time. These factors contribute to the country’s top spot in the ease of doing business.
While Singapore operates mainly white-collar jobs and clerical companies, New Zealand has a sizable manufacturing sector, as well as a comparatively large agricultural sector that trades high-quality produce and animal products.
Workforce
The fast-paced climate of Singapore draws thousands of international entrepreneurs each year, with 4.72 migrants per 1,000 people moving there in search of business opportunities—the majority of whom are under 35 years old. Given that two-thirds of the population works in white-collar employment, Singapore is the perfect location for recruiting young workers.
New Zealand has one of the highest labour force participation rates in the world with 70.8% of its working-age citizens having jobs in the country. While this percentage went down from 71.2% since 2021, it is still well above the average in Oceania, which is approximately 66%. Most of the population works in the agriculture sector - one of the leading industries in the country.
Business Language
Singapore is considered to have a melting pot of cultures, and while the country mainly considers English as its official business language, much of the population can also speak Mandarin, Tamil, and Malay among other languages.
In New Zealand, the predominant language and the official business language of the country remains to be English. The vast majority of residents speak English on a daily basis, but may also speak Māori, Samoan, Mandarin, and more.
Incorporation Process
Like Singapore, which includes all the documents and requirements of incorporation in the government-organised business portal, BizFile+, New Zealand has also modernised its incorporation process with RealMe. In these portals, entrepreneurs interested in setting up businesses in the countries may view the requirements to incorporate a business.
Filing Requirements
In Singapore, the Accounting and Corporate Regulatory Authority (ACRA) handles all the requirements and applications necessary for incorporation. Setting up a business may take as little as 15 minutes to complete, but if the documents must go through a separate department, the process may take up to 3 months.
The Ministry of Business, Innovation and Employment (MBIE) regulates corporations and companies operating in New Zealand, including incorporation. This is the authority that processes submitted applications, which may take up to 20 business days.
Immigration Requirements
Singapore provides visas to entrepreneurs depending on the nature of their business. The Ministry of Manpower oversees the visa applications, and foreign investors may apply for an Employment Pass, EntrePass, or Overseas Networks & Expertise Pass.
In New Zealand, visas are overseen by the Immigration of New Zealand, where entrepreneurs can apply for various types of work permits, such as a Skilled Migrant Category work visa, Seasonal Employment visa, Entertainer work permit, and more.
Taxes
Singapore, a recognised tax haven, maintains a flat tax rate of 17% for all businesses, subject to tax incentives and other perks. New Zealand, however, has a corporate tax rate of 28%, which is higher than the average tax rate in Oceania at 23.75%.
IP Protection
Both Singapore and New Zealand prioritise the protection of intellectual property rights, where Singapore has the Intellectual Property (IP) Hub Master Plan, and New Zealand with the Intellectual Property Office of New Zealand (IPONZ) overseeing IP protection.
Bureaucracy
Singapore is highly efficient in its business processes. ACRA oversees the bureaucracy around companies and corporations, and therefore maintains a level of efficiency in regulating companies doing business in the country. Processes and procedures are generally swift to complete, and ACRA provides numerous incentives for international companies.
New Zealand, named by The World Bank as the best country to start a company, also boasts a highly-efficient bureaucracy when it comes to regulating companies and business processes, with several monetary and fiscal incentives for companies.
Openness to Trade
Both Singapore and New Zealand have high openness to trade, but the latter’s isolated location can make international trade difficult, particularly for the importation and exportation of goods. Australia is the main trading partner of New Zealand, and has trade agreements with the country. Singapore, on the other hand, is surrounded by various countries, with trade agreements for tariff-free trading within Southeast Asia.
Global Competitiveness
While New Zealand tops the list in the Ease of Doing Business, Singapore is known for its global competitiveness, which is key in growing businesses internationally. Singapore is number 1 in The Global Competitiveness Index released by the World Economic Forum, while New Zealand ranks 19th.
Location
Singapore is within the centre of Southeast Asia, and has trade agreements with various nations in SEA. The geographical location of the country makes it ideal for foreign companies to enter Asia, and conduct business with surrounding countries.
New Zealand may have the ease of doing business, but their geographical location is comparatively isolated, making it difficult for companies to trade internationally.
Why Do Business in Singapore?
Foreign investors and business owners will find that operating in Singapore has more advantages and privileges, even when compared to a country with a well developed economy like New Zealand.
Singapore's rules and regulations act as incentives that encourage foreigners to visit the country for business opportunities because there are few language barriers and administrative costs. Singapore is a prime location for entering the Asian region, and is overall friendly to foreigners doing business in the country.
Contact WealthBridge for corporate services in Singapore. We'll help you incorporate your business in Singapore and manage it so you can concentrate on expanding it!