Business cultures in Singapore and Switzerland are said to be similar, with many of the workforce maintaining a strict and pragmatic approach in doing business. However, the two countries focus on different perspectives when it comes to incorporating businesses, particularly those in the financial sector.
In this article, we’ll look at the similarities and differences between the two nations, and see whether doing business in Singapore is simpler than doing business in Switzerland. We’ll look through the pros and cons of each country to determine the ease of business of each economy.
The World Bank Doing Business Report in Switzerland vs Singapore
In the annual report of the World Bank on the Ease of Doing Business, the organisation ranks several economies based on a DB score, short for Doing Business score. The higher the DB score, the easier it is to set up, and conduct business in the country. Singapore scored an 86.2, while Switzerland scored a 76.6.
Besides DB scores, the World Bank also breaks down the ease of doing business in a country according to several categories, including Paying Taxes, and Trading Across Borders. The ranks span across multiple countries where 1 is the highest rank a nation can achieve, meaning that the country tops the other nations in that category.
Doing Business: Switzerland vs Singapore
Singapore is known for its diversity and openness to foreign businesses. In fact, the World Bank ranked Singapore 2nd overall in terms of Ease of Doing Business, where the organisation compares various economies in their processes of incorporation, and business environments. It was found that Singapore's Accounting and Corporate Regulatory Authority (ACRA) made it simple for business owners to establish businesses in the country.
Switzerland is known for its strict adherence to proper business practices, as well as being one of the most competitive countries in the world. Their robust economy is expected to grow by 2.5% in 2022, but may slow down to 1.3% the following year due to external factors.
Singapore is home to over 37,000 foreign companies registered in the country. Their business environment makes them open and accessible to foreign entrepreneurs looking to enter the market. With easy processes of incorporation, low tax rates, tax incentives and other benefits, Singapore is an attractive market for both local and foreign companies to set up in.
Switzerland has a recognized outstanding business environment as their framework results in productive and efficient business processes. From a well-educated workforce to an efficient government system, Switzerland prioritises competence and productivity above all else.
Both Singapore and Switzerland are known for their highly-skilled workforce, with the majority of the labour force in both countries working in specialised jobs, and doing white-collar work. Literacy rate in Singapore is around 97.6%, while 90% of Swiss workers have undergone at least secondary education.
Singaporeans mainly conduct business in English, but most of the population are bilingual, speaking Mandarin Chinese, Tamil, and Malay. In Switzerland, major languages are influenced by the surrounding countries, and the Swiss mainly speak German and French, but their main financial centre has made English their official business language.
In Singapore, incorporation of companies is overseen by ACRA, and foreign entrepreneurs looking to register their businesses can find all the necessary incorporation documents in BizFile+. Corporate services firms like WealthBridge may ease the process of incorporation with assistance to register foreign businesses in Singapore.
In Switzerland, on the other hand, the cantons are responsible for overseeing the registration process of their respective states. Because incorporation is handled at a cantonal level, interested parties will need to brush up on the regulations and processes in each state they are looking to incorporate in.
Filing of incorporation requirements in Singapore is now fully-digital, with companies registering through BizFile+. From there, ACRA will review each registrant, and approve or deny applications. All requirements for each business type are available in BizFile+.
The registration process to incorporate a company in Switzerland may take as much as 10 days, where the interested parties must meet with separate relevant authorities and departments. Requirements for incorporation include a minimum starting capital of CHF 100,000, half of which should be paid by the day of incorporation.
Singapore welcomes foreign businesspeople and specialists as they grant multiple types of work visas, such as the EntrePass for entrepreneurs, and the Overseas Networks & Expertise Pass for field experts. In Switzerland, foreigners may apply for work visas through the Swiss consulate or embassy in their country.
Singapore has a flat tax rate of 17%, with tax returns and incentives to encourage businesses to set up in their economy. While this is one of the most competitive tax rates in Asia, Switzerland’s tax rate is even more competitive at between 11.9% and 21.6%, depending on the nature of the business. In fact, Switzerland is known as a Grandfather of Tax Havens for their low tax rates.
The Singaporean government has been working on their Intellectual Property (IP) Hub Master Plan since 2003, and is expected to be in full effect by 2023 or 2024. This project aims to protect IPs, giving creators more credit for their works. Switzerland encourages creators to register their works as patents for effective IP protection rights, which the country efficiently enforces.
Both Singapore and Switzerland have highly-efficient, and well-functioning bureaucratic systems, with many of their processes done swiftly and methodically. The two nations, despite their physical distance from each other, adopt systematic and structured processes for the majority of their policies.
Openness to Trade
Singapore highly encourages the incorporation of foreign companies, and is highly open to trade. With an open economy attracting multiple international investors each year, the country does not limit foreign ownership on any industry that does not pose a threat to national security.
Similarly, Switzerland is active in global trade, and is one of the most active countries in terms of globalisation. While there are some barriers to entry to the country, Switzerland is currently the 16th largest global trading partner with USD 62.5 billion traded goods in 2019.
Switzerland is 5th in global competitiveness rankings based on the The Global Competitiveness Index report by World Economic Forum, while Singapore tops the list as the most globally competitive country in the world. This is despite the fact that Switzerland is known for its globalised economy, and its openness to foreign trade and investment.
Singapore and Switzerland are located on completely different continents, where Singapore is part of the Southeast Asian region, and Switzerland in the European region. Due to this, there are cultural differences between the two countries.
Each country will have its own perks in location, where Singapore serves as a gateway to Asia, while Switzerland can be a port into doing business in Europe. Target market demographics, market trends, and buying power are different as well, which is something that must be considered before incorporating in either country.
Why Do Business in Singapore?
At WealthBridge, we make incorporation simple for any investor looking to set up a business in Singapore. Don’t pass up the opportunity to develop your own business in this growing economy, and make business registration easy and quick with our corporate services!
Check out our blog on why you should incorporate your business in Singapore here.