Although Singapore may be regarded as Southeast Asia's busiest and most prosperous commercial centre, its neighbours are quickly developing their own commercial hubs in order to compete with the world's leading financial hubs. Thailand is one of these countries with a rising business profile.
In this article, we compare the ease of doing business in Singapore with Thailand, and whether doing business in one country is more lucrative than in the other. We’ll look at factors such as Immigration Requirements and Economic Overview to get a better understanding of the business environment of each country.
The World Bank Doing Business Report in Thailand vs Singapore
The World Bank conducts an annual report on the Ease of Doing Business in almost 200 countries, including Singapore and Thailand. The goal is to measure the simplicity and organisation of each economy respective to how the country manages foreign investments and incorporation.
The study ranks countries depending on a DB score. Singapore currently scores an 86.2, while Thailand holds a score of 80.1. Countries are also ranked on several factors such as Starting a Business, and Getting Credit, where the highest rank a country can achieve is 1.
Doing Business: Singapore vs Thailand 2020
World Bank
Doing Business: Thailand vs Singapore
Economic Overview
Singapore ranks 2nd overall in the Ease of Doing Business study conducted by the World Bank. The country is a high-economy nation, and is ranked as the world’s most competitive economy, boasting a gross national income of US$54,530 per capita in 2017. Singapore has an average annual GDP of 7.7%, which is much higher than its neighbouring countries.
In less than a generation, Thailand went from being a low-income to an upper middle-income country, demonstrating impressive social and economic development. In the years after the Asian Financial Crisis, Thailand's GDP grew at an average annual rate of 5%. Thailand ranks 21st overall in the Ease of Doing Business.
Business Environment
As one of the most business-friendly countries in the world, Singapore is a well-known international business hub that welcomes foreign investors into doing business in the country. The Singapore Accounting and Corporate Regulatory Authority (ACRA) grants incentives to foreign entrepreneurs entering the market, such as tax exemptions and government grants.
Thailand’s business environment focuses on growth and business expansion, with most of the country’s economic growth coming from export-led approaches. However, due to a slowdown in productivity, it appears that the export-led model's development possibilities, which not long ago drove much of Thailand's economic growth, have greatly weakened.
Workforce
With a fast-paced business environment, global opportunities, and incentives to do business in the country, Singapore attracts around 5 migrants per thousands in population per year, most of which enter the country for business, work, and employment. The country has a young workforce under 35 years of age, where most employees work in skilled and white-collar jobs.
In Thailand, 55% of the population make up the workforce, and the country has the 4th largest workforce in Southeast Asia. Most of the workforce are employed in blue-collar jobs, with around 10 million working in blue-collar jobs, and 2 million working in white-collar jobs.
Business Language
Singapore’s official business language is English, which is often used in official documents, business transactions, and other formal business communications. However, much of the population also speaks Chinese, Malay, and Tamil.
Thailand, on the other hand, has Thai as their official language, but English is also widely-accepted, particularly in business communications. Most corporate environments in Bangkok use English as the official business language.
Incorporation Process
The ACRA in Singapore oversees the incorporation process for all businesses, and entrepreneurs can log into BizFile+ for a full, step-by-step process of incorporation, or avail corporate services from WealthBridge for streamlined incorporation.
In Thailand, incorporation can take between 1-2 business days, which is fairly swift compared to the 3-5 business days average in Singapore. However, Thailand requires companies to have at least three (3) shareholders to incorporate, and at least one (1) shareholder is a Thai citizen.
Filing Requirements
While ACRA makes it simple for entrepreneurs to submit requirements via BizFile+, most foreign entrepreneurs avail corporate services to make the process easier, and to ensure the documents submitted are compliant with the requirements of Singapore. WealthBridge is a corporate services firm that has had extensive experience in incorporation, and can help your business set up in Singapore!
In Thailand, the Department of Business Development (DBD) and the Ministry of Commerce (MOC) oversee the incorporation process. While incorporation takes 1-2 days to complete, the requirements for setting up a business can be complicated for foreigners. Thailand also requires businesses to have at least 2 million THB in capital, as opposed to the SGD 1 in Singapore.
Immigration Requirements
The Singapore Ministry of Manpower (MoM) offers an Employment Pass, EntrePass, or Overseas Networks & Expertise Pass for foreigners looking to do business in the country. Foreign entrepreneurs entering Thailand, on the other hand, will need work permits or non-immigrant visas to do business in the country.
Taxes
One of the reasons for foreign companies to enter the Singapore market is that the country is a recognised tax haven. With a 17% flat rate on corporate taxes, Singapore has a relatively low tax rate compared to other countries.
In Thailand, the corporate income tax (CIT) rate is 20%, which is within the average tax rate in Southeast Asia, but is still higher than the tax rate in Singapore. The Thai tax rate, however, varies depending on the company’s income bracket and type of taxpayer.
IP Protection
Singapore’s Intellectual Property (IP) Hub Master Plan is planned to be set in motion by 2030, which will protect IP rights for all works. Thailand automatically protects intellectual property without any registration requirements as soon as the works are published. However, registering with the DIP's Copyright Office is highly recommended for proof of ownership of the work.
Bureaucracy
Singapore has one of the most efficient bureaucracies in the world, with minimal red tape, and most departments handling processes within 1-3 business days. All business procedures can be done online, and requirements are all listed within the official ACRA sites.
Bureaucracy in Thailand, despite its quick responses, is known for using outdated systems, which can complicate business operations. Despite extensive reforms to modernise their bureaucracy, Thailand is still on the road to updating their technologies.
Openness to Trade
Both Singapore and Thailand are known to be highly welcoming to international trade, where Thailand has contributed most of its economic growth to import and export goods trading. Singapore, however, is the preferred destination for foreign companies to do business simply for the ease of incorporation, as well as incentives for foreign companies.
Global Competitiveness
Both Singapore and Thailand are considered highly competitive countries. Singapore has been named the Most Globally Competitive Country in the World, scoring a solid 85 in the Global Competitiveness Report of the World Economic Forum. Meanwhile Thailand scored 68.11, taking the 55th spot in the same report.
Location
Both Singapore and Thailand are located within Southeast Asia, and are both known for their openness to trade with foreign companies. However, Singapore has a geographical advantage, being centrally located within the regional trading network.
Why Do Business in Singapore?
Doing business in Singapore brings a lot of perks to foreign companies. When it comes to setting up your business in the country, contact WealthBridge for swift, straightforward incorporation and company set up!
Find out how you can easily do business in Singapore through our site!