Company Registration: Singapore vs Vietnam

Company Registration: Singapore vs Vietnam

The company’s registration in Asia attracts many foreign investors. The Asian market is one of the largest and most dynamic in the world. According to the forecasts of leading international agencies, the economies of South-East Asia will continue to develop and play an increasingly important role in the global arena in terms of consumer saturation.

Singapore and Vietnam are amidst the most prestigious and sought after places in Southeast Asia for business start-up and development. Singapore is renowned as a leading commercial center in the region. In recent years, however, neighboring countries like Vietnam have been actively developing their business environments to compete with Singapore. They offer various advantages, such as lower business costs, access to growing markets, and innovative approaches to development.

In the case of Vietnam, the country is developing as a new business center in the region. The Government was actively promoting investment privileges, expanding its infrastructure and offering low labor costs. Competition stimulated the growth and development of the region as a whole, and Singapore continued to strengthen its position and attract business.

This publication examines the differences between doing business in Singapore and Vietnam.

Company Registration in Singapore against Vietnam: Global Ratings

Where better to open a company: in Singapore or Vietnam?

Vietnam has been showing stable economic growth in recent years. The authorities were taking steps to attract investment and create a favorable investment climate. However, that South Asian country has a long way to go to catch up with Singapore.

What to look for when choosing a country to register a company?

When opening a company in an Asian country, it is important to take into account the characteristics of each market. It is necessary to study the business environment, legal system, tax conditions, competition and other factors that can affect the successful operation of the company. Below we will look at the benefits of having a company registered in Singapore against Vietnam.

Economic Review

Singapore’s business environment is highly competitive. The state actively supports entrepreneurship and innovation, offers low tax rates and a variety of incentives for startups. Singapore is the leading transnational financial center and has a high level of economic stability.

Vietnam, on the other hand, offers lower business costs and has an impressive market with a rapidly growing number of customers. The country was actively pursuing economic reforms and attracting foreign investment. Vietnam has a number of free trade treaties, which facilitate international transactions.

According to the latest Global Competitiveness Index, Singapore ranked 1st in the world in 2023, showing a top level of economic and business development in the country. Vietnam ranked 67th in this Index. Despite this, Vietnam is a very dynamic economy with growing business opportunities.

Location

In terms of location, both Singapore and Vietnam occupy «winning» positions. Singapore serves as an important trade and economic center. It is also called the «gateway» to Southeast Asia. Its geographical location provides easy access to international markets and makes it attractive for business and tourism. Vietnam is strategically located in the South China Sea, which provides access to important maritime trade routes.

Company registration

Vietnam and Singapore offer foreign investors full control over their business (except for strategically important sectors). The minimum requirements for business registration in Singapore and Vietnam are presented below.

It is noteworthy that the company enrollment process in Singapore is entirely digitized via BizFile. On average, when utilizing a registration agent to submit the application and documents to ACRA, the registration process in this country takes several working days. Conversely, to register a company in Vietnam, one must navigate through a lengthy process comprising multi-level stages. The general duration of the process typically extends up to 4 months on average.

Taxation

Singapore boasts the most competitive corporate tax rates in Asian region, featuring a flat tax rate of 17%, and offers various tax incentives. In contrast, corporate tax in Vietnam is levied at a rate of 20%, with rates for the oil and gas industry ranging from 32% to 50%. Regarding other taxes, Singaporean companies may incur a Goods and Services Tax (GST) at a rate of 7%, whereas Vietnam applies a 10% Value Added Tax (VAT).

Protection of intellectual property rights

Singapore has strict laws that protect diverse forms of copyrighted material, including patents, copyrights, trademarks and designs. Intellectual Property Office Singapore (IPOS) is liable for the administration and safety of IP assets in Singapore. There are diverse financial support programs that help companies and innovators develop and commercialize their intellectual achievements. This includes subsidies for patents and technological advancements.

Singapore actively participates in international treaties such as the Paris Convention on the Protection of Industrial Property and the World Intellectual Property Organization (WIPO). The Government provides educational and information resources to promote awareness and understanding of the importance of IP safety among the business community.

Vietnam ensures the protection of intellectual property rights in adherence to ratified international treaties, including the Treaty on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The country employs rigorous measures to safeguard copyright, trademarks, patents, industrial designs, and other forms of intellectual property. Violations of these rights may result in the imposition of penalties.

Openness to trade

This is an important aspect for the development of the economy and investment inflows. Singapore and Vietnam are two countries that have adopted different approaches to regulating trade.

Singapore has long maintained a policy of integrity to trade and investment. It had one of the most open economies in the world and was an active participant in bilateral and multilateral free commercial agreements, as well as a member of various trading blocs, such as the Association of South-east Asian Nations (ASEAN).

On the other hand, Vietnam is at an early stage of integration into the international economy. In recent years, its Government had been increasingly open to trade and had made efforts to improve its investment environment. The country is actively entering into regional and international trade agreements such as the Regional Comprehensive Economic Partnership (RCEP). However, Vietnam still applies restrictions to foreign companies, including complicated business procedures and restrictions on land ownership.

Access to highly qualified personnel

Singapore and Vietnam are countries with different economic and social conditions, so there are differences in access to highly skilled personnel between the two countries. Singapore has long been one of Asia’s leaders in development and innovation. It has a well-developed education system and a high standard of living, which makes it an attractive destination for the immigration of highly skilled professionals. Company registration in Singapore provides opportunities to hire educated professionals in various fields. There are good career opportunities and many investments in science, technology and innovation. In the latest Global Competitiveness Index, Singapore ranked 56th in terms of labor market performance.

Vietnam was striving to develop and attract highly qualified personnel, but was at different stages of development. Education and access to modern technology in Vietnam are significantly lower than in Singapore. However, with the growth of the economy and the inflow of foreign direct investment, the Vietnamese labor force has acquired new skills and competencies, making them attractive in the labor market.

Grants for start-ups

If you have plans to start a business or launch an investment project in Singapore, it will be useful to know that various grant programs are available to support entrepreneurs and innovative startups. One such program is Grant for Start-ups, where grants cover up to 70% of start-up costs in 10 selected fields such as artificial intelligence, robotics, biomedicine, and others.

Another SPRING SEEDS program is an initiative presented by an improved structure to fund startups in Singapore. It was developed by the Economic Development Council (EDB) in consultation with the National Research Foundation (NRF) and the Infocomm Media Development Authority (IMDA). SPRING SEEDS provides funding of up to S$1 million for the development and commercialization of technology projects at an early stage of development. This program was originally designed for start-ups in science, technology and innovation. SPRING SEEDS offers a «portfolio approach» to financing, which means that it selects several startups in one portfolio and provides financial support for all projects simultaneously. This can spread risks and increase the likelihood of success of one project.

Financial support for startups in Vietnam plays an important role in stimulating innovation and economic development. The SpeedUP Foundation, worth $482,000, provides start-ups with the opportunity to obtain the necessary resources to implement their ideas and projects. This can inspire entrepreneurs and promote new innovative solutions and technologies.

Immigration

Business immigration serves as a crucial consideration for numerous entrepreneurs and investors seeking fresh opportunities abroad. Exploring the advantages and disparities in the business immigration policies of Singapore and Vietnam is essential.

Singapore boasts one of the most inclusive business immigration policies globally. The Global Investor Program (GIP) is a key facet of Singapore's approach, offering affluent investors and entrepreneurs the chance to secure permanent residency by investing in the economy or launching a business in the country. GIP provides two avenues to attain a residence permit in Singapore.

The first pathway involves investing in an existing business. To qualify for residence recognition in Singapore, one must invest in designated priority areas that actively contribute to economic development and job creation. The minimum investment amount for this option is set at 2.5 million Singapore dollars.

The second option entails establishing a new enterprise. Requirements for this scheme include investing in priority industries and undergoing an evaluation of business performance.

Conclusion

Singapore and Vietnam both seek to attract wealthy foreign investors and to develop their foreign trade. Singapore already had a highly developed economy, thanks to its strategic position and proactive industrial policy. It is one of the world’s key hubs of finance, trade and shipping.

On the other hand, Vietnam is developing slowly but becoming an attractive location for international companies. Due to its low labor costs and active export policy, Vietnam attracts significant amounts of investment from abroad. However, it will take time and extra effort for Vietnam to reach Singapore’s level of development.

You can ask YB Case specialists for support in choosing the jurisdiction to register the company.