Singapore Wins over Austria as a Better Place to Conduct Business

The decision to start up a venture is a difficult one but deciding which place shall be more favorable and supportive towards business is a tougher one. It involves analysis and comparison of various socio-economic factors and proves to be a cumbersome task for entrepreneurs to collect accurate data and base their decision on it. If anyone is keen to incorporate company in Singapore he or she should compare the country with others to know exactly how it is better than them.

To make things simpler, we have introduced a series of comparative analysis between various worldwide jurisdictions and Singapore, a country known for its good business practices and positive environment.

This article shall enable entrepreneurs to decide whether to incorporate company in Singapore or Austria.

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Singapore

Austria

General Ranking

Singapore has been ranked as #1 for Ease of Doing Business as per World Bank's, "Ease of Doing Business Report."

Austria is ranked as #21 as per this report.

Singapore is 2nd most competitive economy in the world as per World Economic Forum, "Global Competitiveness Report." This report also ranks it as the #1 country most open to trade.

Austria is far behind at 26th position and 18th position in terms of being a competitive economy and that open to trade respectively.

Singapore is considered to be the 2nd most favorable country to work in as per IMD, World Competitiveness Yearbook.

Austria is 15 notches behind at 16th position making it a not so preferred country to work in.

Gallup, Potential Net Migration Index ranks Singapore as the "Most Desirable Immigration Destination." This substantiates how agreeable it is considered by expats to live in.

Austria is placed at 20th position as per this survey.

Business Environment

The latest "Doing Business Report" issued by World Bank ranks Singapore as the easiest place to do business in for the 5th consecutive year. This certifies that Singapore has all elements correctly in place that is required to set up a business including faster incorporation, lower taxation, zero corruption, investor property protection, and free trading across borders. It also easy to incorporate company in Singapore.

Austria, unlike Singapore does not offer a very encouraging environment for doing business. This is evident from World Bank’s "Doing Business Report" ranking it at 21st position. The governance system and higher regulations make it difficult for business to thrive in the country. It ranks lower than Singapore on surveys conducted for ease of incorporation, rate of taxation, corruption levels, investor property protection and trading across borders.

Taxation

PWC, IFC, World Bank’s ‘2011 Paying Taxes Report’ has ranked Singapore as the 4th easiest country to pay taxes. The low rate of personal taxes is also evident from the fact that most of the residents pay their taxes duly without escaping it. This is also demonstrated through its #11 rank in Forbes’ ‘2009 Tax Misery & Reform Index." The country has one of the lowest effective tax rates in the world making it a value proposition for offshore investors.

Austria‘s taxation is way heavier than that imposed by Singapore and thus results in discouraging offshore investments. The corporate tax levied in Austria is 25% while that of Singapore is flat 8.5% till income of $3, 00,000 and flat 17% on income above it. Austria charges GST @ 20% while Singapore maintains the rate @7%. While Singapore charges no tax on capital gains and dividends, Austria charges 25% taxation on both. Due to its heavy taxation, it has been ranked #60 in Forbes’ ‘2009 Tax Misery & Reform Index’ and #104 in PWC, IFC, World Bank’s ‘2011 Paying Taxes Report.’

Global Competitiveness

Singapore is the second most competitive and freest economy in the world. Factors like openness to trade, intellectual property rights, a huge talent pool, low corporate and personal taxation which is also easy to pay; low corruption and free labor laws are key contributors to it.

Austria is nowhere near Singapore in terms of being a free or competitive economy globally. Issues such as high corruption levels, inefficient government, high taxation which is difficult to pay, restrictive labor laws, deficiency of skilled labor and political instability are major deterrents for the country.

Openness to Trade

World Economic Forum’s ‘2014 Global Enabling Trade Report’, a report conducted across 138 countries in the world ranks Singapore as the most open country to trade ever since 2009.This is due to its efficient transport system, lower tariffs, ease of cross border trading and competence in logistics.

Austria is much behind at #18 rank due to factors such as complex tariff structure with much higher tariffs imposed, expensive import and export mechanism and inefficient transport and port infrastructure.

Labor Availability

Singapore has favorable labor laws and is one of the least risky country globally in terms of employment. This helps in attracting skilled labor force from all over the world and also helps in retaining them. It has been at ace position for 30 consecutive years as per BERI’s ‘Labor Force Evaluation Measure.’

Austria is at #57 position as per BERI’s ‘Labor Force Evaluation Measure.’ Its low quality education makes availability of skilled taskforce within the country a grave challenge. Foreign labor also displays reluctance in migrating to Austria due to its poor ranking in labor laws by many indices and reports.

Quality of Life

Singapore offers a positive environment to live in with a good quality of life for its residents as well for those who migrate to the country. Gallup’s ‘2010 Potential Net Migration Index ‘has ranked Singapore as the most desirable immigration destination.

Austria has been ranked as the 20th most desirable immigration destination as per Gallup’s ‘2010 Potential Net Migration Index. ‘

The above comparison is a testimonial to the fact that Singapore is by far an easier place to do business in as compared to Austria. Entrepreneurs looking to incorporate company in Singapore should go ahead and start their business as soon as possible.

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