Singapore, a Better Place for offshore Companies than UK

United Kingdom is a global city and an important finance centre with the fourth largest population of Europe. It holds much economic significance and is the fifth largest economy in the world when ascertained by nominal GDP and 10th largest by Purchasing Power Parity. Singapore company setup is a very good proposition for budding entrepreneurs.

More and more entrepreneurs are interested in Singapore company setup, because of startup opportunities.

It is a powerful high income economy and the first industrialized country in the world. High on the Human Development Index, the country has attained vast international significance on all fronts including economic, military, cultural and political. The service sector of UK predominantly contributes to major portion of its GDP (73%) and tourism plays a vital role in the economy’s growth.

Singapore is a global hub for finance, commerce and transportation and alternatively known as the "Lion City" for its powerful economy that boosts foreign investments. Similar to UK, Singapore also ranks high on the Human Development Index; the highest in Asia and ranked 9th globally. It is also superior in terms of education quality, healthcare, life expectancy, personal safety and quality of life.

Having one of the highest per capita incomes in the world; the city offers excellent opportunities for foreign investments through its efficient regulations, good tax structure, robust infrastructure and high access to finance. Singapore company setup is also a good option.

In this article, we shall compare both the cities and see why UK attracts less foreign investments as compared to Singapore.

Parameters

Singapore

United Kingdom

Key Indicators

Singapore is the easiest place to do business as per World Bank's Doing Business Report for 9 consecutive years.

United Kingdom is ranked 8th as per the 2015 survey.

Singapore is the second freest economy in the World as per Heritage Foundation’s Index of Economic Freedom.

UK is 12 spots behind at 13th position.

Singapore is the third most competitive economy in the world as per 2015 IMD, World Competitiveness Yearbook.

UK is far behind and is the 19th most competitive economy in the world.

The Intellectual Property Protection in Singapore is considerably high which is proven by it being ranked 3rd on this parameter by World Economic Forum, Global Competitiveness Report.

UK offers low security to its entrepreneurs for intellectual property which can be seen by it being ranked 17th as per the report.

The tax structure of Singapore is much lower and favorable for business community. It is ranked #11 for being a Country with Lowest Tax Misery as per Forbes Tax Misery and Reform Index.

UK levies a higher tax rate on companies which is evident from it scoring #37 on the index.

Global Competitiveness

The Global Competitiveness Report 2014-2015 ranked the countries on 12 parameters to calculate its overall global competitiveness. Singapore scored well on factors such as financial market sophistication, goods and labor market efficiency, low corruption levels, efficient government and sizeable institutions. Singapore’s open economy and positive environment contributed to its being ranked as the 7th most innovative economy in the world by INSEAD’s ‘2010 Global Innovation Index‘ ; an element essential for business growth.

On the parameters featured in The Global Competitiveness Report 2014-2015, UK scored poorly fur to high tax rates, low trust on politicians, high regulatory burden, inefficient custom procedures and complex and time taking incorporation mechanism. UK featured as the 14th most innovative economy in the world losing by 7 positions to Singapore.

Tax Structure

Singapore is known to have one of the lowest effective corporate taxes in the world. It follows a simple single tier tax system since 2012 making it a tax haven for investors. KPMG has ascertained Singapore to have the third lowest tax rate in Asia. Its favorable tax regime is supported by international surveys such as Forbes ‘2009 Tax Misery and Reform Index‘ which has put it on 11th position reflecting the low tax burden it imposes on its tax payers.

UK’s tax regime is not as favorable as that of Singapore as it imposes a much heavier tax burden on its tax payers leading to a high percentage of tax evasion. This is evident from it being ranked #37 by Forbes ‘2009 Tax Misery and Reform Index.‘

Openness to Trade

Singapore fosters free trade over borders enabling companies to go global with utmost ease. All elements essential for openness to trade are prevalent in Singapore : top notch border administration, excellent port and transport infrastructure, good business environment and efficient market access.

United Kingdom is also close behind on this aspect and is ranked 6th for ‘openness to trade’ by World Economic Forum’s ‘Global Enabling Trade Report 2014‘ while Singapore has occupied 1st slot.

Workforce

Singapore boasts of a highly qualified workforce and has topped the BERI’s ‘Labor Force Evaluation Measure‘ for several decades. It also has the most productive workforce in the world.

In accordance to BERI’s ‘Labor Force Evaluation Measure‘, UK is ranked 11th while it has attained 25th rank for workforce productivity as per a survey conducted by World Economic Forum.

Other elements such as efficient bureaucracy, good standard of living and an excellent business environment add on to its features to make it a value proposition for Singapore company setup.

Marty Ron is a freelance writer, technical writer, and editor of a leading magazine. He writes for many online E-commerce websites. He also has been writing blogs on various forums.