Starting a business: Singapore versus Australia
4 minute read
Where does Australia stand compared to Singapore for doing business? Its educated workforce, business-friendly laws and attractive tax incentives and government support definitely represent an attractive growth opportunity for companies looking to access Southeast Asia’s growth markets.
If you’re currently operating in Australia and are considering opening a Singapore subsidiary, this guide is for you – we’ll cover an analysis of the benefits of doing business in Singapore and Australia.
Overview:
- The global ranking
- Company registration
- Taxation
- Grants, tax benefits for startups
- Workforce
- Institutions and infrastructure
- Support for Aussie Companies in Singapore
The global ranking
| World Bank’s 2019 Ease of Doing Business Index | Singapore | Australia |
| Overall | 2 | 18 |
| Starting a business | 3 | 7 |
| Taxation | 8 | 26 |
| Cross-border trading | 45 | 103 |
| Contract enforcing | 1 | 5 |
What does this mean? That if you’re looking to build a presence in Southeast Asia, you’ll find Singapore an easier and more business-friendly process compared to Australia. In comparison, take a look at the rankings of other popular hubs in Southeast Asia:
- Hong Kong at #4
- Malaysia #15
- Thailand at #27
- Indonesia at #73
Singapore is also an obvious choice if you have IP you’re bringing over with you – the World Economic Forum’s Global Competitiveness Report ranked Singapore as having the best IP protection in Asia (and ranked #3 globally).
Company registration
Ease of incorporation
If you’re based in Australia (or overseas generally), and looking to set up a Singapore company you will need a Filing Agent to submit your incorporation on your behalf.
Although businesses may consider other structures such as a branch or representative office, a subsidiary is the most common approach for a company wanting to set up shop in Singapore. For more information on the main differences between a branch and a subsidiary check out our short resource: Singapore Branch vs. Singapore Subsidiary.
For a private limited company the minimum requirements in Singapore are:
- One shareholder (can be a foreign individual or company)
- One locally resident director
- $1 paid-up capital in any currency
- A registered business address in Singapore
- A company secretary – an appointed individual to manage your company’s reporting deadlines and to help update shareholder and director details when needed.
To help our clients satisfy the above criteria when setting up a company in Singapore, at Sleek we offer nominee local director and registered business address services.
Directors and requirements
| Minimum requirements for a private or proprietary company | Singapore | Australia |
| Directors | 1 locally resident director | 1 locally resident director |
| Shareholders | 1 shareholder | 1 shareholder |
| Other requirements |
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Taxation
Singapore occupies 8th position against Australia’s 26th rank for ease of paying taxes. The table below demonstrates differences in the tax rates in two countries.
| Tax Types | Singapore | Australia |
| Income tax | Up to 22% | Up to 45% |
| Corporate tax | 17% | 30% |
| GST | 7% | 10% |
| Branch tax | 17% | 30% |
| Capital gain tax | No | 30% |
| Withholding tax on dividends | No | 30% |
| Withholding tax on interest | 15% | 10% |
Grants, tax benefits for startups
Both countries offer funding, tax incentives, and facilities for targeted startups.
Australia offers R&D tax incentives in the form of a 40% refund of development expenses to companies spending above $20,000 on research. A matching grant is offered for startups in the renewable energy sector. Major grants by the government include up to $20,000 as a business growth grant, incubator support grant between $5,000 and $500,000 for entrepreneurial support.
For more information on setting up in Singapore you can refer to The Australia Bible, a useful resource produced by the Sydney Landing Pad that was contributed to by Sleek.
In Singapore, startups have access to many different grants and funding schemes from the Singapore Government and various programs. For more information refer to our resources:
- Grants & Funding Schemes in Singapore for Entrepreneurs (5mins read)
- The 6 main sources of funding for your startup in Singapore (5min read)
- Your 5 minute Guide to Singapore’s Corporate Tax System (5min read)
Workforce
Both Australia and Singapore have multicultural, multilingual, and educated workforce. About 40% of Australians have tertiary education. In Singapore, which also has a 100% urban population, 47% of residents have degrees or diplomas. Here is a labor force comparison ranking based on the Global Competitive Index.
Institutions and Infrastructure
Australia and Singapore have very good institutional and infrastructure support. According to the World Bank report, Singapore leads the world in infrastructure while Australia is at 30th position. The city-state also scores over Australia in critical areas, such as:
- The burden of government regulation
- The efficiency of the legal framework
- The future orientation of government
- Quality and efficiency of transport and seaport services
- ICT adoption and technological readiness
Support for Aussie companies in Singapore
The key business and social organisations supporting Aussie businesses in Singapore are:
- Australian Trade & Investment Commission (Austrade)
- The Australian Chamber of Commerce, Singapore (AustCham)
- Australian & New Zealand Association (ANZA)
- The Australian High Commission to Singapore
Bottom line
Australia has a vast market and huge natural resources while the city-state Singapore offers fast cross-border trading, easy access to amenities, and greater foreign market access. Although Australia is often referred to as being strategically positioned on the doorstep to the Asia Pacific, if you are looking to take advantage of business-friendly laws, favourable tax policies and a location in the heart of the Southeast Asian market, then Singapore is likely to be a great choice for your business.
