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Doing Business in Singapore vs Malaysia
Two Major Business Hubs. Two Thriving Economies. Which Is Better for Your Business?
Neighbours and strong competitors. That’s the best way to describe what it is like doing business in Singapore vs Malaysia.
For any investor looking to start a business in either country, there is a lot to think about. Each country has their own distinctive and unique strengths and reasons why you should invest. Depending on your business niche and industry, either country could be potentially beneficial depending on what you need for your business.
Although Singapore had a head start, Malaysia has made significant leaps and bounds over the years economically. Now, the two countries are almost on par with each other. Moreover, the Iskandar Malaysia which is located north of Singapore is primed to be an ideal hub for Singapore-based companies. Singapore is already one of the region’s major investors with US$24 billion worth of projects invested.
Comparison Between Singapore and Malaysia
Let’s do a comparison between doing business in Singapore vs Malaysia and see what it’s like to do business in either country:
|Global Ranking (Annual Global Competitiveness Report 2018/2019)||1st within Asia-Pacific; 2nd Globally||6th place in Asia-Pacific; 25th Place Globally|
|Local Language Spoken||English, Malay, Mandarin and Tamil||English and Malay|
|Legal System||English Common Law||English Common Law|
|Special Corporate Tax Rates for Resident Companies||Available (Full exemption on first RM100,000 of chargeable income for the first 3 consecutive Year of Assessment (YA)||Available (20% on first RM500,000 in first Year or Assessment (YA)|
|Construction Permits||26 Days; 11 procedures||130 Days; 15 procedures|
|Average Literacy Rate||97%||97%|
|Legal Entities for Business Setup||Sole Proprietorship, Subsidiary, Private Limited Company Limited Liability, Branch Office and Representative Office||Sole Proprietorship, Subsidiary, Private Limited Company Limited Liability, Branch Office and Representative Office|
|First Annual General Meeting (AGM)||Within 18 months of incorporation||Within 18 months of incorporation or the first 6 months of incorporation|
|Foreign Workers||Must have a valid work visa||Must have a valid work visa|
In terms of global economic competitiveness, both countries are on par with each other. Both Singapore and Malaysia have excellent infrastructure facilities in place.
In terms of company incorporation, both countries similarly require 3-steps before you can start your business. The difference would be in the length of time required to incorporate your company. In Singapore, it takes 2.5 days to get your business up and running. In Malaysia, it takes 6 days.
Doing Business in Singapore vs Malaysia – Investor Protection
Conducting business with transparency is something all investors need to think about for the credibility of your business. Based on the Strength of Investor Protection Index, Singapore ranks 9.3 and Malaysia 8.7 out of 10. This score considers the transparency level of transactions and what a shareholder’s rights to sue for misconduct.
In terms of protecting investors globally, Singapore ranks 2nd place while Malaysia a close 4th. Singapore also happens to place a stronger emphasis on transparency and compliance. This measure ensures that genuine investors have their wealth protected.