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Singapore vs Vietnam – Business Setup, Tax & Market Guide (A 2025 Guide)
Introduction
Entrepreneurs and investors often face a tough decision when choosing the ideal location to set up their businesses in Asia. Both Singapore and Vietnam offer unique advantages, making the choice particularly challenging. Singapore is renowned for its competitive business environment, high quality of life, and cost-effectiveness for smaller businesses. On the other hand, Vietnam is emerging as a dynamic hub with rapid economic growth and an affordable labor market. This article provides a comprehensive comparison to help you make an informed decision about incorporating a company in Singapore or in Vietnam.
Key Comparison Points when considering setting up a business in Singapore and Vietnam
Business Environment
- Singapore: Known for its political stability, robust legal framework, and strong government support, Singapore is a haven for businesses seeking a secure and predictable operating environment.
- Vietnam: While Vietnam has made significant strides in political and economic reforms, the legal framework and government support are still evolving, which may pose challenges for foreign investors.
Ease of Company Incorporation
- Singapore: Renowned for its streamlined processes, the company incorporation in Singapore can be completed within a few days. The country offers 100% foreign ownership, minimal bureaucratic hurdles, and a transparent regulatory environment.
- Vietnam: While Vietnam permits 100% foreign ownership, the incorporation process is more complex. It typically takes longer to incorporate a company in Vietnam, involving approvals for an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC).
Taxation
- Singapore: Singapore offers a competitive corporate tax rate of 17%, numerous tax incentives, and no capital gains tax, making it highly attractive for businesses.
Singapore also offers incentives for startups and industries like tech and finance. Additionally, Singapore has established nearly 100 Double Taxation Avoidance Agreements (DTAAs), facilitating international business operations. - Vietnam: Vietnam’s corporate tax rate is 20%. Although there are tax incentives for certain industries and regions, the country does impose a capital gains tax.
Vietnam provides tax incentives for businesses in high-tech, renewable energy, and export-oriented sectors. The country is also expanding its network of DTAAs to attract foreign investment.
Cost of Living and Business Operations
- Singapore: While living expenses in Singapore are high, operational costs for small businesses are relatively lower due to efficient systems and competitive office rental rates.
- Vietnam: Vietnam offers significantly lower living and operational costs, making it an attractive option for cost-conscious businesses.
Market Access and Trade Agreements
- Singapore: As a member of numerous free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Singapore provides businesses with extensive market access.
- Vietnam: Also a CPTPP member, Vietnam offers access to major markets and is becoming a manufacturing hub due to its trade agreements and competitive costs.
Quick Comparison Overview
Here’s a quick overview of the key differences for easy reference:
| Factor | Singapore | Vietnam |
|---|---|---|
| Business Environment | Highly stable and supportive | Developing but improving |
| Corporate Tax Rate | 17%, various incentives | 20%, incentives for specific sectors |
| Capital Gains Tax | None | Applicable |
| Labor Market | Highly skilled; higher labor costs | Young, cost-effective workforce |
| Ease of Incorporation | Seamless and digitalized | More complex |
| Infrastructure | World-class; excellent connectivity | Developing; significant investments underway |
| Business Costs | Moderate | Low |
| Market Access | Global connectivity | Regional connectivity |
Conclusion
Choosing between Singapore and Vietnam depends on your business priorities:
- Singapore: Ideal for businesses seeking a stable, transparent environment with advanced infrastructure and access to global markets.
- Vietnam: Attractive for cost-sensitive operations, especially in manufacturing and tech, with a rapidly growing economy and improving infrastructure.
Both countries offer unique advantages, and businesses may consider a dual strategy to leverage Singapore’s global connectivity and Vietnam’s manufacturing capabilities.
Why Choose 3E Accounting for Your Business in Singapore?
Whether you’re planning to establish a regional headquarters, expand operations, or simply incorporate a company in one of Asia’s most competitive economies, Singapore offers unmatched advantages—from a pro-business regulatory environment to extensive global connectivity. However, navigating incorporation procedures, tax frameworks, and compliance nuances can be complex without the right partner.
That’s where 3E Accounting comes in. With years of proven expertise, we simplify the journey for entrepreneurs, SMEs, and multinational clients alike. From seamless company registration to ongoing compliance and accounting support, we offer end-to-end business solutions that help you start strong and grow confidently.
👉 Explore our Singapore Company Incorporation Services Package to see how we can support your setup.
👉 Need a step-by-step walkthrough? Visit our Guide to Register a Company in Singapore for expert insights and practical tips.
Frequently Asked Questions
Which country is better for business: Singapore or Vietnam?
Answer: Singapore offers stronger legal frameworks, easier incorporation, world-class infrastructure, and lower corruption levels. Vietnam is cost-effective and ideal for labor-intensive industries. Choose based on your business model and long-term goals.
What are the main differences in tax structure between Singapore and Vietnam?
Answer: Singapore has a flat corporate tax rate of 17% with attractive exemptions, no dividend tax, and GST at 9% (from Jan 2024). Vietnam has a 20% corporate tax rate, with added complexities in VAT, CIT, and Foreign Contractor Tax.
Is it easier to start a business in Singapore or Vietnam?
Answer: Singapore ranks higher in the World Bank’s Ease of Doing Business index due to digital processes, shorter registration timelines, and pro-investor policies. Vietnam has improved, but still lags in regulatory efficiency and bureaucratic processes.
Can foreigners own 100% of a business in Singapore and Vietnam?
Answer: Yes, foreigners can own 100% of companies in both countries. However, Singapore allows full ownership across more industries without local shareholder requirements. Vietnam often requires local partners in restricted sectors.
Why choose Singapore over Vietnam for regional headquarters?
Answer: Singapore offers political stability, global banking access, advanced infrastructure, and strong IP protection. It’s preferred by global MNCs for strategic operations, regional HQs, and fintech/startup ecosystems.
Abigail Yu
Author
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
