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UAE Vs Singapore: Which is Better for Foreign Businesses?

UAE vs Singapore, which country is best for global expantion? know about the tax rates, ease of doing business and all the other factors related to ...

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Netherlands Company Registration

As an entrepreneur looking to expand your business overseas you undoubtedly face a tough choice between Singapore and Dubai. Singapore is considered Asia’s gold standard when it comes to clean and efficient bureaucratic processes and corporate governance. Dubai, on the other hand, bases its attractiveness on its zero corporate income tax rates for most businesses.

Uae vs Singapore

Each of these destinations, however, offers unique selling propositions to the startup owner. Singapore is a more diversified economy traversing shipping, manufacturing, trade, banking and finance. The UAE, of which Dubai, is often considered the most liberal of dominions, is majorly an oil-producing economy that has recently stepped up in areas such as retail, trade, and tourism.

This article will attempt to compare and contrast the strengths and weaknesses of each of these destinations for business owners old and new and discuss which situations are best matched for growth in these two very different markets.

Ease of Doing Business

While Singapore ranks No.2 in the world in ‘Ease of Doing Business’ rankings as of 2020 with a score of 86.2 overall, the UAE ranks No.16 with an overall score of 80.9.

World-Bank-Doing-Business-Scores

Acquiring Immovable Property and Office Set Up is Easier in Dubai.

If you look at the individual parameters, the UAE scores higher than Singapore in ‘Getting Electricity’, ‘Getting Construction Permits’, and ‘Registering Property’. The UAE has given considerable attention to upgrading energy support to power-intensive industries, specifically – transport, construction, and services.

It takes just under 2 days to complete property registration, while the total cost of submitting the application at the Registration Trustee’s office along with the recording of title is about AED 14,000 (AED 4,000 for the application + AED 10,000 for Registration of Title).

Acquiring and registering the title deeds to your property could take up to 8 days in Singapore and could cost up to 2.9% of the property value.

Starting a Business

As far as launching your business is concerned, both Singapore and Dubai have no minimum capital requirement paid-in. Actually, Singapore needs just $1 as the paid-in capital base.

However, Singapore company registration takes just 1.5 days (LLC) while it takes 3.5 days for the equivalent (LLP) in the UAE. In terms of cost, the registration procedure costs 17.2% of the income per capita in the UAE, it costs just 0.4% of the income per capita in Singapore. These figures assume all your documentation is in place and that filling in a form is the only major process remaining.

Company Registration Process in the UAE Vs. Singapore

UAESingapore
  • Choose the best legal form for your business
  • Name selection
  • Application for your business entity to be approved by the authorities
  • Obtaining a place of business
  • Preparation of documents, legal certificates, and legal application for final registration
  • Apply for Trade License, Visa for local business, ID grant
  • Open UAE corporate bank account
  • Collection of licenses & Certificate of Incorporation
  • Start by choosing the best legal form for your business.
  • Get your company name approved by the Accounting & Corporate Regulatory Authority (ACRA).
  • Draft the Company Constitution (previously called the Articles of Association & the Memorandum of Association)
  • Divide & Share Capital (if applicable)
  • Open a Company Bank Account after thorough KYC
No Requirement to hire Local Officer or DirectorGet a Local Corporate Secretary (usually with an accounting & reporting package)
& Local Nominee Director

NOTE: The most popular form of business entity for foreigners in the UAE is the Limited Liability Company (LLC). This has the same meaning as anywhere else in the world. However, in practice, you would need a paid-up capital of at least AED 300,000.

In Singapore, a number of companies register their LLCs with paid-up capitals of $1. However, a higher amount is recommended to maintain credibility among investors and the government.

Read More: Nominee Director

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Cultural Diversity

Note that Singapore allows foreigners to own 100% of the shares of the company they form in Singapore. It will also allow reputed professionals, entrepreneurs, and specialists easier visa and relocation processes including permanent residency.

The UAE doesn’t allow foreigners to own more than 49% of the shares of a local company. You also cannot obtain UAE citizenship unless you are born there. Instead, you get a temporary visa that will serve you for just 3 years at a time.

Affinity to Global English

When you register your company in the UAE, you will need someone who knows Arabic. Certain documentation and forms will have to be filed in Arabic.

On the other hand, Singapore has a close affinity with India and English. Singapore actually insists that you complete all forms and submit documents in English.

Corporate Governance & Bureaucracy

Apart from insisting on compliance filing etc. to be conducted in Arabic, the Emirati bureaucracy insists on personal visits for certain procedures. Sometimes, this can add delay and consequently inflate your cost of doing business.

Singapore has successfully digitized nearly all of its processes so that you don’t have to be physically present while registering your company or performing associated transactions.

Certain requirements such as the use of a local Company Secretary and a local Director ensure standardization. However, professional firms and services exist that will handle this part for you without causing any hassles.

Read More: Singapore Free Trade Zones

Corporate Income Tax Rates: Singapore Vs. the UAE

Corporate Income Tax Rates Singapore and the UAE: 2021

Singapore vs UAE corporate income tax rates

UAE VAT Vs. Singapore GST

UAE-VAT-vs-Singapore-GST

Exemptions from GST/VAT Registration

Exemptions-from-GST-VAT-Registration

Customs Duties & Stamp Duties

Customs Duties & Stamp Duties

Fees for Licenses & Permits in the UAE (Dubai)

Every foreigner starting a business in the UAE will have to either pay for an Instant License Fee or set up a digital Memorandum of Association (MOA). He/she can also skip this step and instead, submit the MOA through a notary when applying for renewal of the License after year one.

NOTE: Although it would appear that the UAE has lower business set-up costs than Singapore, in practice, businesses end up having to pay higher expenses due to the high trade license fees, road, property, and hotel taxes.

Fees for Obtaining Instant License for Businesses in the UAE/Dubai

Tax Deductions and Tax Exemptions in Singapore (New Startups)

TAX EXEMPTION SCHEME FOR NEW STARTUPS, YA 2021 (APPLICABLE FOR FIRST 3 YAs)

PARTIAL TAX EXEMPTION SCHEME FOR QUALIFYING COMPANIES YA 2021

Tax Deductions and Tax Exemptions in the UAE (New Startups)

Company Setup

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FAQ’s

Yes. Wives in the UAE must obtain permission from their husbands to step outside the marital home or be disobedient to them. It takes 1 day longer for women to register businesses in the UAE than men.

Yes. Native workers must be registered by foreign employers with the Ministry of Human Resources and the Authority for Pension and Social Security.

 

Foreign ownership of capital can go up to 100% in Free Trade Zones within the UAE. However, considerable restrictions apply and companies operating in FTAs within the UAE are subject to strict restrictions including obtaining a place of residence and business within the Free Trade Zone.

 

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