In the latest edition of the World Bank's Doing Business rankings, New Zealand was placed first as the easiest place to do business, closely followed in second place by Singapore. The rankings looked into factors including starting a business, getting credit, paying taxes and enforcing contracts.
For entrepreneurs aiming to make their mark in the New Zealand and Singapore business environments, here is a look at how these countries fare for running startups.
Establishing a startup in Singapore is a fast and easy process, taking one to five days to register a business with the Accounting and Corporate Regulatory Authority, depending on the business structure. Learn more about what to do and what not to do when incorporating your startup here. Singapore has a low tax regime with a corporate income tax rate of 17% and no capital gains tax. The personal income tax rate is progressive from 0% up to 20%. Qualifying startups enjoy tax incentives namely getting full exemption on the first S$ 100,000 of normal chargeable income and a 50% exemption on the next S$200,000. Such a tax exemption is offered for the first three consecutive Years of Assessment.
Likewise, in New Zealand business establishment is also a quick procedure settled within a few days. New companies typically choose one of the three structures; namely sole trader, partnership or limited liability. As for the tax regime, companies in New Zealand pay a corporate tax of 28%, with no capital gains tax. The personal income tax rate is progressive, starting from 10.5% for income between NZ$0 to NZ$14,000 till 33% for income above NZ$70,000.
According to the Global Startup Ecosystem Report (2017) by Startup Genome, Singapore was ranked among the top 20 startup ecosystems in the world along with well-known places such as Silicon Valley, London and closer to home, Beijing and Shanghai, based on criteria such as performance, funding, market reach, talent and startup experience.
With a thriving startup scene, Singapore is ranked in the 12th spot. To date, Singapore boasts an ecosystem with a value of US$11 billion with an estimated 1,600 to 2,400 tech startups.
As for New Zealand, it was featured for the first time in the report. Its ecosystem is valued at US$807 million with approximately 400 to 600 tech startups.
Both in Singapore and in New Zealand business ecosystems receive a significant government support.
Earlier this year, the Singapore government set up "Startup SG" which is an umbrella branding to bring together all the support schemes for startups. "Startup SG" aims to make it easy for entrepreneurs to better know and understand the various schemes available for them. For more details about the different startup grants from the Singapore business-friendly government, you can visit:
In New Zealand, the Callaghan Innovation is a government agency which has been put into place in 2013 to support hi-tech businesses. It offers a number of R&D grants for various needs, ranging from an early stage startup to a company seeking to expand and grow. In particular, the Callaghan Innovation offers the Incubator Support Programme which aims to help high growth potential businesses with practical support and some investment capital.
Singapore is recognised as the top place across startup ecosystems around the world for tech talent. In particular, it has been rated first in having an accessible pool of experienced software engineers and growth employees which have two or more years of prior experience in another startup in the Global Startup Ecosystem Report. For instance, tapping on this talent pool, Grab - a tech company offering ride-hailing and logistics services via its mobile app - has made Singapore its headquarters with an R&D facility.
In comparison, the ability to find experienced software engineers and growth employees is lesser in New Zealand. Nonetheless, the country has been able to produce successful home-grown startups such as Rocket Lab, which delivers a range of rocket systems and technologies for quick payload deployment. Rocket Lab has major investors such as Lockheed Martin and has clients including the US Department of Defence.
Strategically located in Southeast Asia, Singapore's market in itself is small. Nonetheless, it offers an easy access point to up- and -coming tech markets in the region. In fact, it is an ideal gateway to the region of more than 2.8 billion inhabitants.
Similar to Singapore, New Zealand's domestic market is too small and there is limited growth for startups. However, it offers a look-alike market to the Western world, making it conducive to serve as a test market before a startup plans to scale globally.