Most people assume that it is favorable to set up a business in the United States of America. However, in the recent years, the advantages of setting up businesses in the USA have become less significant. Countries such as Singapore have designed business-friendly regulations that offer the best prospects for the entrepreneurs. The favorability of setting up a company in Singapore has been boosted by the overall performance in the country. In a report of Ease of Doing Business Reports by the World Bank portrays Singapore to offer a favorable environment for businesses among 183 economies in the world. In the same report, the USA ranked seventh hence showing the increased number of challenges affecting firms in the country (Wilson, 2015). Importantly, the incorporation of a company in Singapore requires only two procedures that can be undertaken in a span of two days while the USA requires six procedures that are completed in six days. The tax rates in Singapore has been ranked five among the economy countries while that of the USA is ranked 53 showing that the tax rates in Singapore are much lower as compared to those of the USA. In addition to that, Singapore is ranked eighth in the years 2015 in a report constituting of the best countries to set up organizations. On the contrary, USA was ranked 22 among the same report. Some factors have favored business practices in Singapore due to the trade freedom, monetary freedom, technology, property rights, and investor protection as well.
The United States of America has harsh tax regimes in the world. Thus, this plays a significant role in making the country unfavorable for businesses. In contrast, the tax system in Singapore is less harsh fostering the spirit of entrepreneurship (Country Reports – Singapore, 2016). The tax and reform Index ranked Singapore as the 11 countries in the world with low tax burdens while the USA was ranked 18. Singapore is one-stop-center for corporations to manage their assets due to its strong IP protection regime, a factor that the USA government has ignored.
The economy of Singapore is the second most competitive as rated in the WEF. The country has less or no corruption due to the efficiency of the government. The effectiveness of goods in Singapore is high as compared to that of the USA since it was ranked first in the WEF. The labor and financial markets of the country are rated second while the infrastructure was ranked as the second best in the world. The global competitiveness of the USA is small as compared to that of Singapore. Some factors such as wasteful government spending, market inefficiency, as well as, readiness for technology have played a significant role in weakening the competitive nature of firms situated in the country. Singapore has edged the USA in various economic sectors such as the protection of the property rights, freedom of corruption, freedom to open and close businesses and free trade across borders (Alden, Slaughter, Card, & Daschle, 2011).
The business entrepreneurs in Singapore have the openness to trade. The country has an open trade policy, which places little barriers to external trade. Besides that, the trade strengths in the country include the simple structure of its tariffs, high-quality transport infrastructure, and excellent customer services. The USA entrepreneurs are not open to trading to external countries due to the compound nature of the tariff systems. Singapore has overtaken the USA in the world’s most innovative company. The strengths of the Singapore trade and innovation system has enabled the country to excel in the sphere of innovation. Some of the factors that have led to an increased economy in the country include the democratic principles of marketing, open corruption in doing business and its simple rules and regulations of conducting and opening businesses in the state as compared to the USA. Singapore has an efficient bureaucracy that enhances its appeal as an investment destination (Alden, Slaughter, Card, & Daschle, 2011). Notably, Singapore’s citizens trust the politicians more as compared to the USA. Besides that, the entrepreneurs in the country have the least burden of government regulation while the government policies are transparent in contrast to the USA.
Singapore has the best workforce that is highly skilled among all the world economies. Notably, the state has the best labor-employer relations and a productive workforce as well. Besides that, Singapore has topped in the life surveys since it has emerged as the top destination for expats. In the year 2008, the USA experienced an economic downturn. As it tries to recover, the weaker import demands of the USA commodities in the European Union has downsized the USA economy. On the contrary, Singapore’s economy has increased significantly, in the recent years. Unlike in the USA, the government of Singapore has its procurement procedures remaining unchanged. The model of development and growth of business in Singapore has grown tremendously and consistently as well leading the state into a high-income country with a high GDP per capita as compared to the USA since the state has had several moments of economic downturns that have significantly reduced its GDP. The growth of Singapore into a high-income country emanates from an open and transparent trade regime due to its strategic positioning. In addition to that, Singapore’s government has employed various steps aimed at improving the economy of the country of the state towards growth stimulated by innovation processes (Singapore Country Risk Report, 2016). Thus, this paper shows that setting a business in Singapore is more efficient and has higher chances of success of a compared to the USA.
- Alden, E. H., Slaughter, M. J., Card, A. H., & Daschle, T. (2011). U.S. Trade and Investment Policy. New York: Council on Foreign Relations.
- Country Reports – Singapore. (2016). Singapore Country Monitor, 1-36.
- Singapore Country Risk Report. (2016). Singapore Country Risk Report, (4), 3-45.
- Wilson, P. (2015). Monetary Policy And Financial Sector Development. Singapore Economic Review, 60(3), -1. doi:10.1142/S0217590815500319
