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Analysis of Doing Business in Singapore vs Japan: What to Consider before Setting up?

doing business in singapore vs australia

In the ever-evolving landscape of Asian markets, businesses face pivotal decisions when expanding. Singapore and Japan stand out as leading options, each presenting distinct advantages. This analysis compares the strategic considerations of doing business in Singapore vs Japan, exploring factors like economic stability, regulations, culture, and market prospects. By scrutinizing these dynamics, businesses can refine their expansion strategies and tap into the immense potential of these influential markets. 

Business Environment 

Singapore stands out as the top choice for foreign companies due to its global accessibility, tax advantages, streamlined incorporation process, government grants, and other incentives offered by ACRA. Meanwhile, Japan, renowned for its high-tech landscape and affluent population, has faced challenges with its traditional reliance on paperwork, worsened by the global pandemic, which led to a 4.7% decrease in GDP in 2020, prompting a sudden shift towards digitalization among corporations. 


Foreign entrepreneurs often choose Singapore as their gateway to enter the Southeast Asian market, leveraging its strategic location and robust infrastructure. Unlike Japan, which primarily targets the East Asian and Japanese markets, Singapore offers easier access and a more favorable environment for business expansion into the region. 

Business Language 

Singapore holds the advantage for international business due to its top-notch English proficiency, scoring first in Asia with an EF EPI of 635. This linguistic capability, coupled with widespread proficiency in Chinese, Malay, and Tamil among Singaporeans, facilitates seamless communication with a diverse population. In contrast, Japan, ranking 13th in English proficiency in Asia, primarily operates in Japanese, presenting potential language barriers for foreign businesses. 

Incorporation and Setup Process

In Singapore, incorporation procedures are streamlined and accessible to both local and foreign investors through BizFile+, with most enterprises incorporated within 1-3 business days. In contrast, Japan imposes minimum requirements for foreign investors, including a personal bank account or a director with a bank account in Japan and a registered address in the country.  

However, the incorporation process in Japan may pose challenges for foreigners due to bureaucratic procedures predominantly in Japanese, making Singapore a more favorable choice for efficient and accessible business establishment. 

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Annual Filing Requirements 

In Singapore, entrepreneurs can swiftly submit their paperwork in accordance with the incorporation requirements via BizFile+ for examination by ACRA. Conversely, establishing a company in Japan entails additional hurdles for foreign investors, such as obtaining a manager or investor visa, notarizing articles of incorporation, and acquiring a corporate seal. Singapore’s streamlined process and support services make it a more efficient and hassle-free business setup. 

Business Visa Requirements 

Foreign entrepreneurs and specialists seeking to work in Singapore can apply for an Employment Pass or EntrePass, granted by the Ministry of Manpower, while Japan offers the Start-up Visa alongside Manager and Investor Visas to attract foreign investors. Singapore’s streamlined visa processes and variety of options make it compelling for those looking to establish themselves or their businesses abroad. 


Singapore boasts one of the world’s most competitive tax systems, with a flat rate of 17%, along with tax incentives and benefits for foreign corporations. In contrast, Japan implements bracketed tax rates, with rates going as high as 23%. 


Singapore’s bureaucracy is renowned for its efficiency, typically processing procedures, registrations, and applications within 3 to 5 working days, contributing to Singapore’s status as one of Asia’s leading economies despite occasional delays. In Japan, the bureaucracy is similarly efficient, drawing its workforce from prestigious universities, but the predominance of Japanese-language forms poses challenges for foreign applicants seeking registrations, permits, and compliance. 

Openness to Trade  

Singapore, a modern city-state in Southeast Asia with a population of 5.5 million, is a major financial hub boasting a $473 billion stock market and is forecast to dominate almost a third of agri-commodity trade by 2025. Its success in global trade is attributed to factors such as its strategic location, minimal corruption, skilled workforce, low tax rates, and advanced infrastructure, which attract thousands of multinational corporations. 

Singapore’s asset management industry is further bolstered by refined tax incentives and advantageous economic treaties with over 70 countries. Meanwhile, Japan, with its open stance on international trading, saw 31% of its GDP contributed by international trade and investments in 2020, while Singapore’s trade to GDP ratio stood at 321% the same year, emphasizing its robust encouragement of foreign investment and trade.

Global Competitiveness 

According to the ranking of the World Economic Forum’s Global Competitiveness Index, Singapore tops the charts as the most globally competitive nation, with a score of 84.8 out of 100. Following closely behind is Japan, ranking 6th overall with a score of 82.3 out of 100. 

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A Snapshot Comparison | Singapore vs Japan 

Japan, the third-largest global economy, offers economic sophistication but has bureaucratic challenges. Singapore, a major financial hub, excels in ease of business, low taxes, and advanced infrastructure. The table below provides a quick comparison of key factors for businesses considering these two environments.

Aspect Singapore Japan 
Economic Factors   
Economic Size Major Asian financial hub Third-largest economy in the world 
Industries Trade, financial, agri-commodity, technology Automobiles, electronic equipment, chemicals 
Top Export Destinations Global trade, strong ties to Asia-Pacific United States, China, South Korea, Thailand, Hong Kong 
Global Companies Headquarters Attracts 7,000+ multinational corporations 51 Fortune Global 500 companies 
Labor Force and Education   
Educated Labor Force Highly educated workforce, 59% tertiary education 9th in quality of education, 3rd in scientists 
Incentives for Skilled Labor Incentive packages for hiring skilled labor Skilled labor, but complex bureaucratic process 
Business Environment   
Ease of Doing Business 2nd (World Bank) 34th (World Bank) 
Corporate Tax System 17% 23% 
Government Cooperation with Global Initiatives Adapts to FATCA, AIFMD and tax treaties Stable politically, but bureaucratic 
Infrastructure and Connectivity   
World-Class Infrastructure Top-notch transportation, network-ready High connectivity, advanced infrastructure 
Strategic Location Crossroads of maritime routes, proximity to major markets Strong global ties, strategic location 
Strong Points Attracts multinational corporations, strong connectivity, easy business environment Third-largest economy, stable, strong R&D, High connectivity, but bureaucratic process 

Where Premia TNC Comes Into the Picture 

Experience a simplified business setup journey with Premia TNC, tailored for international corporations venturing into Singapore or foreign individuals aiming for incorporation. Our all-inclusive services demystify the complex procedure, offering advice on incorporation and aiding in pivotal choices, such as appointing a local director. Trust our proficiency for the smooth and triumphant launch of your enterprise in Singapore

FAQs for Doing Business in Singapore vs Japan 

1. How does Singapore's business environment compare to Japan's?

Singapore offers a more efficient, transparent, and business-friendly environment with low bureaucracy and favorable tax rates. Japan, while innovative, often presents challenges with bureaucratic hurdles and a traditional corporate culture.

2. What advantages does Singapore offer over Japan for foreign investors?

Singapore serves as a regional hub with stable politics, strong legal frameworks, and excellent infrastructure, providing access to Southeast Asia's burgeoning markets. In contrast, Japan's insular tendencies, complex regulations, and higher taxes may deter foreign investment.

3. How do Singapore's tax and regulatory frameworks differ from Japan's?

Singapore boasts low corporate taxes, tax incentives, and a streamlined regulatory system, fostering business growth and innovation. Japan, in comparison, has higher taxes, intricate regulations, and bureaucratic complexities that can impede business operations and profitability.

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