Written by Ella Shindler
Dubai and Singapore are fast-growing hubs when it comes to startups. They both have a strong focus on attracting tech and other business startups, but which place is better for business?
By examining tax laws, business climate, work culture, corporate compliance and overall rankings by international bodies, it is clear what the pros and cons are for starting a business in Singapore and Dubai.
Location
First up, consider which location has the most beneficial links to the countries that you would want to trade with.
Singapore has greater connections to China, Malaysia, India and other Asian nations.
Dubai, however, has closer existing links to Middle Eastern and African countries such as Egypt, Iraq, and Qatar.
These connections make sense based on geographical location, but it is important to keep in mind that in the globalised economy, geography is playing a smaller and smaller role. For both Dubai and Singapore, their biggest trading partner is China, according to World Integrated Trade Solution.
Work Culture
Work culture makes a difference to how businesses establish roots in a new place, so it is important to consider how to best fit in with different cultures.
Dubai has a more laid-back approach than Singapore in this regard. Relaxed networking events and a focus on creating friendly personal relationships. Dubai has a big Muslim population, so companies in the alcohol industry, for example, would find this a more difficult place to be based.
Singapore, however, has a greater emphasis on hierarchy, according to Corporate Services. This means being professional and punctual is a bigger deal when establishing business roots in Singapore.
English is the official business language in both places, facilitating international interactions.
The Law
Before starting a business it is crucial to understand the legal systems and how they differ.
Singapore: The law is based on the English common law system.
Dubai: A combined legal system of Sharia laws and International laws.
This has strong implications on their enforcement of contracts and Singapore is stronger in this aspect: enforcing 84.5% of contracts compared to Dubai’s 75.9%, according to IMD.
Singapore also has very advanced protections on intellectual property, which is particularly relevant for new technology startups and is consistently ranked higher than Dubai in the World Economic Forum’s Global Competitiveness Index.
Corporate Compliance
In Dubai, corporate compliance process is longer and pricer than in Singapore.
The business-government interaction model in Singapore is much simpler as you can complete company incorporation as well as all compliance activities online. For Dubai, you need to visit the city yourself before start a business in the city
Wages And Cost Of Living
To live in Singapore costs around 34% more than in Dubai, where rent is significantly cheaper (according to SmartSinga). However, as Statrys reports, the purchasing power in Singapore is significantly higher than in Dubai.
Both places have very low unemployment rates, further showing the potential for economic prosperity. In Dubai the rate of unemployment is 0.4%, compared to 1.9% in Singapore.
Forecasted Economic Growth
As the low unemployment rates indicate, there is strong economic growth in both places.
Dubai: According to Gulf News, Dubai is aiming to double their economy within the next ten years, and the Dubai International Financial Centre continues to grow.
Singapore: There is a strong forcast with around 2.5% growth in 2024 and over 16,000 new jobs in the first half of the year, according to Asean Briefing.
Clearly there is not a great deal of difference in this case and both places are some of the fastest-growing locations for new business.
Incentives To Entice Your Business
Dubai and Singapore offer numerous incentives to attract your business.
Dubai: There is a specific focus on high tech business and attractive free trade zones. Their incentives include an ‘Innovation Impact Grant’, ‘Innovation Fund’ and the ‘Mohammed Bin Rashid Fund for SMEs’ (Small and Medium Enterprises).
Singapore: They have around 80 different schemes to incentivise new businesses. Some of the most attractive schemes include marketing assistance free of charge, reductions in tax and cash grants.
Alt-text: Map of the world highlighted in blue with dollar signs and percentages dotted around and a bar chart and line graph in red across it with an outstretched hand in the middle.
Taxes
Many of the incentives become clear when you take a closer look at the taxes.
Singapore: Tax exemptions for startups reduces the corporate income tax drastically (75%) for qualifying startups.
However, Singapore has interest rates and royalty tax rates and the tax on residents is progressive from 0% – 22%.
Dubai: There are 0% interest rates and no royalty taxes. There is also no personal income tax on residents or foreign workers.
VAT is at 5% for both places, but Singapore also has GST at 7% for business with a taxable turnover. Neither Dubai nor Singapore will charge dividend or capital gains tax, again showing why it is an attractive spot for startups.
Dubai’s tax system is more complicated than Singapore’s as it has a mixture of federal and local tax laws, but overall there are fewer taxes in Dubai.
Global Rankings
The rankings are a good note to end on as they take into account the investment and development of talent from locals, as well as focusing on how successfully the countries can appeal to the global labour force and the level and diversity of skill in the talent pool.
It is highly notable that Singapore is 2nd on the 2024 IMD World Competitiveness Rankings, whereas Dubai is 17th.
Dubai increased by 5 places in the last year, yet Singapore increased by 6.
This is once aspect where the difference is more drastic between the locations, but both remain highly ranked in the global economy.
Conclusion
Clearly, both Dubai and Singapore are very attractive places to start new business, but it is interesting to see where there are advantages in one place over the other. It is important to consider the priorities of your startup, for example the cost of living or the ease of doing business when not in the country.
