Contentment is the antithesis of development, so it is little surprise that every entrepreneur in existence possesses this one fundamental character trait: the eternal and unquenchable desire for ‘more’. In our modern society, where the internet has made it ever easier to conduct global business, this elusive goal usually includes a desire to expand overseas, and two of the most exclusive and celebrated commercial hubs are Dubai and Singapore. And for good reason.
Singapore is a modern-day metropolis, filled to the brim with restaurants, pubs, and clubs. Widely considered to be one of Asia’s most exciting and enjoyable cities, it is exquisitely clean and incredibly modern, emerging as a thriving centre for business and a significant economic force due to ever increasing foreign direct investment.
Like Singapore, Dubai is a city that has undergone a rapid evolution in recent years. A wonderland of skyscrapers sitting incongruously against its arid desert landscape, it has an open and dynamic business environment that has caught the interest of enterprises from around the world. The foremost place for global expansion, it offers burgeoning enterprises and a uniquely attractive proposition.
But are these cities all they seem on the surface? What’s the true reality for ventures looking to expand abroad? Let’s start with the pros…
Singapore and Dubai have done much to encourage innovation and investment from overseas, and as a result, they have sought to make commercial conditions as attractive as possible.
Both offer low levels of taxation, with Singapore resident companies billed a corporate income rate of 17 per cent on their chargeable income. This is the third lowest marginal rate in the world, and the amount payable tends to come out lower yet once government incentives, subsidies, and schemes have been taken advantage of.
Businesses stand to benefit even more from the taxation system when buying property in Dubai. Widely considered a tax-free city, the United Arab Emirates government does not impose income taxes on any company or individual resident there, making it an extremely attractive candidate for overseas expansion.
Ease of setting up a business
Another plus point in favour of expanding into these localities is the simplicity of setting up a business within their domains.
According to a report by the World Bank, companies that choose to settle in Singapore face few challenges, with the country’s Economic Development Fund geared towards offering support, and an open and free trading environment with minimal taxation and absolute transparency.
This is part of the appeal of Dubai too – a city reported to be the best place in the world for global expansion. Specifically constructed to be commercially friendly, it is a region where doing business is easy and every commercial enterprise is welcomed. With a choice of over 30 free zones in which to set up a venture, it is a cut above its international competitors.
Those considering expanding must also take into account the benefits provided by the geographic positioning of various locations, and in this regard, Singapore and Dubai both score highly.
Singapore is viewed as a prime location for gaining access to the South East Asian markets and is frequently referred to as a trade hub for the region. This is just one of the reasons why 700 British businesses operate there, and why the United Kingdom is its largest investor.
Dubai holds a similar appeal, with a stable and westernised market that provides a platform to the entirety of the Middle Eastern countries. Another city striving to claim the accolade of regional hub, it is a fantastic spring board for gaining access to a wider market.
Although Singapore and Dubai both have large pools of ambitious and well-educated young professionals to draw employees from, they also have the benefit of being attractive to your existing workforce. They have many factors in common to lure those who may be willing to uproot – from their temperate climes and unending sunshine to their favourable taxation systems and thriving currencies.
In Dubai, for example, there is no tax to pay on income. This means that even if the price of commodities is similar to that in the United Kingdom, your employees will still find themselves with a disposable income around 30 per cent higher than the one they would enjoy at home.
Although the taxation rules are not quite as advantageous in Singapore, personal income starts at a very low level, and even those in the top bracket will find themselves paying no more than 28 per cent of their gross income to the government. This compares favourably with domestic rates, providing a pretty persuasive financial advantage for those who relocate there.
This all sounds rather enticing, but there will always be some issues to temper the rose-tinted picture. In the interests of transparency, and allowing you to make an educated and fully-informed decision, these are amongst the most important…
Incredibly high rents
For companies looking to relocate abroad, Singaporean rents, on both commercial and residential property, can be a significant bugbear. Numbering amongst the highest in the world, they can take a real chunk out of your profits and your employees’ incomes. The situation is, unfortunately, similar regarding buying or renting property in Dubai, although to a lesser extent.
The best way to combat this is by utilising property portals covering the local area, such as PropertyGuru in Singapore and Dubizzle and YZER Property in Dubai. Showcasing a huge number of buildings available to buy or rent within the area, these should allow you to secure a suitable place at a competitive rate.
Cultural and legal differences
Looking at the situation from another perspective, you must analyse the likelihood of employees being willing to stay in these countries long term. Although hiring a local workforce is one way to combat this, if you want your own people in top positions, it may be harder to convince them to remain than you think. Homesickness and vast cultural differences can play a huge part in shortening the length of their tenure.
What’s more, strict employment laws in Dubai also mean that those who lose their job must leave the country if they cannot find work within 30 days – an issue that could count against you if you personally chose to migrate there.
To put it into perspective, relocating to these business hubs can present entrepreneurs like yourself with unparalleled opportunities to consolidate and expand on your profits, customer base, and reach. Ideally geared towards being perfect commercial environments, Singapore and Dubai are cities set up for success, but like everything in life, they do come with significant drawbacks. It’s a case of weighing these factors in the balance before deciding on your next move, but if you’re ready to take the leap, there’s no place where you’re less likely to fall than in these two truly unique locales.