According to the study, Singapore company incorporation can be completed within 1 working day while it normally takes 4-6 months to incorporate a company Indonesia. The company incorporation procedure in Singapore is streamlined and foreign entrepreneurs can transact online with the Companies Registry. Company formation in Indonesia is a lengthy and complex procedure, necessitating transactions with several government bodies. Furthermore, Singapore does not impose any restrictions on the type of business a foreign entrepreneur can start whereas Indonesia restricts the fields of business that are open to foreign investment.
The study also finds that while a Singapore company can be setup with a share capital of $1 only, Indonesian authorities will only approve a company that is being setup by a foreign business professional if it has a minimum share capital of US$ 100K to $250K. A Singapore company can be registered with a single shareholder while incorporation of an Indonesian company requires a minimum of two shareholders.
Corporate taxes are significantly lower in Singapore as compared to Indonesia. Singapore's headline corporate tax rate is 17% while the flat tax rate of Indonesia stands at 28%.
According to the World Bank report, World Trade Indicator 2008, while Indonesia has low tariffs to encourage trade, it fails to provide good bureaucratic procedures and law enforcement. The report shows that Indonesia has low import tariffs and good trade facilitation, but still scores poorly in providing the necessary supporting conditions for efficient business.
"Singapore is consistently ranked as the world's best place to do business and it is easy to see why. Company incorporation is quick and efficient, there are no restrictions on foreigners who want to setup business here, taxes are business friendly and competitive, and immigration policies are progressive. Indonesia performs poorly in such indicators and the 4-6 month timeline for company incorporation, which is often entangled in bureaucracy, is simply unacceptable to foreign investors. Moreover, the restrictions on foreign ownership, a high share capital requirement and high taxes make Indonesia a difficult place to do business," said Andrew Chen, a spokesperson from the Singapore based business information portal (http://www.guidemesingapore.com) that released the study's findings. “The legal culture in Indonesia unfortunately is undermined by corruption which has been rife in public service. Even those businesses seemingly doing the right thing may find themselves sinking in a muddy legal environment.”
To learn more about doing business in Singapore, refer to Singapore Company Setup: http://www.guidemesingapore.com/
