Comparing the features, process, pros and cons of company formation in Singapore vs. Estonia. Includes a handy quick-reference table showing the key features side-by-side.
If you’re looking into options for the best country in which to register a business, you may want to compare Singapore vs Estonia. Other popular locations that are searched for include Ireland, the UK vs Singapore and Delaware.
Company registration in Singapore vs Estonia is both simple, quick, and inexpensive. In terms of online company registration in Singapore vs Estonia, both offer digital registration where you don’t need to be physically present. However, in Singapore, foreigners need to appoint a local third party to process the Singapore company incorporation, for a fee.
The cost of setting up a company in Singapore vs Estonia is quite similar, and the company tax rate in Singapore vs Estonia is also quite similar.
However, while Singapore has special requirements to start a business there as a foreigner, Estonia does not. And, of the different options to run a business in Singapore - at least one requires physical relocation (Entrepass), while the Estonian e-Residency permit allows holders to run their Estonian businesses from anywhere in the world. This makes Estonia a popular choice for digital nomads and remote workers who may not want to relocate to another country.
Estonia is one of the only places where anyone in the world can apply to establish a business without needing a visa, local agents, or any technical support. In addition, Estonia is the only country with a dedicated program aimed at supporting foreigners to establish businesses there - the e-Residency program.
Below we look at how to register and run a company in Singapore and Estonia, and at the pros and cons of both options. We’ve also included a handy table below that shows a summary of these differences at a glance.
There are many advantages to starting a company in Estonia and Singapore. Comparing the two requires an in-depth look at the procedures involved in registering a company, how to pay taxes and the ease of doing business, what market access each one offers, and the overall pros and cons of each option.
Starting a company in Singapore is a popular choice among foreigners. It’s quick and easy to register a company in Singapore (all of which can generally be done online and remotely within 1 to 3 business working days - although it may take up to 2 months). It’s also simple to conduct business in Singapore, with its access to several top consumer markets and competitive tax rates.
Of the top 10 consumer markets in the world, Singapore has bilateral free trade agreements with several: the EU, China, the USA, India, South Korea and Japan.
Singapore’s competitive tax rate of 17% for corporations, as well as a supportive business environment, are other compelling reasons why many foreigners choose to incorporate companies there.
People looking for countries in which to register companies are also interested in how long it takes to file taxes there. In Singapore, it takes on average around 64 hours to complete.
In addition, startups can benefit from some tax exemptions in Singapore which make it a great place to start a business. For example, the Tax Exemption Scheme for New Startup Companies offers a 75% exemption on the first 100,000 SGD of taxable income. In addition, there’s a 50% exemption on the next 100,000 SGD of taxable income.
In Estonia, foreigners are able to register through the e-Residency program to access Estonia’s business environment and the large EU market.
Estonian e-Residency is also a gateway to establishing a limited liability company (OÜ) in Estonia, which can be done 100% online in as little as 2 hours (although it may take up to 5 working days).
Estonia’s advanced digital services also enable companies to be managed remotely from anywhere in the world. However, e-Residency does not provide any residency or citizenship rights.
Estonia also offers a highly competitive flat corporate tax rate of 22% for distributed profits. In fact, Estonia has been listed number 1 in the Tax Competitiveness Index for 11 years running. It’s also the only place in the EU that allows foreigners (non-EU citizens) to access the EU market without a visa or special permissions. In addition, it has double taxation agreements with 62 foreign governments.
Foreigners can quickly and easily establish companies in Singapore. Either a National Registration Identity Card (NRIC) or an Foreign Identification Number (FIN) is required for starting a business, and it’s common practice for a local service support provider to assist in the company registration process.
First a company name needs to be reserved, which can take several weeks. Thereafter you’ll need to file a company constitution or Memorandum and Articles of Association, followed by a company registration application.
Whether you want to register a sole proprietorship, a partnership, a local private limited company, a foreign company or a limited liability partnership - there are many third parties (local agent or filing representative) that can register your business for you in Singapore for a fee. This typically takes between 1 and 3 business working days to organize, and costs in the region of €209.53.
Once the company is registered you’ll need to register for your Singapore Corporate Access (CorpPass) account (a corporate digital identity used to access e-services online) and appoint a company secretary within 6 months and an auditor within 3 months (unless exempted).
There are different options for foreigners to open a private limited company in Singapore, one of which would require you to physically relocate to Singapore.
The option requiring relocation involves getting an EntrePass (scheme mostly for tech entrepreneurs with VC funding). If you don’t want to relocate, you are legally mandated to nominate a resident director or an authorised representative to manage the company.
While Singapore has special requirements to start a business there as a foreigner, Estonia allows foreigners (except Russian or Belarussian nationals) to open a company without any special requirement.
Registering a company in Estonia can be done fully online, and remotely - and can be processed in just a few hours. To run an Estonian business remotely, you’ll need to appoint a local contact person, which you can easily find through the e-Residency Marketplace.
Opening a business bank account in both Singapore and Estonia is quite straightforward and similar.
For Estonian e-Residents, either opt for a business account with a fintech company (e.g. Wise, Payhawk, or Intergiro), a business bank account with any bank in the European Economic Area (in case you already have an established relationship with one), or apply to open an Estonian bank account. If you opt for the last option, you will need to visit the bank in-person once pre-approval is granted to confirm your identity. Aso, you will need to show that your business has a strong connection to Estonia. This means that at least 50% of your clients, suppliers, assets or operations need to be in Estonia.
The process of opening a bank account in Singapore will vary depending on which Singaporean bank you choose. In general, you’ll need to provide several documents like a company resolution, constitution, proof of address of board members etc. You can submit the bank account application online and remotely for various types of business entities, but most banks will require that directors be physically present to have their identities verified.
Key things to know about:
Once you’ve registered a company in either Estonia or Singapore, you can start trading. The first year startup costs of running a business in Estonia start from €200. The annual costs in Singapore are much higher, starting from about €4000.
In both jurisdictions you can operate your company remotely (although there’s only 1 out of 3 options for doing that in Singapore).
Estonian e-residents receive a digital ID with which they can file VAT returns, sign contracts digitally and send documents with encryptions for security. In Singapore, there are a range of e-services available and a national, digital ID system called the Singpass, which is also used there for businesses to interact with government and private bodies.
State fee to register business
Time taken to register business
First year costs
Corporate Income Tax Rate
Stock transfer taxes
Digital ID card
Online set-up
Minimum share capital
E-services
Average time to file taxes per year
€265
2 hours (1-2 days if submitted on weekends or outside of business hours)
from €200
22
Nil
Yes
Yes
From €0.01
Yes. Estonia has streamlined its e-services for the remote management of businesses. E-residents are provided with a transnational digital identity, which allows 24/7 secure and safe use of Estonian public e-services.
50 hours
€209.53
1-3
business working days (and up to 2 months for a company name application)
from €4,000
17%
Stamp duty for transfer of shares 0.2% of the purchase price or the value of the shares (whichever is higher)
Yes
Yes
From SGD $1
Singapore offers a variety of e-services, which are considered user-friendly (e.g. My Tax Portal, e-Health services, Immigration and Checkpoints Authority).
64 hours
State fee to register business
€265
€209.53
Time taken to register business
2 hours (1-2 days if submitted on weekends or outside of business hours)
1-3
business working days (and up to 2 months for a company name application)
First year costs
from €200
from €4,000
Corporate Income Tax Rate
22
17%
Stock transfer taxes
Nil
Stamp duty for transfer of shares 0.2% of the purchase price or the value of the shares (whichever is higher)
Digital ID card
Yes
Yes
Online set-up
Yes
Yes
Minimum share capital
From €0.01
From SGD $1
E-services
Yes. Estonia has streamlined its e-services for the remote management of businesses. E-residents are provided with a transnational digital identity, which allows 24/7 secure and safe use of Estonian public e-services.
Singapore offers a variety of e-services, which are considered user-friendly (e.g. My Tax Portal, e-Health services, Immigration and Checkpoints Authority).
Average time to file taxes per year
50 hours
64 hours
There are advantages to running a business as a foreigner in both Estonia and Singapore, which are outlined in more detail below.
By comparison with Singapore, running a business in Estonia has the added advantage of giving you access to one of the largest markets in the world: the EU. In fact, Estonia, via its e-Residency program, is the only country within the EU that enables foreigners who are not EU citizens to register an EU business and thereby access the large EU market.
Both countries offer tax advantages and competitive corporate tax rates, with Estonia being ranked #1 in the OECD for tax competitiveness. Estonia is particularly well-known for having a simplified tax system, where it’s simple, quick and easy to file taxes online from anywhere.
And one of the biggest advantages of establishing a company in Estonia, compared with Singapore, is that you don’t need to physically reside or relocate there to be able to run your business from there. By contrast, in Singapore, two of the three avenues to start a company there as a foreigner involve you having to physically relocate. And the third option requires a local director to be appointed.
Singapore offers the ability to start a company as a foreigner, with a simple and quick application process, competitive tax rates, and a growing tech startup and accelerator community.
In addition, it’s quick and easy to register a company in Singapore, relatively inexpensive to incorporate and run a business there, and it’s known for being a place to easily conduct business without much red tape.
Singapore is also known for having a very efficient tax filing process, with it taking on average around 64 hours to submit your tax return there.
One of the major drawbacks when compared with Estonia, is that Singapore doesn’t offer access to a single large market like the EU, which can make it more complex to operate your business and sell products or services outside of Singapore.
When you become an Estonian e-resident, the process as a foreigner to register a company within the EU is simple, quick and inexpensive. While Singapore does offer access to some markets, it’s not a single unified market which isn’t as streamlined and simplified.
And when you register a business in Estonia, as an e-resident you don’t need to actually live in Estonia or relocate which is another advantage compared with Singapore. In Singapore, 2 of the 3 ways to register a company as a foreigner in Singapore require you to physically relocate there. And the third option requires a local agent or director.
When it comes to streamlined e-services, Estonia is also considered a world leader. You can file taxes online, conduct all banking online and there are a range of other e-services available. Estonia also has a vibrant startup community, and business-friendly regulations which makes doing business in Estonia very easy.
Estonia’s competitive tax rate, as well as its large number of double taxation agreements and the ease of filing tax returns, makes it a leader in terms of tax competitiveness. Plus, companies don’t pay any tax on profits that are reinvested into the company. And, as the e-Residency program is so well established, there’s a wealth of community resources and engagements that make Estonia a welcoming place to run a business from as a startup, entrepreneur or solopreneur.
This article was written by guest contributor and seasoned digital nomad Andy Stofferis (www.andysto.com).