Singapore and Vietnam dominate Southeast Asian expansion discussions in 2025, yet the decision between them has become more complex than a simple cost comparison. Singapore projects 4% GDP growth whilst Vietnam targets 8.3-8.5%. However, growth figures tell only part of the story.
Major shifts now define market selection. BEPS Pillar Two implementation has neutralised the tax incentive competition that previously drove location choices. US reciprocal tariffs place Vietnam at 20% on most goods, changing the economics for export-focused manufacturers. Energy costs moved in opposite directions – Vietnam raised electricity prices 4.8% in May 2025 whilst Singapore reduced household tariffs 3.4% for Q1.
This comparison examines regulatory environments, tax structures, labour markets, infrastructure capabilities, and trade positioning. Each factor carries different weight depending on whether you need operational predictability or maximum growth exposure. We break down the practical differences that affect daily business operations and long-term strategic positioning.
Key Takeaways
- Singapore offers a highly predictable regulatory environment, ranked 2nd globally for ease of doing business, with fast incorporation and stable governance.
- Vietnam is modernising its regulatory system but still requires businesses to adapt to evolving rules and foreign ownership restrictions.
- Both Singapore and Vietnam have implemented the 15% global minimum tax (GMT) for large multinationals, neutralising traditional tax incentives.
- Vietnam offers low wages, making it ideal for labour-intensive manufacturing, but high social insurance contributions increase total employment costs.
- Singapore is ideal for regional headquarters, offering regulatory certainty, tax efficiency, and advanced infrastructure.
- Combining both markets – Singapore for strategic decision-making and Vietnam for cost-efficient production – maximises operational certainty and cost savings.
Regulatory Frameworks: Certainty vs Modernisation
Singapore’s Established Infrastructure
Singapore ranks 2nd globally for ease of doing business, a position reflecting decades of regulatory refinement. Company incorporation completes within 1–2 business days. The legal framework operates on English common law principles, creating immediate familiarity for international businesses.
The regulatory system anticipates business needs rather than reacting to them. Policy changes follow consultation periods. Implementation timelines provide adequate adjustment windows. Government agencies coordinate rather than contradict each other. This predictability reduces compliance surprises and allows accurate cost forecasting.
Political stability compounds these advantages. Singapore’s governance model prioritises economic continuity. Regulatory shifts occur incrementally, not dramatically. Businesses can plan 5–10 year strategies with confidence that the operating framework will remain recognisable.
Vietnam’s Progressive Development
Vietnam holds 70th place in the ease of doing business rankings, showing measurable improvement from previous years. Administrative reforms have enhanced tax transparency. Digital filing systems now handle many compliance requirements.
Foreign ownership restrictions persist in certain sectors. Commercial banks face a 30% foreign ownership cap, though this can reach 49% for institutions acquiring distressed assets. These limitations require structural planning that Singapore-based operations avoid.
The regulatory environment continues to modernise. Each reform cycle brings improvements. Generally speaking, companies entering Vietnam should budget time and resources for regulatory adaptation that more established markets don’t require.
Tax Structures: The BEPS Effect
Global Minimum Tax Changes the Calculation
The OECD’s BEPS Pillar Two implementation has neutralised traditional tax competition for large multinationals. Companies with €750 million or more in annual revenue now face a 15% global minimum tax. Singapore implemented these rules from January 1, 2025.
Vietnam introduced its Qualified Domestic Minimum Top-up Tax from January 1, 2024. Both nations now collect top-up taxes to reach 15% for qualifying MNEs.
Singapore’s Adapted Framework
Singapore maintains a 17% corporate tax rate for resident companies, with approximately 100 Double Taxation Avoidance Agreements providing cross-border efficiency.
The Refundable Investment Credit preserves competitiveness under GMT rules. This qualified credit returns portions of collected tax for R&D or sustainability initiatives, maintaining attractiveness within global standards.
Vietnam’s Transition Challenge
Vietnam’s standard corporate tax rate sits at 20%. The country historically offered 10–15 year preferential rates of 10% or 17% with four-year exemptions and nine-year 50% reductions for high-tech zones.
GMT implementation has effectively nullified these sub-15% incentives for large MNEs. Vietnam now develops non-tax support mechanisms (grants or infrastructure improvements) to maintain investment appeal.
Labour Markets: Cost vs Capability
Vietnam’s Cost Advantage
Vietnam offers clear wage advantages for volume operations. Monthly minimum wages range from VND 3.45 million to VND 4.96 million depending on region (approximately US$137–196). A further 7.2% increase takes effect in 2026, bringing Region I to roughly VND 5.3 million.
Average monthly income sits at US$317, making Vietnam attractive for labour-intensive manufacturing. Monthly operating costs for manufacturing average US$79,280, roughly one-fifth of Singapore’s equivalent.
Employers face mandatory social contributions totalling 21.5–22.5% of gross salary – the highest rate in Southeast Asia. This social insurance burden significantly impacts total employment costs beyond base wages.
Singapore’s Premium Market
Singapore commands substantially higher compensation. Median monthly income exceeds S$6,434 (approximately US$4,935). Manufacturing operations cost an average US$366,561 monthly – nearly five times Vietnam’s figure.
The productivity gap justifies this premium. Singapore’s GDP output per worker reaches US$111,382, ranking third globally. Vietnam’s productivity sits at US$7,151 per worker – a 15-fold difference requiring larger workforces for equivalent output.
Singapore ranks 3rd globally for English proficiency with a “Very High” score, whilst Vietnam holds 63rd place with “Moderate” proficiency. This language capability facilitates complex technical communication and seamless global team integration.
Infrastructure: Reliability vs Development
Singapore’s Operational Foundation
Singapore ranks 1st globally in the Logistics Performance Index, offering world-class port facilities and customs efficiency. The grid provides virtually zero downtime. Household electricity tariffs decreased to roughly 3.4% for Q1 2025, reflecting fuel cost adjustments with predictable pricing.
Average fixed broadband speeds reach 406 Mbps, ranking 1st globally. Complete 5G coverage supports advanced industrial applications including autonomous systems and smart manufacturing.
Vietnam’s Infrastructure Reality
Vietnam holds 50th place in the Logistics Performance Index, leading among developing ASEAN nations but facing port congestion and slower customs processes.
Power stability presents genuine operational risk. Severe heatwaves caused factory shutdowns for manufacturers including Foxconn and Samsung, generating estimated losses of $1.4 billion. Industrial north regions face localised shortages during May–July dry seasons when hydropower output drops.
Digital infrastructure has improved dramatically. Vietnam entered the global top 10 for fixed broadband speeds, with median speeds around 250 Mbps, supporting remote work and digital economy growth.
Where to Next With InCorp
The comparison reveals clear positioning. Singapore’s 2nd place ease of doing business ranking, 1st place logistics performance, and nearly 100 tax treaties create advantages that compound over time. The regulatory predictability alone eliminates operational surprises that derail multi-year planning.
Vietnam’s appeal centres on manufacturing economics and market access, particularly for companies managing infrastructure variability and compliance evolution. Most sophisticated regional strategies combine both markets – Singapore headquarters managing Vietnam production, capturing operational certainty for strategic decisions and cost efficiency for volume manufacturing.
InCorp’s teams operate in both jurisdictions. We handle incorporation, compliance, and operational setup across Singapore and Vietnam. Contact InCorp today to structure your regional presence.
FAQs about Singapore vs Vietnam
What are the tax differences between Singapore and Vietnam in 2025?
- Singapore maintains a 17% corporate tax rate with nearly 100 tax treaties, whilst Vietnam's standard rate sits at 20%. Both countries now enforce the 15% global minimum tax under BEPS Pillar Two for large multinationals, neutralising traditional tax holiday advantages Vietnam previously offered.
How long does company incorporation take in Singapore vs Vietnam?
- Singapore company registration completes within 1–2 business days through a streamlined digital process, contributing to its 2nd place global ranking for ease of doing business. Vietnam requires approximately 34 days and 10 distinct procedures, with conditional sectors potentially extending timelines to 14–60 days for ministerial approvals.
Can I operate in both Singapore and Vietnam simultaneously?
- Yes, many companies adopt a dual structure – Singapore headquarters managing Vietnam production facilities. This captures Singapore's regulatory certainty and extensive treaty network for strategic decisions while leveraging Vietnam's manufacturing cost advantages. The structure requires careful planning around transfer pricing, IP ownership, and operational control to optimise tax efficiency and compliance.
Incorporate your next venture with ease, wherever you choose!
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