Vietnam vs Singapore for Business: Costs, Tax and Setup Compared

Vinex Official

1 day ago

7 min read

When founders compare Vietnam vs Singapore for business, the honest answer is that the two countries do different jobs. Singapore offers a 17% headline corporate tax rate, a fast online registration and a strong base for holding, finance and regional management. Vietnam offers a large workforce at a much lower wage level, a growing domestic market and a 20% standard corporate tax rate, with lower rates for small companies. Many Singapore groups use both: a Singapore holding company that owns a Vietnam operating subsidiary.

This guide compares tax, setup time, setup cost, labour costs and cross-border rules, using official figures available as of November 2026.

Key Takeaways

Singapore taxes companies at 17%, with partial exemptions that lower the effective rate on the first S$200,000 of chargeable income.
Vietnam's standard corporate income tax (CIT) rate is 20%. Since 1 October 2025, smaller companies can qualify for 15% or 17%, but some subsidiaries are excluded.
A Singapore company can often be registered online within a day. A foreign-owned Vietnam company needs an Enterprise Registration Certificate (ERC) and, for its project, an Investment Registration Certificate (IRC).
Wage levels differ sharply, which is why many groups keep management in Singapore and put operations in Vietnam.

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Vietnam vs Singapore for Business: Key Differences

Here is the short version of the comparison. Each point is explained in the sections below.

Headline corporate tax: Vietnam 20% standard rate, with 15% or 17% for qualifying small companies; Singapore 17% flat rate, with partial and start-up exemptions.
Company registration: Vietnam ERC issued within 3 working days of receiving the file, plus an IRC for most foreign investors; Singapore registration on Bizfile, with most applications approved soon after payment.
Government registration fee: Vietnam varies by case; Singapore S$15 for the name application plus S$300 for registration.
Minimum wage: Vietnam statutory regional minimum wage, VND 5.31 million per month in Region I from 1 January 2026; Singapore no general minimum wage, but sector-based Progressive Wage Model (PWM) requirements.
Typical pay level: Vietnam average employee income around VND 10.1 million per month (first nine months of 2026); Singapore median gross monthly income of full-time residents S$5,775 (June 2025).
Tax treaty: Vietnam and Singapore have a double tax agreement in force since 1994.

Singapore skyline at dusk, home to many regional holding companies — Many groups keep a Singapore holding company and run operations through a Vietnam subsidiary. Source: Unsplash.

Corporate Tax: 17% in Singapore, 20% Standard in Vietnam

Singapore. IRAS taxes all companies, local or foreign, at a flat 17% of chargeable income. Most companies get a partial tax exemption: 75% of the first S$10,000 and 50% of the next S$190,000 of normal chargeable income are exempt. Qualifying new companies can instead claim the start-up tax exemption for their first three years of assessment. For Year of Assessment 2026, IRAS also grants a CIT rebate of 50% of tax payable, capped at S$40,000.

Vietnam. The Law on Corporate Income Tax No. 67/2025/QH15 took effect on 1 October 2025. The standard rate stays at 20%. Two lower rates now apply based on the previous year's total revenue:

15%: companies with annual revenue up to VND 3 billion.
17%: companies with annual revenue above VND 3 billion and up to VND 50 billion.

These reduced rates do not apply to every company. The law excludes certain subsidiaries and related-party companies, so a Vietnam subsidiary of a larger Singapore group should check eligibility before assuming 15% or 17%. Implementing details are in Decree 320/2025/ND-CP.

In practice, the rate gap is smaller than it looks. Vietnam also offers incentives for certain sectors and locations, while Singapore's exemptions mainly help smaller profits.

Setup: How Long It Takes and What It Costs

Singapore. You reserve a company name on Bizfile (S$15) and then register the company (S$300). ACRA says most registrations are approved soon after payment, while complex cases can take up to 15 working days. The company needs a Singapore registered address and at least one locally resident director. Foreigners without Singpass must use a registered filing agent.

Vietnam. A foreign investor usually deals with two certificates:

Enterprise Registration Certificate (ERC): creates the legal entity. Under Decree 168/2025/ND-CP, the provincial business registration office reviews the file and issues the ERC within 3 working days of receipt.
Investment Registration Certificate (IRC): approves the foreign investor's project.

Before 1 March 2026, foreign investors generally needed the IRC first. The Law on Investment 2025 (No. 143/2025/QH15), effective 1 March 2026, now allows a foreign investor to set up the company before the IRC, as long as it commits to meet market access conditions. Decree 96/2026/ND-CP guides this route and requires the company to obtain the IRC within 12 months. Read our guide to IRC vs ERC in Vietnam for the step-by-step process.

After licensing, a Vietnam company still needs a seal, a tax registration, a capital account and post-licence filings. Plan for several weeks in total, not days. The right structure also matters; see types of companies in Vietnam.

Labour Costs and Wage Rules

Labour is where the two countries differ most.

Vietnam has a statutory regional minimum wage. Under Decree 293/2025/ND-CP, from 1 January 2026 the monthly minimums are VND 5.31 million in Region I, VND 4.73 million in Region II, VND 4.14 million in Region III and VND 3.7 million in Region IV. Region I covers the main urban areas, including much of Hanoi and Ho Chi Minh City. Actual pay is higher than the minimum. Vietnam's National Statistics Office reports an average monthly income of VND 10.1 million for employees in the first nine months of 2026, and VND 9.2 million for all workers in Q3 2026.

Singapore has no general minimum wage. Instead, the Ministry of Manpower (MOM) applies the Progressive Wage Model in specific sectors and occupations, such as cleaning, security, retail and food services. MOM reports that the median gross monthly income of full-time employed residents was S$5,775 in June 2025, including employer CPF.

Note that the two figures are not like-for-like. Vietnam's is an average for all employees; Singapore's is a median for full-time residents. Even so, the gap is wide enough to shape where teams sit. Employer costs also include social insurance in Vietnam and CPF in Singapore. Our Vietnam payroll guide 2026 covers contributions and payroll steps.

Why Many Groups Use Both: Singapore Holding, Vietnam Subsidiary

The question "Singapore vs Vietnam for business" often has a third answer: use both. A common model looks like this:

Singapore holding company: owns shares, signs regional contracts, holds IP or treasury functions and raises capital.
Vietnam operating subsidiary: employs staff, runs production, software development or services, and sells into the Vietnam market.

This model keeps investor-facing activity in Singapore and puts cost-sensitive work in Vietnam. It also lets a group add other ASEAN subsidiaries under the same holding company later. For a broader view of entry options, see our guide to Vietnam market entry for Singapore companies.

The model only works if each company has real substance and the paperwork between them is in order. That brings us to cross-border rules.

Moving Money Between the Two: DTA, Transfer Pricing and Dividends

Double tax agreement. Singapore and Vietnam signed a double tax agreement in 1994. It has been amended by later protocols, and the Multilateral Instrument (MLI) has applied to it since 1 September 2023. To claim treaty benefits, a company generally needs a certificate of tax residence.

Transfer pricing. Charges between the Singapore parent and the Vietnam subsidiary, such as management fees, royalties, service fees and loans, must be at arm's length. Both tax authorities have transfer pricing rules and documentation requirements. Read our guide to transfer pricing in Vietnam for Singapore groups.

Dividends. A Vietnam subsidiary can send profits to its Singapore parent once its tax and reporting conditions are met. The steps, documents and timing are in our guide to profit repatriation in Vietnam.

Singapore Grants for Vietnam Expansion: MRA to EDGE

Many Singapore SMEs used the Market Readiness Assistance (MRA) grant to support overseas set-up costs. From 1 April 2026, MRA support for SMEs rose to up to 70% of eligible costs, capped at S$100,000 per company per new market.

However, Enterprise Singapore says MRA ceased on 29 September 2026. From 30 September 2026, new applications go to the EDGE Grant, which combines MRA, the Productivity Solutions Grant and the Enterprise Development Grant. MRA applications submitted before the cut-off continue to be assessed. If you plan a Vietnam project now, check the EDGE criteria on Enterprise Singapore's website before you commit costs.

How to Decide: A Simple Checklist

Ask these questions before choosing where to place each function:

Who are your customers? If they are in Vietnam, you will likely need a Vietnam entity.
Where are your people? Large teams usually cost less in Vietnam.
Where are your investors? Many investors prefer a Singapore holding company.
What licences do you need? Some business lines in Vietnam have market access conditions for foreign investors.
How will money flow? Plan service fees, loans and dividends before you start trading.

Frequently Asked Questions

Is Vietnam or Singapore better for a new business?

It depends on the function. Singapore suits holding, fundraising and regional management. Vietnam suits operations, larger teams and selling to Vietnamese customers.

What is the corporate tax rate in Vietnam compared with Singapore?

Vietnam's standard CIT rate is 20%, with 15% or 17% for qualifying small companies since 1 October 2025. Singapore's rate is 17%, with partial and start-up exemptions on lower profits.

Can a Singapore company own 100% of a Vietnam company?

In many business lines, yes. Some sectors have foreign ownership limits or other market access conditions, so check your business line before you apply.

How long does it take to set up a company in Vietnam?

The ERC is issued within 3 working days of a complete file. A foreign investor also needs an IRC for its project, and post-licence steps add more time, so plan for several weeks overall.

Is the Singapore MRA grant still available for Vietnam?

No. Enterprise Singapore says MRA ceased on 29 September 2026 and new applications now go to the EDGE Grant. Check EDGE eligibility before you start a project.

Our Services

Set Up Your Vietnam Subsidiary With VINEX

VINEX is based in Ho Chi Minh City and helps Singapore founders and groups set up and run companies in Vietnam. We handle company incorporation, IRC and ERC filings, bank account setup, secretarial work, accounting and tax compliance, so your Singapore team can focus on the business.

Contact VINEX for a free consultation on structuring your Singapore holding and Vietnam operating company.

This article is general information as of 13 November 2026, not legal or tax advice.