“Which country is the best to start a business?”, is a question often asked by up and coming entrepreneurs and business leaders who are seeking to expand. Among other things, paperwork and legal implications often emerge as the most complicated factors that will influence such decisions.

In a recent report commissioned by TMF Group, Singapore came out on top as one of the simplest jurisdictions in terms of human resources and payroll in Asia Pacific (APAC). This simplicity becomes even more apparent when comparing Singapore with economies such as China and India, which were found to be among the most complex globally.

The report ‘HR & Payroll: Navigating complex requirements in turbulent times’ ranks 77 jurisdictions by the complexity of HR and payroll, exploring the theme of employer and employee relations across key characteristics such as hiring and termination of employees, ongoing management of HR and payroll, etc.

Only ever so slightly being beaten out by New Zealand, Singapore has been found to be one of APAC’s least complex markets and is tied on the same ranking as Thailand. By contrast, Malaysia, China, India and Indonesia were seen as the most complex for multinational companies when it comes to HR and payroll practices and legislations.

For businesses, such complexity ultimately comes down to the jurisdictions approach to the relationship between employer, employee, and the government. The Covid-19 pandemic has thrown a wrench into the usual relationship by adding another complexity to debate, as governments have responded in their own unique ways to the needs of workers throughout the crisis.

Some of these jurisdictions have committed to short-term changes to their benefits rules in order to help protect employees from the economic shock that results from extended lockdown. Singapore, as an example, has distributed payouts to more than 140,000 employers as a part of their Jobs Support Scheme to subsidise wages.

While employment and payroll guidelines are fairly transparent in Singapore, the Central Provident Fund (CPF) Board regularly updates and provides clarification around CPF treatments.

At the other end of the spectrum, Singapore’s neighbour, Malaysia, finds itself as the most complex markets in terms of HR and payroll in APAC, beating out even China and India, according to the report. Malaysia’s complexity is primarily attributable to the large number of Public Rulings under the Malaysia Inland Revenue Board, adding a layer of complexity around guidance and interpretation of tax laws in respect of salaries, benefits in kind and their tax deductibility.


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