A stable and business-friendly political climate in the perfect location to explore the fantastic opportunities offered by numerous south-east Asian markets, Singapore is perhaps the ultimate gateway for companies looking to trade internationally.
“If you step back and look at Singapore from a historical perspective, its importance came from being a strategic location for the old east-west trade routes,” explains Timothy Braun, partner at Grant Thornton in Singapore. “It is not much different today, as the success of Singapore in recent times has largely been driven by its strategic geographical location which has prospered under some very exceptional leaders who have focused on long-term vision for the country rather than short-term tactics.”
This approach has helped to create an ideal location in which to set up businesses. Considerable political and economic stability particularly helps set Singapore apart in the south-east Asia region, Braun says.
“It has greatly reduced corruption among politicians, partly by making politics one of the most important professions here,” he explains. “And of course, Singapore is ideally situated: within a seven-hour flight you can be in practically any northern, western or southern Asian country, and within three hours you can be in virtually any south-east Asian country. It is also served by what passengers consistently say is the number one airport in the world, along with a world class port.”
Many businesses use Singapore to gain a foothold in the region before entering markets such as Malaysia or Indonesia. “South-east Asia has a significant level of high-growth opportunities and is still quite under-developed in terms of its potential,” Braun says.
Some businesses may choose to set up regional headquarters in Singapore while sitting production plants in neighbouring countries such as Vietnam or even China. Earlier this year, for example, domestic appliance maker Dyson moved its global HQ from the UK to the city-state – although the company has carried out a significant proportion of its manufacturing operations in neighbouring Malaysia since 2002.
“You could set up almost anywhere in South-east Asia, but the economic and political policies are in a constant state of flux and much less stable compared to Singapore,” Braun points out. “In addition, Singapore is one of the world’s top locations in terms of intellectual property protection, which is conducive for businesses setting up headquarters here”.
“Singapore has a very fair tax regime and it is relatively easy to trade across borders as there are double-taxation treaties with more than 70 countries. It also incentivises growth and enables businesses to attract and retain the right talent. It has a very skilled workforce with a highly attractive blend of both local and foreign talent.” Singapore can boast two of the world’s top 25 universities as well as being highly regarded internationally for its rates of achievement at both the primary and secondary school level.
“This pool of talent allows local businesses to flourish, but also helps to attract skilled foreign talent to call Singapore home. On top of that, it’s a very safe city, with low crime and some of the highest levels of life expectancy in the world.”
Singapore has a very strong start-up ecosystem, with considerable help available from the government-run Economic Development Board (EDB). “There is a high level of technological readiness here, so Singapore is seeing a lot of investment in the Fintech space as well as in areas such as artificial intelligence and robotic processes,” Braun explains. Many leading global technology companies – from Google and Microsoft to Hewlett-Packard – have regional headquarters in Singapore.
“It is also one of the largest financial hubs on the planet: it can handle some of the most complex projects, for example interest rate hedging for the foreign exchange market. More recently, the city is being promoted as a centre for debt restructuring, thanks to the workforce expertise and the clear legal framework.”
Braun has recently worked with a major logistics business to locate its regional base in Singapore: “For most of the businesses we work with, their customer’s key decision makers from a sales perspective are based in Singapore. These businesses have also been able to take advantage of how attractive the city is for ex-pats: fairly robust immigration laws yet having a transparent visa process making it conducive to bringing in foreign talent.”
Manufacturing operations still exist in Singapore itself, but the growth is limited by the city’s size and labour force. Braun says that any businesses considering relocating to Singapore should get in touch with the EDB. “They are a very open and pragmatic organisation, and they are proactively working to attract business development in Singapore. It’s certainly far easier to get government cooperation or even a seat at the table here than elsewhere in the region.”
With that support, and the strength and depth of the existing business networks in Singapore, it’s difficult to imagine a more stable and strategically positioned gateway city for South East Asia.
To discuss your business expansion in the region, contact Tim.