Enterprises Flock to SG: Which Industries are More Suitable?

12月 22, 2023 elitestage No Comment

Multinational Corporations Settle in Singapore

In recent years, Singapore has been attracting numerous multinational corporations, with one-third of the Fortune Global 500 companies choosing to establish their Asian headquarters in the country. Many rapidly growing domestic startups are also making Singapore their first step towards globalization.

According to the latest “2023 China Outward Foreign Direct Investment Index Report” from the Economist Intelligence Unit (EIU), for Chinese investors, among the 80-plus countries and regions covered in the report, Singapore is the top choicein terms of recent attractiveness for investment.

Singapore, a New Starting Point. Why Singapore?

As an essential member of the ASEAN bloc and a key global hub for finance, services, trade, modern logistics, and intellectual property, Singapore serves as a strategic base for Chinese enterprises looking to expand into the ASEAN market and broaden their international business footprint under the Belt and Road Initiative.

Competitive Economic Landscape

Singapore boasts a resilient and stable economy, robust economic growth, high employment rates, and investor confidence. Globally leading industries such as biopharmaceuticals and advanced pharmaceuticals constitute Singapore’s diverse and dynamic economic landscape. The commitment to substantial investments in the digital economy and the Smart Nation initiative indicates that investing in Singapore holds limitless business opportunities.

Pro-Business and Stable Operating Environment

As a global business hub, Singapore has long been the gateway for enterprises into Southeast Asia. Whether large multinational corporations or rapidly growing startups, Singapore is the preferred choice for regional headquarters. Recognized as a global innovation center, Singapore is home to nearly half of Southeast Asia’s unicorns and consistently ranks among the world’s most innovative cities. Transparent and efficient business systems, strong government support, vibrant startup ecosystems, competitive tax systems, and a leading global intellectual property protection framework contribute to an environment conducive to rapid business growth.

Top-tier Talent for the Future

Singapore has long held one of the world’s most competitive workforces, characterized by high educational attainment and technical proficiency. The bilingual education policy ensures fluency in English and proficiency in at least one other language. To facilitate the influx of international talent, Singapore provides various visas tailored to different skill sets. The country is committed to empowering its talent through continuous training, ensuring they can adapt to rapidly changing business demands and technological advancements.

21st Century Infrastructure

With cutting-edge digital infrastructure,a world-class transportation system, stable water supply, and reliable electricity, Singapore ensures businesses operate in the most efficient environment.

Global Connectivity Hub

Strategically located at the crossroads of major trade, shipping, and aviation routes, Singapore is one of the world’s most connected nations. Changi International Airport serves over 100 countries and regions, while the Port of Singapore is renowned as one of the busiest seaports. Situated in the strategic position of Southeast Asia, Singapore is the ideal choice for accessing rapidly growing consumer markets in the region. Singapore has signed 25 free trade agreements, facilitating free and convenient trade with major global economies. With the Regional Comprehensive Economic Partnership (RCEP) in effect, Singapore’s trade cooperation with signatory countries will expand and deepen, creating more opportunities and strengthening economic ties and connectivity within the region.

Ideal Living and Working Environment

A long history of low crime rates, a transparent judicial system, and reliable law enforcement supported by an engaged citizenry have earned Singapore a reputation as one of the safest countries globally.

Industries Worthy of Attention for Businesses Expanding to Singapore

Cross-Border E-Commerce Sector

The e-commerce industry is the most vibrant sector in Singapore. In 2021, the e-commerce market in Singapore reached$5.9 billion, and it is projected to grow to$10.7 billionby 2025. With a high internet penetration rate and significant online shopping habits, Singapore has established itself as the most mature e-commerce market in Southeast Asia.The presence ofinternational e-commerce giantsis strong due to factors such as high internet and social media penetration, robust economic strength, well-developed infrastructure, and an affluent population. The strategic geographic location of Singapore attracts numerous domestic enterprises to establish subsidiaries, using it as a springboard to expand into the global market.

Digital Technology Industry

Singapore positions the development of the next-generation digital industry as the engine for future economic growth. Over the past decade, China’s digital technology industry has seen remarkable breakthroughs globally in areas such as artificial intelligence, big data, aerospace, and biotechnology. Unlike earlier enterprises that followed traditional paths, modern Chinese companies in high-tech, new energy, photovoltaics, intelligent manufacturing, and related industries may embark on global expansion from the outset. Many companies consider Singapore, representing Southeast Asia, as their initial market, rather than prioritizing expansion into Latin America or Africa.

The Singapore government actively encourages Chinese digital technology companies, having made a commitment of SGD 500 million in March 2019 to support the development of digital technologies, including artificial intelligence, supercomputing, and robotics. Leveraging respective strengths in the digital technology field, China and Singapore can collaborate for mutual benefit, creating a brighter future for the industry.

Pharmaceutical Industry

In the past couple of years, influenced by global pandemics, international politics, and economic conditions, Chinese pharmaceutical companies have turned their focus to Southeast Asia, with Singapore beinga crucial destination under the “Asian Market” segment. In 2022, Chinese pharmaceutical companies made frequent acquisitions and established manufacturing plants in Singapore.For instance, Kingsley Biotech’s production and research base in Singapore officially commenced operations in February, and Fosun Pharma acquired OncoCare, the largest private specialized oncology medical center in Singapore, in June. In July, both WuXi AppTec and WuXi Biologics announced plans to invest SGD 2 billion over the next decade to build new research and production bases in Singapore.Singapore, with its high overall education level, has a considerable pool of talents in the pharmaceutical sector. As of 2020, the biopharmaceutical industry in Singapore employed over 25,000 people, ranking second globally in talent competitiveness. Singapore’s commitment to skill enhancement through programs like the SkillsFuture initiative and collaboration between industry and education institutions further strengthens its position in nurturing future talent for the pharmaceutical sector. This becomes a significant advantage for pharmaceutical companies establishing core teams in Singapore.

Preparations for Establishing a Business in Singapore: Key Considerations

Entering the business landscape in Singapore requires careful preparation, as the commercial environment and management systems differ from those in domestic markets. Here are essential considerations for entrepreneurs looking to register a company in Singapore:

Determine Registered Capital: Entrepreneurs must decide on the amount of registered capital when registering a company in Singapore. As Singapore primarily features private limited companies and does not impose a minimum capital requirement or require full capital to be in place before operations, this process is relatively straightforward. The main decision involves selecting a company name, subject to approval, and choosing two primary business activities during registration.Business Scope: Unlike certain restrictions in China, most industries in Singapore can operate as private limited companies, subject to approval. Entrepreneurs often choose two primary business scopes during company registration.Bank Account Opening: After company registration, attention shifts to opening a bank account. Singapore offers both local and foreign banks, with some allowing remote account opening for foreign enterprises. Choosing a bank that aligns with business needs is crucial.

Taxation Considerations: Singapore’s tax system is straightforward, featuring a single tax type—corporate income tax. Currently set at 17%, Singapore’s corporate income tax is the lowest in Asia, second only to Hong Kong’s 16.5%. Additionally, businesses that meet certain criteria, such as setting up headquarters or establishing a research or technology team in Singapore, can apply for tax incentives, potentially reducing the corporate income tax rate to 10% or even 5%. For international trade-focused companies, Singapore’s numerous free trade agreements can significantly reduce tariffs or value-added tax.

Local Director Requirement: Establishing a company in Singapore requires having a local director, such as a Singapore citizen, permanent resident, or an employee with a valid employment pass. If unavailable, various service providers offer temporary local director services to help businesses find a suitable local director upon landing in Singapore.

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