Many of the world’s biggest international brands have chosen to locate their regional headquarters in Singapore thanks to the ease of doing business in the city state.
| The reasons why Singapore is regarded as a choice location for business are plenty – world-class infrastructure, political stability, transparency, a reliable legal, regulatory and corruption-free environment, and a pro-business government including a low corporate tax structure just to name a few. The Singapore government, spearheaded by statutory boards like the Economic Development Board (EDB) and International Enterprise Singapore (IE Singapore), also actively solicit multinational corporations (MNCs) to set up shop in the country.
According to a World Bank report entitled ‘Doing Business 2011: Making a Difference for Entrepreneurs’, Singapore
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was the world’s top-ranked economy for five years running, with regard to the ease of doing business. It was also ranked the third most competitive country in the world behind Switzerland and the United States of America in The Global Competitiveness Index 2009–2010.
STARTING UP
Anyone 18 years old and above can register a business and almost all transactions can be conveniently carried out through the various government websites. Business registration starts from just S$65 for a Sole Proprietorship. The government has adopted a pro-entrepreneurship stance in recent years so there are various grants and incentives for start-ups available. The government is well regarded for its efforts to reduce the cost outlay involved in setting up and maintaining a business. Singapore has double tax agreements with more than 60 countries, as well as a number of notable Free Trade Agreements (FTAs), which facilitate special trading relationships and concessions with partner countries. These include FTAs with the United States, Japan, Korea, Australia, New Zealand, India and Jordan. Singapore also attracts a lot of foreign investment thanks to its 17 percent corporate tax rate, which is known to be one of the lowest in Asia.
| A QUALITY WORKFORCE
Singapore boasts a high quality workforce that is known to be adaptable, competitive and one of the most literate in the world – resulting from an English-based, rigorous education system combined with an emphasis on broad-based learning, business-relevant courses and life skills. Furthermore, the government actively encourages and invests in continued education to ensure that its workforce is equipped with up to date skills.
Another crucial factor for which the government needs to be lauded is its pro-expatriate stance. Foreign professionals with desirable skill sets are welcomed with open arms. This approach to recruitment, along with a relatively low level of taxation, high standard of living and low crime rate have helped the country attract the best talent. In fact, about half of Singapore’s population comprise foreigners. This approach of recruiting
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the best talent from around the world, coupled with an emphasis of work excellence amongst Singaporeans, has helped ensure that the country has a world-class labour force with few comparisons.
KEY ECONOMIC SECTORS
Banking & Finance: One of the most established capital markets in Asia, the banking and finance sector comprises more than 10 percent of Singapore’s GDP. The industry boasts many of the world’s well known financial brand names such as Citibank, Barclays and Credit Suisse that have set up operations in Singapore. The country has also positioned itself as a premier centre for wealth and fund management, naturally attracting a good proportion of high net worth individuals to park their wealth here.
Manufacturing & Electronics: A key pillar of Singapore’s economy, the manufacturing sector accounts for about half of the country’s total industrial output. It supports other industries such as precision component manufacturing, research & development and logistics. Many of the electronic parts that go into consumer gadgets such as mobile phones and computers are manufactured in Singapore. The likes of major brand names such as Hewlett-Packard, Kodak, Toshiba and Dell have all established strategic operations in Singapore – either for their regional headquarters, R&D facilities, distribution or manufacturing centre.
| Energy & Chemicals: As the third largest oil trading centre in the world, Singapore refines about 13 million barrels of oil a day. To address growing concerns of climate change, the country has also begun focusing on alternative energy sources such as liquefied natural gas, bio-fuels and solar power. A major contribution to the Singapore economy, the energy industry is expected to generate S$34 billion by 2015.
Healthcare: The standard of Singapore’s medical practice is on par with the best in the world, with many pharmaceutical and medical technology companies establishing operations here. The country attracts more than 650,000 foreign patients and generates over US$1 billion in revenue each year.
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Biomedical: Singapore is currently home to 40 global biomedical companies like GlaxoSmithKline, Medtronic and Lonza while over 50 biomedical sciences manufacturing plants are located here. The city state is today one of Asia’s fastestgrowing biotechnology centres, and this sector looks set to hit its target of S$25 billion by 2015.
Marine: The bedrock of Singapore’s success was built upon the maritime trade. Two centuries ago, Sir Stamford Raffles envisioned Singapore’s potential as a strategic port, and that vision has been realised as the city boasts one of the busiest ports in the world today. It is also the largest manufacturer of jack-up rigs, with a 70 percent global market share.
| Information Technology: One of the key factors contributing to Singapore’s success as a business hub in the region is its advanced IT infrastructure. According to the Global Information Technology Report 2009-2010, Singapore was ranked the second most networked country in the world. Government initiatives such as the Intelligent Nation 2015 Masterplan are expected to buttress Singapore’s leadership in this area.
Aerospace: Singapore’s dominance in the marine industry is well-matched by its standing as a regional aviation hub. There are about 100 aerospace companies in Singapore, offering a range of services: airframe maintenance, engine overhaul, aircraft modifications and conversion, aerospace design and engine parts manufacturing. The country
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hosts the biennial Singapore Airshow, which is the biggest aerospace and defence exhibition in Asia, and one of the world’s top three.
Education: Singapore’s education system carries tremendous international credibility. Thanks to its cosmopolitan flavour, the city is a choice location for international students, with more than 90,000 of them from 120 different countries studying here.
Water: By 2015, Singapore’s water sector is projected to contribute around S$1.7 billion to the country’s GDP and employ more than 10,000 people. The government is already a pioneer in several respects. Its method of waste water reclamation, for instance, is being studied and applied in overseas markets. One Singaporean company in particular – Hyflux – has been making the headlines and has been contracted to build one of the world’s largest water desalination plants in Algeria.
Tourism: A key economic pillar, the tourism industry chalked up receipts of S$18.8 billion in 2010 – the highest in 10 years. This is in line with the government’s ambitious plans under its Tourism 2015 initiative, which aims to draw 17 million tourists annually and contribute S$30 billion to the economy. The allure of Singapore is apparent – cultural diversity, an Englishspeaking population, shopping galore, a delicious spread of good food, and entertainment options all make this city a must-visit destination.
ENTREPRENEURSHIP
Relative to the rest of the world, entrepreneurship in Singapore is a much less travelled path. However, in recent years the government has launched a number of initiatives to encourage greater entrepreneurship amongst Singaporeans. Here is a brief look at some notable entrepreneurs who have carved a niche for themselves using Singapore as a powerful base to do business.
| Kenny Yap
Executive Chairman of Qian Hu Corporation, Kenny Yap was 14 years old when the Singapore government decided to exile “dirty” industries and close his father’s pig farm. But they say necessity is the mother of invention so Yap’s father replaced the pig pens with fish ponds and began raising guppies. Under Yap’s charge, the small, agrarian business was transformed into a public-listed company within a short span of just nine years. Qian Hu boasts more than 4% of the global market for ornamental tropical fish, with distribution networks in Malaysia, Thailand, Indonesia and China, and exports to more than 60 countries worldwide.
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| Henn Tan
Henn (Henry) Tan, is the Chairman, Chief Executive Officer and Executive Director of Trek 2000 International, the company that invented the USB flash drive or ‘thumb drive’. The flash memory data storage device has since revolutionised the way people store and transfer computer data. Tan came from a poor family and overcame a troubled adolescent phase to become the successful entrepreneur he is today. In 1995, he bought over Trek, a small family-owned electronic parts trading business for S$1 million. He restructured the company and with the invention of the USB flash drive, Trek 2000 rocketed to success. Today, the company’s revenue exceeds S$60 million, boasting a portfolio comprising 161 patents and offices in the United States, Malaysia, Thailand, India, Hong Kong, Netherlands, China, the Philippines, Vietnam and Japan.
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| Douglas Foo
In 1996, Douglas Foo set up Apex-Pal International with a Japanese partner to enter the garment trade. Soon after his first flush of success, Foo began searching for a different business opportunity in which he would have first-mover advantage and a competitive edge. He discovered that there was a niche for a kaiten (conveyor belt) sushi chain serving Japanese food at affordable, mass market prices and steered Apex-Pal in this direction. His Japanese partner did not agree with the change and withdrew his shareholding, leaving Foo to source for funds for the fledgling business. In the ensuing months, Foo faced the uphill task of raising funds to buy out his partner’s share and set up the sushi business. In 1997, the first Sakae Sushi outlet opened at the OUB Centre in Raffles Place in the midst of the Asian Financial Crisis. Despite the weak economic situation, the business took off. Today, Sakae Sushi is one of Singapore’s fastest-growing F&B chains, having garnered numerous business awards. The successful concept has also been exported to countries like Malaysia, Indonesia, Thailand, the Philippines and China.
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| Christopher Long and Alvin Lye
A local company that has made its mark in the international watchmaking industry, Azimuth is the first and only Singaporean luxury watch brand to create Swiss-made high end complication watches. The company manages the entire mechanical timepiece production from research and development of its inventive concept designs to the manufacturing process in Switzerland, as well as the retailing, distribution and delivery worldwide – all from its base in Singapore. The brainchild of local mechanical watch enthusiasts Christopher Long and Alvin Lye, Azimuth was established in 2003 and its fast success is nothing short of phenomenal. The brand is already known in Europe, North, South and Central Americas, Middle East and Asia, and has won much praise from watch connoisseurs around the world despite its short existence.
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| Thomas Fernandez
It was his desire to elevate the professionalism of the pest control business that motivated Thomas Fernandez to spend US$5,000 on a trip to Toronto in 1983 to attend a national pest control convention. He was working at his brothers’ pest control firm then. The convention was an eye-opener and Fernandez got to know an experienced pest control expert, Ken Doty, who soon became his mentor. Fernandez then continued to upgrade his knowledge and skills through various pest management courses in the United States. In 1991, he set up PestBusters with S$250,000 and soon carved out a niche for his pest management firm targeting the hotel and hospitality sectors. From an initial staff strength of just 10, PestBusters now has 200 employees in Singapore, Malaysia, Indonesia, Thailand, the Philippines, Cambodia and Vietnam.
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| Abid H. Mir
Pakistan-born Abid H. Mir’s story is a fascinating rags-toriches tale that began with Mir’s wealthy carpet merchant father abandoning his pregnant mother. Growing up in poverty, Mir overcame much hardship to start his own carpet venture at just 14 years old with money borrowed from an uncle. With four generations of his family in the carpet trade, success was predestined. In 1978, Mir established a warehouse on Bond Street in London that supplied carpets to all of Southeast Asia. Then in 1981, he moved to Singapore and subsequently registered Kashmir Carpet House, the parent company of Lotto Carpets Gallery that deals in traditional hand made oriental carpets and contemporary master weaves, as well as Antique Treasures, another company which deals in 16th to 19th century antiques. Today, Mir is semi retired and is as well known for his philanthropy as he is for his success in business. Mir’s personal altruistic philosophies have been adopted by Lotto Carpets, with fund-raising activities implemented in partnership with various charities such as the United Nations Development Fund for Women (UNIFEM) and Down Syndrome Association (Singapore).
Driven by innovative, visionary leaders, Singapore’s robust economy certainly owes much to its people assets, both local and foreign.
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