The city of Singapore is an emerging beacon for ambitious British technology companies, which are attracted to its “Smart Nation” vision, welcoming business environment and connection to the region’s dynamic emerging markets.
While Silicon Valley may justifiably be hailed as the tech capital of the world, ranked first in the respected Compass Global Start-up Ecosystem Ranking 2015, Singapore has leapt seven places in the latest ranking to tenth, making it the highest-ranking Asian country and the only ASEAN (Association of Southeast Asian Nations) member to make the top 20.
In comparison to its neighbours, Singapore has the highest number of startups, attracts the largest volume of Series A funding and receives steadily increasing foreign direct investment (totalling $67.5bn in 2014, with the UK its third-largest investor).
A shelter from stormy seas
The scale of China’s recent economic troubles have certainly raised concerns among foreign investors, since the stock market has lost more than 40 per cent since peaking in June, a bigger drop than the dot.com bust. Many foresee a repeat of the Asian financial crisis of 1997-98. However, most see China’s latest dip simply as a much needed correction rather than a crisis. For Singapore, while its economy is heavily influenced by fluctuations in China’s as well as the world’s other large economies, its careful handling of economic policy gives the “Little Red Dot” (as it’s affectionately known by its citizens) great resilience despite its size.
Certainly, with the result of September’s elections a near certainty, the government’s ability to implement policies for the longer term offers a huge advantage. In June, the Monetary Authority of Singapore announced that it will commit S$225m (£112.5m) over the next five years under the “Financial Sector and Technology Innovation” scheme to provide support for the creation of a vibrant ecosystem for tech innovation.
Furthermore, under its Infocomm Media Masterplan, Singapore has ambitious plans to turn the city state into “a living lab to entrepreneurs, growth companies and multinationals in the infocomm media space where they continually experiment and innovate to contribute to sustainable and quality economic growth” within the next decade.
Given this context, it is hardly surprising that during his recent visit to the region UK prime minister David Cameron urged ambitious British companies to explore south-east Asia’s “vast and dynamic market”. During this one-week trade mission, during which £750m in deals were expected to be brokered, the prime minster said the ASEAN region could represent trade worth £3bn to the British economy.
Read more about Singapore:
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- Boris Johnson lauds fintech sector as he heads trade delegation to Asia
- How to do business in Singapore
Location, location, location
Our Singapore office support ambitious, high-growth British businesses in expansions into Asia, many choosing Singapore as their corporate foothold, and a gateway to the emerging markets of Southeast Asia, which has a combined GDP of £1.2tn and predicted to be the fourth largest single market by 2030.
In recent years, we have worked with UK Trade & Investment (UKTI), and Singapore’s Infocomm Development Authority and Economic Development Board to smooth the transition for British companies to the region. We created TechConnection in 2013, a trade forum bringing together tech businesses from Singapore and the UK to sample market opportunities and meet investors and government agencies from each location. This initiative has been made possible by the world class innovation environments in which each of our offices is located: Singapore, London and Cambridge.
Look before you Leap
However, entering even a business-friendly environment such as Singapore can be risky if not properly planned and executed. Finding the right team is obviously essential, and although salary costs are relatively high, Singapore has an exceptionally well educated and skilled workforce, complemented with an influx of expatriates bringing additional international experience into the mix.
Failing to consider the myriad legal as well as operational elements involved – such as business structure, local and regional regulations (for example licence requirements and data protection rules), immigration policies, brand protection and intellectual property registration, and access to government grants and incentives – can expose companies to inflated legal and commercial risks and unnecessary additional costs later on.
Other potential hazards include failure to perform adequate due diligence on strategic or joint venture partners, agents, or distributors in local markets, and failure to ensure standard legal terms are tailored for each market, from both a legal and market practice perspective.
Singapore’s open for business. And for those who take a well planned approach, the opportunities are significant.
Henry Goodwin is a Singapore-based partner at international law firm Taylor Vinters.