One of the wealthiest countries in the world, Singapore is consistently a draw for businesses from all over, thanks in part to its pro-enterprise government policies, investments in innovation, highly skilled labor force, and political and economic stability. If you’re launching a company or opening an outpost here, choosing the right bank can facilitate the process and give you a competitive edge.
Situated off the southern tip of the Malay Peninsula, Singapore is one of the busiest ports globally, acting as a gateway into Asia – which is just one of the reasons why companies continually choose to set up their regional treasuries, procurement centers or international headquarters here. Ranked the most open economy in the world (Index of Economic Freedom 2024), it’s also known as a ‘pro-business environment’, with corporate advantages that include an investment allowance, an enterprise development grant for business improvement and a vast number of tax equivalence agreements.
Historically, key industry sectors have included wholesale trade, currently contributing 22.3% of the GDP; manufacturing (18.6% of GDP), particularly in electronics and semiconductors; and financial and professional services (19.5% of GDP). The global pandemic was a pivotal moment for Singapore. While many parts of North Asia remained locked down for an extended period, Singapore remained open for the flow of goods globally, cementing itself as an efficient and reliable transshipment hub.
Additionally, the ebbs and flows of geopolitics can see certain jurisdictions fall in and out of favor, but with its established infrastructure and supportive regulatory framework, Singapore remains a consistent global business hubs.
Emphasis on innovation
In recent years, Singapore’s economic growth has spread beyond its original main sectors. With the government’s investments in AI and cybersecurity, and a commitment to building a strong digital infrastructure and digital-ready workforce, tech startups are on the rise. The small nation, about one-fifth the size of Rhode Island, has one of the fastest-growing start-up communities in the world, with more than 4,000 to date, and its intellectual property legal framework is considered one of the most comprehensive and effective in safeguarding patents and trademarks.
What’s more, 80 of the world’s top 100 technology firms now have a sizeable presence here, and Singapore’s digital economy comprised 17.3% of GDP in 2022, up from 13% in 2017. It’s also home to more than 1,500 FinTechs and is a hub for cross-border ecommerce giants.
Biotech and biomedical companies have their own economic zone too, for research and development. The biotech park, called Biopolis, helps companies not only incubate but also expand because potential partners, buyers and supplies are all within this one ecosystem.
The human capital landscape
Singapore’s population is generally viewed as cosmopolitan, well-educated and inclusive. Interestingly, there’s at least one national holiday for practically every major religion, which goes a long way in making everyone feel welcome, locals say. Companies have access to a highly skilled and extensively trained workforce of locals and international individuals. But while the talent pool is deep, it’s also nearly fully employed right now, which means substantial competition for hires and rising salaries. Attracting and retaining employees can be a challenge in any country but it’s especially pronounced in a small one like Singapore, with a population of just over 6 million. That said, to overcome this constraint, Singapore is consistently upskilling its workforce through government subsidies and using robotics and automation to enhance productivity.
Positioned for future success
With the growing importance of sustainable business practices in driving long-term growth, Singapore’s dedication to a green economy is another boon. The government has a Green Plan and has made a public announcement stating it wants to be a market leader in driving the green agenda. From a business standpoint, this includes exploring renewable energies to potentially adopt as well as enhancing the country’s position as a carbon trading hub.
It’s a forward-thinking approach with precedence. Singapore has been a leader in pioneering water recycling on a national scale, converting wastewater to drinking water. It introduced the world’s first Green Bond Grant Scheme to promote green financing (an initiative that helps the company issue green bonds by defraying the cost of external review and certification). Staying focused on the future and supportive of industry advancements is what makes Singapore a desirable spot for corporates looking to launch or expand their operations in Asia.
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