While competition is at an all-time high for companies wanting a foothold in Southeast Asia, foreign businesses continue to choose Singapore over other locations. There are obvious reasons for this, such as a relatively stable economy, strategic location and supportive government policies that support everything from startups to MNCs.
It is impossible to ignore the reality that foreign businesses continue to choose Singapore because of its perceived status as a regional trade and commerce hub. However, this is also probably overstated. Given the challenging operating conditions in places like Thailand, Vietnam and the like, most firms aren’t able to swiftly expand their reach despite a presence here.
On the other hand, one very real benefit of Singapore is the stable and business-friendly environment that most foreign companies will prefer to operate in. The country has a well-developed legal system, transparent regulations and a low corruption rate.
Meanwhile, a supportive government offering various incentives and grants to foreign companies can make it easier for them to set up and operate in Singapore when compared to other countries in Southeast Asia. A range of services to assist businesses with their expansion plans and to help them navigate the local market are available in the country.
That being said, the local market is quite small and competition can be fierce. Unless a product or service is truly disruptive or filling a real gap in the market, an uphill struggle awaits.
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Should foreign businesses choose Singapore?
Foreign businesses continue to choose Singapore, but should they? Its strategic location, stable business environment, skilled workforce and supportive government policies make the country a solid choice for overseas firms looking to establish a presence in the region.
However, growing out of Singapore is something many companies struggle with. While they may be a short flight away, expanding to Indonesia, Thailand, Cambodia or wherever else is by no means a slam dunk.
Recently, you have seen more international businesses focus on the market they believe will be most successful first as opposed to incorporating in Singapore and working outward. That’s because the presence there adds little to operations or reaching strategic goals.
At the end of the day, foreign businesses should choose Singapore if they have a reason to be there. If not, you’re better off starting in the country or countries that will be most profitable.
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