Small tips that will help doing business in Singapore
A city of merchants
Strategically located at the Southern tip of the Malysian Peninsula, Singapore always saw the merchant ships passing on their way between Asia and Europe.
The British did develop the activity of the port. The influx of Chinese and Indian migrants did enhance the international trade.
Industry developed in the 70s. It has mainly supported by the Oil & Gas, the electronics and white products sectors.
Today, white products and a large part of the electronics manufacturing have been displaced to countries with cheaper operating costs.
The Oil sector remains important, Singapore being one of world the biggest centre for refining. Maintenance & Repair of oil rigs is also an active business.
The aeronautical sector has grown considerably making of the City—State one of the main world hub for aircraft MRO and spare parts logistics.
75 % of the economy is devoted to services, finances, and logistics. The rest is linked to industry. There are no more primary sector activities such as farming or mining.
A platform to address the South East Asian Market
Singapore is a city, a city-state. The total population is 5.5 million people. 3.8 million are Singaporeans or Permanent Residents (PR). The rest are expatriates or migrant workers.
The domestic market being rather small, Singapore has no other choices but to look for export to survive.
The Father of the Nation, Lee Kwan Yew, has definitely turned his country towards the outside world.
From the late 60s, he has put Singapore as an interface between the industrialized world and the emerging economies of South East Asia.
South east Asia was going through difficult times, resulting from recent decolonization and Cold War displaced conflicts.
Vietnam War had extended to Laos and Cambodia. Malaysia was fighting a Communist insurrection. Indonesia was under the New Order rule of President Suharto and the Philippines in the iron fist of President Marcos.
Indeed, Singapore was the only peace haven, the only place where one could settle without fears or worries, where investors were welcome as capital, jobs and technology suppliers.
It was the strong wish of the government of Singapore to offer a clean, in every sense of the terms, country to foreign investors and businessmen.
A nice airport, a highway with borders of flowers, clean streets, a very low crime rate, almost no corruption, a simplified employment law, no strikes, an advantageous tax system and a rather impartial judicial system, what a recipe for success !
Singapore has invested in outstanding logistics means. The port of containers is entirely automatic and the airport services are amongst the best in the world.
The connections toward the main South East Asian places are fast. Customs procedures are simplified. Everything is made to make sure that goods transit through Singapore.
To attract foreign headquarters or representative offices, the government has built up a very comforting environment, in particular in developing a world class health system.
Immigration is made easy. Capitals and profits circulate easily and their repatriation is not an issue.
Everything is made to incite companies and foreign management to settle there.
Singaporeans often refer to their island as « Singapore Inc. » a state managed like a company. It is true.
A well trained manpower but to be complemented
Schools and universities of Singapore provide now quality education. Singaporeans, wealthy enough or benefiting from scholarships, will study in the UK, the USA or Australia.
While looking very modern, Singapore is still a very traditional society, almost traditionalist.
Most of the population being of Chinese descent, Confucianism remain the main value.
Discipline is strict is school where no one challenges the teacher. Discipline is strict in the country where no one criticizes the government.
Hence, to take initiative is not always a reflex. But procedures will be followed diligently and with great application.
Singaporeans will have a tendency to over sale their ability to interact with neighbouring countries.
The dazzling success of Singapore and a certain lack of tact did not necessarily make them very popular with their neighbours.
Luckily, it is easy to hire foreigners in order to complete local teams.
Singapore is a mixed society. It is necessary to add other cultures or nationalities to bring the bit of creativity or understanding of the outside world that may be missing.
To register a company in Singapore
There seems to be competition between Singapore and Hong Kong : which one will make it easier to register a company ?
What will you need in Singapore? : A resident director and two hours of time.
The law imposes that at least one director, moral of physical per son, is a resident of Singapore. He does not need be Singaporean.
There are many law offoces, duly authorized by the Government of Singapore, which will register a perfectly legal company in less than two hours.
The capital has obviously to be in line with the object of business but its payment may be differed.
The accounting system is simple and accounts audit is not necessary if at least two of the following criteria are met:
– Less than 10 million Singapore dollars in sales turnover
– Less than 10 million Singapore dollars in assets
– Less than 50 employees
Difficult to find better!
How to prepare an offer a conduct meetings and negotiations
English is one of the official languages of Singapore. It is perfectly mastered by well-educated Singaporeans.
Proposals and contracts will be in English.
Singaporeans pay a lot of attention to details. Your offers will be read with a lot of attention. You need to be prepared to be asked a lot of questions and clarifications.
Singapore leaves very little room to hazard.
Singapore companies often use foreign experts. If a particular competency is not available in the island, it will be imported.
So, to do business in Singapore will require a lot preparation.
An incomplete or poorly redacted proposal will not attract the necessary confidence to be further considered.
The required level of details may sometimes look surprising and be deemed unnecessary. However, it is good to be patient. Indeed the “lost” amount of time will be largely compensated during the contract execution.
A contract must not be interpreted, it has to be executed.
It is always a good idea to have friendly relationships with customers or business partners.
Singaporeans like to play golf and to eat good food. Generally speaking, they like life and now how to take good advantage of it.
To participate to these two activities, play golf and enjoy a good dinner, will certainly help business. But nothing will beat a good offer or a fruitful partnership.
Still, in this very traditional society, it is important not to miss the traditional or religious celebrations.
For the Chinese, whatever their religion may be, the Lunar New Year, commonly called Chinese New Year, is the most important.
The traditional greetings are to wish health and prosperity.
Hong Bao, or red envelops, will be offered to the youngest or the less well-off. These envelops must contain money. The more will be the better, but it is important that the coins or banknotes are crispy new. The total amount must contain 3s and 8s, the most auspicious numbers. Number 4 must be avoided as it carries bad luck.
Within the Malay community, the most important will be the celebration of Eid, the end of the Ramadan.
During Ramadan it is a good idea to participate to “buka puasa”, literally “opening of the fasting”, the time at night when the faithful may eat.
Singapore Inc. ever, but still let’s enjoy life!
Singaporeans love acronyms.
If a friend tells you that he will take the SLE to JB for CNY, he is just telling you that he will take the Seletar Expressway to Johor Bahru for the Chinese New year.
Ever pragmatic Singaporeans…