SINGAPORE

By Chai May

Country background

• Singapore is one of the most densely populated countries in the world. The annual population growth rate for 2010 was 1.8%, including resident foreigners.
• Location on major sea lanes and its industrious population have given the country an economic importance in Southeast Asia disproportionate to its small size.
• English is the language of administration and also is widely used in the professions, businesses, and schools.
• Religious freedom in Singapore.
• Major industries: Manufacturing.
• Major markets: Malaysia (11.9%), Indonesia (9.4%), Hong Kong (11.7%), EU (9.8%), China (10.3%), United States (6.4%), and Japan (4.7%).
• Major suppliers: EU (12.3%), Malaysia (11.7%), United States (11.2%), China (10.8%), and Japan (7.9%).
• Economies of its major trading partners--the United States, the European Union, Japan, and China, as well as expanding emerging markets such as India.
• Largely corruption-free government, skilled work force, and advanced and efficient infrastructure have attracted investments from more than 7,000 multinational corporations from the United States, Japan, and Europe. Also present are 1,500 companies from China and another 1,500 from India.

Main challenge

• Singapore is generally a free port; more than 99% of all imports enter Singapore duty-free.
• For social or environmental reasons, it levies high excise taxes on distilled spirits and wine, tobacco products, motor vehicles, and gasoline.
• Strong competition from both foreign and local suppliers. Despite its liberal trading regime, foreign companies face barriers in certain service sectors such as telecommunications, media, financial and professional services, and energy.

Major opportunity

• Singapore is a sophisticated and modern economy that offers excellent opportunities for U.S. firms interested in penetrating the Asian market.
• The World Bank's "Doing Business 2010" report ranked Singapore as the easiest country in which to do business. 
• Singapore’s market appeal is its free port status, straightforward, English-speaking, U.S. style of doing business, strong intellectual property protection with virtually no corruption. 
• The country is a major trading hub, importing and exporting all kinds of products from consumer goods to high technology and industrial goods for re-export to third countries..
• The Singapore government and private industry are expected to invest in several major projects including:
• Construction of US$300 million motor sports hub to be ready of end 2011;
• Construction of US$47 million new air cargo hub at Singapore Changi Airport to be completed by first half of 2012;
• Construction of a second desalination plant to be ready by 2013;
• Construction of US$1 billion LNG terminal that will start operations in mid 2013;
• Construction of a US$530 million underground oil storage facility
• Construction of a public hospital with an allocated budget of over US$700 million scheduled to be ready by 2014
• Construction of a private sector 350-bed hospital costing between US$207 and US$345 million to be built by 2012 while another private healthcare group will spend between $61.5 million and US$77 million to expand their flagship hospital scheduled for completion by 2012;
• Singapore’s second largest telecom services provider together with regional telcos will jointly build and operate a US$430 million submarine cable connecting East Asia’s major business hubs.
• Construction of new Mass Rapid Transit (MRT) rail lines costing over US$30 billion that will double Singapore’s MRT network from 138km today to 278km in 2020.
• Singapore government investments of US$5 billion by 2013 to foster research and high-end production in industries such as precision engineering and life sciences.

Doing business in Singapore & Establish an Office

• Processes of establishing a branch office or incorporating in Singapore.
• Register with the authorities.
• required to contact a professional, a lawyer or a Charted accountant to help him in the procedures and filings of the application for registration. The Companies Act requires a foreign company or any multi-national company (MNC) to appoint two people in Singapore to carry the business on behalf of the company.
• Get the company name approved.
• The Act requires that a company name must be approved before the company can be registered. A proposed company name will not be approved if it is identical to the name of another local company, branch of a foreign company or business firm. Undesirable names, including offensive, religiously offensive names or vulgar names will also not be approved.
• Register a Branch Office if necessary.
• Register a branch office or incorporate a company with the Accounting & Corporate Regulatory Authority (ACRA). There are some guidelines which required to be followed by foreign companies while doing business in Singapore. Regional offices can carry a feasibility study, market research and liaison work on behalf of the parent company.
• Register a sole-proprietorship, partnership, limited liability partnership or incorporate a company in Singapore.
• For a sole proprietorship the process takes about one day, while more complex business entities can take up to six weeks and require lawyers and accountants to assist with incorporation documents.
• Foreign staff must obtain employment passes from the Singapore Ministry of Manpower, although this is generally quite routinely.
• Submit application for approval.
• A company can submit an application for approval online via Bizfile through a professional firm or service bureau. The same can also be submitted by a proposed director of a new company. S$15 is payable for each approved company name. An approved name will be reserved for 60 days from the date of application.
• Find customers before you start.
• Use a search engine to look up things like 'find customers in Singapore' or 'find clients in Singapore' to find the top companies and resources which can help you find customers right from the start.

Using Agent or Distributor

• Using agents or distributors is a common and effective way to serve the Singapore market and, from here, other countries in Southeast Asia.
• Singapore firms are aggressive when it comes to representing new products and typically respond enthusiastically to new opportunities. Because of the relatively small size of the Singapore market, potential partners often ask to cover regional territories.
• It is important to maintain a good relationship with them and respond quickly to inquiries. Prospective exporters to Singapore should be aware that competition is high and that buyers expect good after-sales service.
• Most American companies that use the U.S. Commercial Service (CS) Singapore matchmaking and promotion services in Singapore find several interested agents or distributors. When business warrants, many companies have found it useful and sometimes necessary to set up offices in Singapore. Singapore is home to over 1,500 American firms, most of which serve the regional market.

Joint ventures/licensing

• Foreign investors are not required to enter into joint ventures or cede management control to local interests.
• In Singapore, local and foreign investors are subject to the same basic laws. Apart from regulatory requirements in some sectors, the government screens investment proposals only to determine eligibility for various incentive regimes.
• Singapore places no restrictions on reinvestment or repatriation of earnings or capital.
• Licensing is also a viable alternative in Singapore. With one of the strongest IPR protection programs in Asia, a well-developed legal framework and an advanced manufacturing base, Singapore is an attractive location for American licensors.

Selling to government

• Singapore is a signatory to the WTO Agreement on Government Procurement.
• The U.S.-Singapore FTA provides increased access for U.S. firms to Singapore’s central government procurement.
• U.S. firms generally find Singapore to be a receptive, open and lucrative market.
• The Singaporean government procurement system is considered by many American firms to be fair and transparent.
• Some local firms have expressed concerns that government-owned and government-linked companies (GLCs) may receive preferential treatment in the government procurement process.
• Procurement recommendations are made at the technical level and then forwarded to management for concurrence.

Distribution & Sales channel

• Singapore's distribution and sales channels are simple, direct and open.
• Because of its role as a regional hub, most local distributors will also have knowledge of regional distribution rules and regulations.
• Most consumer goods are imported by stocking distributors who resell to retailers. Some goods are imported directly for sale in the importer's own retail outlets.

Electronic commerce

• Singapore is one of the first countries in the world to enact a law that addresses issues that arise in the context of electronic contracts and digital signatures. The Electronic Transactions Act (ETA) (Cap 88) was enacted to provide a legal foundation for electronic signatures, and to give predictability and certainty to contracts formed electronically.
• The Singapore ETA follows closely the UN Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce, which sets the framework for electronic laws in many countries.

Openness to foreign investment

• Singapore’s foreign ownership policy is a true reflection of its openness to foreign investors.
• Foreigners are allowed to have 100% shareholding in a Singapore company. No special permits or approvals are required for foreigners wanting to invest in Singapore.
• Foreign firms are found in almost all sectors of the economy. Multinational corporations account for more than two-thirds of manufacturing output and direct export sales, although certain services sectors remain dominated by government-linked companies.

Right to private ownership & establishment

• Few types of business activities require a business license in Singapore. Essentially, a business license is a permit issued by a Singapore government agency that allows people to conduct a specific type of business.
• In order to apply for a business licence in Singapore, the company must be first registered with the registrar of companies.
• The various types of Singapore licenses and permits are:
• Occupational licenses for professional services – Professionals such as lawyers, doctors, financial planners, pilots, commodity futures traders and accountants need to obtain occupational licenses to practice.
• Compulsory licenses – Certain types of businesses require a special license before they can operate. Private schools, travel agencies, liquor distributors, money remittance agencies and childcare centre are some examples.
• Business activity licenses and permits – Licenses and permits you need if you decide to carry out certain types of business activities. For instance, you may need to renovate, erect advertising billboards on your premises, or export your products. For each of these activities, you need to get a license or permit.

Business customs

• Business discussions :
• Conducted in a very straightforward manner.
• English is widely spoken and most business people are skilled and technically knowledgeable.
• Many Singapore business people are of ethnic Chinese background, and many of them will have “Western” first names (e.g., Nancy Goh). Those who do not will have only their Chinese name on their business card, in which case the family name is listed first. Mr. Chan Yiu Kei would be addressed as “Mr. Chan” and Ms. Wong Ai Lan as “Ms. Wong.”
• The names of business people of Malay or Indian descent are written and spoken as given name followed by family name. For the sake of politeness and respect, it is wise to address a businessperson by the last name rather than the first name until invited to use a given name. When in doubt it is not impolite to ask. The common and polite Singaporean phrase is ‘How shall I address you?’
• Business cards :
• Immediately exchanged during business and social meetings. The East Asian practice of presenting a business card with both hands is observed.
• There is no need to have special business cards printed in Chinese.
•  Business dress:
• Long-sleeved shirt and tie for men, although one will not be out of place without a tie. Some formal meetings call for a coat and tie.
• Businesswomen wear light-weight attire.
• Evening dinner-dress is a shirt and tie for men but there isn’t a strict dress code for women.

Local time, business hours, & holidays

• Singapore is twelve hours ahead of Eastern Daylight Savings or thirteen hours ahead of Eastern Standard Time.
• Normal business hours are 8:30 a.m. - 5:00 p.m., Monday-Friday.
• Government of Singapore agencies and many private sector companies are closed for business on Saturday.
• Shops are normally open every day from 10:00 am – 9:00 p.m.

Fact Facts

Population	5.077 million (Include permanent residents, foreign workers). Annual population growth rate (2010): 1.8% (total); 1.0% (Singapore citizens and permanent residents).
Capital	Singapore (country is a city-state)
Area	712.4 sq. km
Ethnic groups	Chinese 74.1%, Malays 13.4%, Indians 9.2%, others 3.3%
Religious	Buddhist, Taoist, Muslim, Christian, Hindu
Major Language	English
Monetary Unit	Singapore Dollar (SGD)
Major industries	Manufacturing
Major exports	petroleum products, food/beverages, chemicals, pharmaceuticals, industrial machinery and equipment, electronic components, telecommunication apparatus, transport equipment
Major Imports	aircraft, crude oil and petroleum products, electronic components, radio and television receivers/parts, motor vehicles, chemicals, food/beverages, iron/steel, electricity generators
GDP	$222.7 billion
GDP per capita	$43,867.

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