For ambitious, high-growth UK tech companies with overseas expansion plans, Singapore offers an unrivalled ‘gateway’ into Asia.
During his trip to the Asean (Association of Southeast Asian Nations) region this week, Prime Minister David Cameron highlighted Southeast Asia’s 600 million people and thriving emerging economies, which could represent trade worth £3bn to the British economy.
Southeast Asia is on the brink of a meteoric economic rise, supported by the launch of the Asean Economic Community on 31 December this year. With a combined GDP of £1.2 trillion (similar to that of the UK) across its 10 member states, Asean is predicted to be the world’s fourth largest ‘single market’ by 2030, after the EU, US and China.
It is Singapore - with its highly connected, technologically sophisticated infrastructure and workforce, and ambition to be the world’s first ‘Smart Nation’ – that is attracting some of the UK’s most compelling tech businesses in search of a business-safe Asian market entry point and venture capital to fund their rapid growth.
Singapore has the highest number of start-ups, attracts the largest volume of Series A funding and receives steadily increasing Foreign Direct Investment (totalling $67.5bn in 2014, with the UK third-largest investor). It ranked number one for ‘ease of doing business’ out of 189 economies for the second consecutive year in 2015, and benefits from stringent legal protections for intellectual property and data privacy. Its English-speaking business culture is generally considered more user-friendly for Western businesses than China, for example.
During the past five years, there has been an unprecedented surge in demand from technology companies seeking legal and strategic guidance to support their plans to launch enterprise operations in Asia.
Yet, while Singapore is a relatively easy place to conduct business, strategic overseas expansion is challenging for any business; there is so much to consider, from different business structures and tax treatments to immigration policies and intellectual property and data protection rules.
As Cameron’s trip highlighted, Singapore is strengthening its anti-corruption institutions and enforcement so foreign companies now need to be prepared to showcase robust anti-corruption programmes within their organisation.
Recognising the vast number of investment opportunities and the potential minefields, we launched our now-annual trade mission, TechConnection, in 2013 to ensure UK technology companies not just meet potential investors but also the partners crucial to facilitating any expansion plans. Innovative tech companies such as Metail and Cambridge Consultants have already used Singapore as a successful gateway into Asia, expansions they say have benefited by having ‘on the ground’ support from experts with deep local contacts and local knowledge, which can avoid costly delays or reputational damage.
With £3bn in potential trade, UK tech should look east.