Market Access Singapore
Why Singapore?
The island republic of Singapore, though small, is an interesting market for overseas companies. It serves as an excellent operational hub for the Asian operations of international companies, thanks mainly to its economically strategic location, political stability and first-class infrastructure.
The surrounding markets of Southeast Asia, China, Australia, and India, are serviceable from Singapore. A survey conducted among Singapore-based German companies revealed that 96% use the city-state as their hub for serving their Southeast Asian operations.
Singapore is a member of the ASEAN (Association of South East Asian Nations: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Thailand, Viet Nam) and enjoys bilateral Free Trade Agreements with New Zealand, Japan, Australia, USA and EFTA (European Free Trade Area: Island, Liechtenstein, Norway, Switzerland)
Singapore’s parliamentary system of government and a legal code that is deeply rooted in the English system are among the pillars that have provided the city-state with stability that is unrivalled in its neighbourhood.
The island covers an area of 693 square kilometres, supporting an ethnically-diverse population of 4.2 million, of which 76.6% are Chinese, 13.9% are Malay, 7.9% are Indian, and the remaining 1.5% comprising other ethnic groups, mainly European and Eurasian.
Economic take-off
Singapore embarked on an impressive economic development programme immediately after it gained independence from Malaysia in 1965. This has transformed it into one of the world’s most prosperous countries. The city-state today enjoys a stable currency, transparent investment rules, and a flourishing and mature banking sector.
Singapore’s infrastructure is among the world’s best. The port of Singapore, for example, is the world’s largest container port – which explains why international trade is a critical driver of the island republic’s economic growth.
There are innumerable examples that one can use to highlight the quality of Singapore’s infrastructure: the international airport, Changi, comfortably supported a passenger throughput of about 35 million in 2006; the public rail-transport system, called the MRT (Mass Rapid Transport), reaches into all the main population and business areas; and, finally, but by no means last, telecommunication services are sophisticated and competitively priced.
A company setting up in Singapore is unlikely to face difficulties in hiring skilled and qualified employees. This country has developed one of the most competitive educational systems in the world and, therefore, is endowed with excellent schools and universities. Thanks to the government’s emphasis on education and the city-state’s British legacy, English is spoken by just about everyone and it is the language of business.
It is clear from the above description that Singapore is an extremely convenient place to operate a business in. Within the past few months the rentals for office space have increased, however against the backdrop of current large construction projects, the rental market is expected to slacken in the near future.
Another critical important plus point is the secure and transparent environment that the public and private sectors enjoy. This has been highlighted in a report by global anti-corruption watchdog Transparency International in 2003, which ranked Singapore fifth in the league of least-corrupt states. The government does come down severely on those found guilty of corrupt practice. This security, coupled with the city-state’s strict enforcement of Intellectual Property Rights (IPR), is a critical factor that makes Singapore an ideal location for a business
Investor-friendly oasis
All the above-mentioned achievements have made Singapore stand out among its neighbours. The success that Singapore has enjoyed has pushed up wage-levels to just about Western levels. But, in weighing this against the cost savings that a businessperson enjoys from its first-class infrastructure, high-quality skills, and security enjoyed, Singapore’s attractiveness as a business hub is still unmatched.
Given Singapore’s high-population density and small land area, the island republic may not necessarily be an ideal location to set up a large-scale, low-to-medium value-added manufacturing plant. Manufacturers have found a way around this by setting up factories at either the nearby Malaysian state of Johor or the Indonesian island of Bintan, using Singapore as a hub to manage these operations.
Singapore nevertheless does support a robust manufacturing sector, mainly at the higher value-added levels, such as in aerospace components and precision electronics.
It comes as no surprise that agriculture’s contribution to the GDP is negligible. Trade and trade-related services comprised 30% of GDP in 2007; financial services contributed12%; transport and communication, 11%; construction, 6%; and manufacturing 18%.
As part of its effort towards creating an investor-friendly environment, the government has a policy of welcoming qualified and skilled foreign workers. The same friendliness applies to setting up a business: foreign investors are allowed to enjoy 100% ownership of the businesses they set up. Therefore, it comes as no surprise that the island republic is home to 790,000 expatriates and foreign workers.
The specific infrastructure of the SGC, German Centre and the German Embassy help facilitate market access for German companies that are keen to set up in Singapore.
For your engagement in Singapore we strongly advise you to contact our office. We can provide valuable information and experience. 
Singapore economic data (Click to view)
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