“You’ll never find any interesting deals in Singapore,”
“You’ll never find any interesting deals in Singapore.” A remark told when I first moved to Singapore. Winding back time to 2010, Singapore didn’t have a sizzling start-up scenes. It was seemed only as a tiny island with limited natural resources. A port for tourist, sister of Hong Kong, or a heaven to shop- names and terms that define Singapore in a commercial way.
Yet behind all those glam and shopping sprees, Singapore proves to be a booming tech hub with strong research institutions and factors to drive innovation. Let’s take a look at some of these factors.
- Support from Government
Singapore’s government makes a serious concerted effort to support start-ups and tech companies. These initiatives are seen through how it is providing policies and grants to help development activities, such as TIS (Technology Incubation Scheme) and ACE Startups Grant. In order to lower the barriers for foreign startups, Singapore has removed its criteria of S$50.000 paid-up capital and replaced it with a scheme of idea proposals, where entrepreneurs are given a chance to do market exploration in Singapore and applying the result of exploration into products they’re going to build.
- Easy company incorporation
Singapore is regularly ranked as one of the easiest countries in the world to do business. With orderly documentations, rules are clearly laid out and easy to follow. It just needs two simple steps ; 1) Company Name Reservation and 2) Company Registration (filing of application form). The entire process is computerised, and hence, simple and convenient. The tax rates is comparatively low and designed to support new business.
A newly incorporated company (whose annual revenue is below S$100,000) can benefit from the full tax exemption scheme (0%) for the first three years. This is subjected to fulfilling the certain requirements of the government. The new and existing companies may leverage the benefits of partial tax exemption under which the effective tax rate would be 8.5% if the annual revenue of the company is between S$100,000 to S$300,000.
- Talent Quality
Immigration is common and it makes Singapore a place to get educated and skilled workers. It offers working passes depending on skill-sets and specific employment pass targeting would-be entrepreneurs. Where majority of the workforce is able to speak English, it plays a vital point to communicate in global arena. The availability of talented resources makes the island nation a regional and global hub of business.
- Presence of venture capitals and investors
Presence of venture capitalists, private and angel investors helps startups to lay a strong foundation of the business by providing funding assistance (Chart-01). Injection of capital speeds up startups’ expansion into new market and enables to grow the team, such as Carousell who raised fund from Rakuten Ventures, ride-hailing apps Grab and Uber who are backed by Softbank. And the gaming company Garena which went to public offering.
- A sandbox for expansion
The number of population and tech-savvy consumers provides Singapore an advantage to become a testbed before a product goes global (Chart-02). The top Silicon Valley investor Sequoia Capital, four years ago, started using Singapore as a testbed for expansion for its startups, with direct investments in mobile marketplace Carousell and real estate search site 99.co. Its geographic location also gives the city-state the ability to develop business relationships with Asian markets that surround the country. This gives startups access to multinational corporations and affluent clients.
Lastly, consider what Co-Founder and CEO at HotelQuickly, Tomas Laboutka, says about Singapore- that Singapore has always asked the question “How can we stay competitive?”
“How can we stay competitive?”
This is a promising outlook as it shows the level of dedication and seriousness of Singapore when it comes to keeping its startup ecosystem afloat. Singapore proves that size doesn’t matter and it is not impossible to rise to the top as one of the world’s quality tech hubs.
Developing IT projects or building a prototype (Minimum Viable Product) for your Startup? Feel free to reach out to us, In LEVR, we help Singaporean startups to deliver with our on-demand engineering team!
