In this third and final part of our trilogy, exploring new markets for Gibraltar businesses who are looking to expand beyond the EU, we travel further east and explore one of the world’s strongest city-state economies and international business hubs – Singapore!
Known as the ‘Gibraltar of the East’ due its impregnable fortress, after being liberated by the British Forces in 1945 during a fierce battle with the Japanese during Second World War, Singapore has a unique position in the global economy and a pivotal role as a business epicentre in the heart of Asia.
Apart from its British colonial history, Singapore has many other similarities to Gibraltar: it is one of the world’s smallest countries with a land area of only 728 square kilometres and a population of 5.7 million, making it one of the world’s most densely populated countries. Located off the southern tip of Malaysia in Southeast Asia, it is positioned on a key maritime route used by many countries including Japan, Taiwan, and China. It is surrounded by countries such as Indonesia, and a not-so-friendly neighbour to its north – Malaysia.
After gaining independence in 1965, Singapore’s economy has grown tremendously, particularly in the 1980s and 1990s making it an important global financial centre, with GDP per capita growing from a mere US$320 in the 1960s to around US$60,000 in 2019. Indeed, the city-state has been consistently acknowledged as a global business hub, ranking top in many global business indices trading, including:
#1 Best business environment in the Asia Pacific and the world: Business Environment Rankings (BER) 2019, The Economist Intelligence Unit
#1 in the Asia Pacific and #5 in the world for Best global innovation: Global Innovation Index 2018
#1 in achieving human capital (knowledge, skills, and health) in the world: Human Capital Index 2019, World Bank
#2 in the world for economic freedom: Economic Freedom Index 2018, Heritage Foundation
#2 in the world for the easiest place to do business: Ease of Doing Business Index 2019, World Bank
#2 most competitive economy in the world: Global Competitiveness Report 2018, World Economic Forum
Singapore has one of the most stable political environments in Asia, offering entrepreneurs and investors a strong sense of security and comfort. Its judicial system has been recognised as one of the most efficient in Asia, enforcing anti-corruption laws so that investors can conduct business without fear of bureaucratic malaise. Moreover, through strict law enforcement, Singapore has a persistently low crime rate and offers residents a high degree of personal safety.
Like Gibraltar, Singapore has also adopted a territorial basis of taxation. Foreign-sourced income is taxed only when it is repatriated back into Singapore. In addition, tax is not levied on foreign-sourced dividends remitted back into Singapore.
When it comes to doing business in Singapore, it is important to remember that Singapore is comprised of many different cultures, and although English is the language of choice when doing business there, you should come prepared to meet Chinese, Malay and Indian Singaporeans, who all follow different customs. As in the West, expect business meetings to take place in company offices or worksites as appropriate to your industry, but if talk over a meal is called for, lunch is always the winner in Singapore – not breakfast, brunch or dinner. While the unwritten dress code for business remains formal, you’d be forgiven for ditching your suit jacket or carrying it over your arm rather than on your back, as there’s only one season in Singapore, and it’s known as ‘hot’. Temperatures at midday tend to hover around 30°C year-round.
Singapore’s business activity revolves primarily around the following sectors:
Energy and Infrastructure
Singapore is crucial in Asia as it is both a primary hub of oil trading in Asia as well as the pricing centre. On its own, the oil industry contributes about 5% of the total GDP. As a result of the oil refining and exporting sector, other sectors such as the chemical industry and manufacturing of gas and oil equipment have also been promoted.
In the region, Singapore has the largest biotechnology facilities. The government has been able to bring foreign investors through millions of dollars that have been pumped into growing the sector. Several international companies have established their manufacturing bases in Singapore. These firms include the likes of GSK, MSD, Novartis, Abbott, and others.
Financial Services and Fintech
The range of financial services offered by the industry has evolved and expanded to include areas such as wealth and asset management, equity and bonds, foreign exchange and derivative markets. Today Singapore is one of the most established capital markets in the Asia-Pacific, with over 200 banks, and a reputable stock exchange (SGX). Moreover, the country has become an increasingly attractive destination as a preferred gateway” into Asia for fintech start-ups. Singapore’s vibrant start-up ecosystem, supportive government, stable financial system, and business-friendly tax regime have helped turn the country into an attractive spot for fintech entrepreneurs.
So, if you are looking to expand to Asia and the Far-East, Singapore is no doubt the place to be. There is no better way to enter a new market than through introductions and we would be delighted to introduce you to our business partners in Singapore, or help you explore business opportunities there.