Singapore has long been known as a country that attracts many Asian startups to establish themselves. In recent years, the country continues to affirm its position as an ideal destination for businesses looking to expand in Asia. According to the annual ranking by the Financial Times (FT) based on business performance in the last 4 years, the Lion City has the most companies on the list of the top 500 highest-growth companies in the Asia-Pacific region. So why do startups choose Singapore.

Neutral country

The ranking is not surprising for a country with only 6 million people, which is an important trading center connecting East and West. Singapore has long been a top destination for entrepreneurs and strategic investors in Southeast Asia due to government support policies, transparent legal framework, high-quality workforce, and a combination of domestic and international factors that make up the attractiveness of this island nation.

Recently, Singapore's neutral stance amid US-China tensions further enhances the country's attractiveness as an ideal place to establish a business foundation. Many companies choose Singapore as their regional headquarters to avoid risks from political instability and supply chain disruptions. With 93 companies on the list of the top 500 highest-growth companies in the Asia-Pacific region by FT, Singapore firmly holds the number 1 position, surpassing other major cities in the region such as Seoul and Tokyo. However, when considering the entire national scope, South Korea and Japan are the two countries with a higher number of companies on this ranking compared to Singapore.

According to FT, China is not ranked due to difficulties in evaluating data from its companies. Singapore's growth companies operate in various fields from artificial intelligence manufacturing, software, goods to healthcare. Singapore is considered the Switzerland of Asia, a neutral country, which is crucial in the current global political context. This country also possesses abundant talent and is known for its strict legal compliance.

Dylan Ng, co-founder of Lionsbot, a robot cleaning manufacturer ranked 23rd on the FT list, stated that most of Lionsbot's customers come from markets outside Singapore. After successfully raising $35 million in funding last year, the company is now focusing on expanding to international markets including the US and Europe.

Easy capital mobilization

Singapore is not only attractive to companies looking to develop in the domestic market but also an ideal destination for companies wanting to expand globally. Even companies not directly doing business in Singapore recognize the benefits of having their headquarters on this island. iCare, a startup ranked 65th in FT's list of the top 500 highest-growth companies in the Asia-Pacific region this year, with an average annual revenue growth rate of 115% in the period 2019-2022. iCare is headquartered in Singapore but does not have any business operations or core team here.

This startup focuses on providing access to basic household appliances such as washing machines, refrigerators, and rice cookers for low-income female factory workers in developing countries like Laos and Cambodia. Pablo Alonso Caprile, co-founder of iCare, said that having the headquarters in Singapore provides the company with a secure operating environment. The benefits of having the headquarters in Singapore are evident in many aspects, for example, Singapore has simple paperwork and reporting procedures, while clear accounting standards and transparent disclosure of information here provide reassurance to investors, Caprile shared. He also added that Singapore is an important capital mobilization center in the region, and although he mainly works in Cambodia, he frequently flies to Singapore as many iCare investors are present in this island nation.

iCare collaborates with factories to facilitate workers in purchasing essential household appliances through interest-free installment plans. The company profits from agents and directly handles refunds with factories. This business model has been successfully implemented by iCare since 2015, even before the surge in buy-now-pay-later trend.

Skrya, another company based in Singapore and ranked 10th on the FT list, is another testament to the attractiveness of this island nation to global companies. Skrya mainly generates revenue from markets outside Singapore, supporting primarily automotive parts companies in buying recycled materials such as palladium, rhodium, and platinum found in car exhaust filters through the Catal Pedia application, an application that integrates AI and 3D technology allowing customers to determine the best prices for recycled materials. "We are striving to modernize the traditional material recycling industry by applying advanced technology.

Sivakumar Avaidiar, CEO of Skrya, said that Skrya currently has several recycling facilities and a team of about 10 employees in Singapore. The company plans to expand its operations to international markets this year with the goal of building a new recycling plant in India and increasing revenue by an additional $30 to $40 million. Therefore, with a favorable business environment, transparent legal system, and its position as a financial center in the region, Singapore continues to assert strong attraction for businesses both domestic and international regardless of scale or industry.

Launchpad for businesses to reach the world

Singapore has long been known as one of the most business-friendly countries in the world, with a solid reputation and simple company establishment procedures, making it the top choice for businesses looking to expand into international markets. However, alongside its outstanding advantages, Singapore has also faced certain challenges, particularly the increasing cost of doing business.

Mr. Avaidiar, CEO of Skrya, believes that stable reputation and easy company establishment procedures are Singapore's biggest advantages. However, he also noted that the cost of business operations here has been increasing in recent years. The results of a business sentiment survey conducted by the Singapore Business Federation in January showed that rising business costs are the top challenge that businesses are facing, with labor costs being one of the biggest pressures.

Even for technology startups, the business environment is no longer as easy as before. Nina Suri, founder of Xopa AI, a software company applying AI and automation to recruitment processes, said, "The market has undergone significant adjustments in recent years, and we have to adjust and step back to focus on more sustainable growth." Xopa AI is planning to raise more funds as the company expects to break even this quarter and be profitable by the end of 2024.

Although Singapore is the largest market for Xopa AI, the company is currently focusing on expanding to Europe, the Middle East, Africa, and the US. Sharing about choosing Singapore as the main headquarters, Suri, who splits her working time between Singapore and London, said that Singapore's conducive ecosystem, including human resources and government support policies such as grants, are factors that make her decision straightforward. Suri said, "However, companies like us cannot operate only in the Singapore market if we want to survive and grow. The Singapore government understands that, and we have received grants to expand to foreign markets such as the United Arab Emirates and the UK."

Despite this, many Singaporean companies are still present in the ranking of the highest-growth companies in the Asia-Pacific region. In 2024, there is still potential for development in the domestic market. Doctor Anywhere, a startup operating in remote healthcare, is a prime example. In addition to strong online service development, Doctor Anywhere is aggressively expanding offline operations. Recently, the company has launched a diagnostic imaging and health screening center.

Doctor Anywhere is currently ranked 55th on the FT list with an annual gross revenue growth rate of 124%. Wai Mun Lim, co-founder of Doctor Anywhere, shared that "we are focusing on building and strengthening business operations in Singapore before expanding services to other markets in the region such as Malaysia and the Philippines."

Starting from Singapore is a significant advantage as it builds trust with partners and customers. When you are a business from Singapore, people will automatically assume you are a reputable and law-abiding business. Despite facing certain challenges, Singapore remains an ideal launchpad for businesses looking to reach the world while still being an open field for businesses wanting to tap into the domestic market.

Users who liked