Why Singapore remains attractive to Dutch companies, 400 years on.
Netherlands’ historical ties to Singapore dates back to the early 17th century. Find out why trade between these two countries will continue to thrive well into the 21st century.
The thriving Dutch community in Singapore even established Holland Village in the early 1900s. The neighbourhood now hosts a thriving community of cafes, restaurants and art galleries.
When Singapore first gained independence in the 1960s, Dutch economist Dr Albert Winsemius was instrumental in laying the plans for Singapore's economic future. Dr Winsemius, Singapore’s economic adviser for 25 years, helped propel the island nation into the world stage. He introduced concepts such as political stability, economic restructuring, labour productivity and planned modern housing that continue to be the bedrock of Singapore’s development till today.
Top investor in SingaporeIt is thus no surprise that Singapore is the top overseas investment destination for the Netherlands in Southeast Asia.
The Netherlands is the fourth biggest investing country into the FDI stock in Singapore1, and ranked as the largest EU investor, with total investments amounting to more than S$100 billion (€60 billion). Similarly, Singapore has more than S$18 billion worth of investments in the Netherlands.
EU-Singapore trade agreement in actionThe EU-Singapore trade agreement was approved by the European parliament in February 2019 and promises to be a landmark trade deal that will improve market access for both parties. It covers not just reduction or removal of tariffs but also enhanced intellectual property protection and improved market access for both parties.
Almost 3,000 Dutch businesses already export a wide range of goods and services to Singapore. 89% of them are small to medium-sized enterprises and the trade agreement will now make it easier and more cost efficient for them to do so.
Governmental and industry-linked initiativesThe support network for Dutch companies in Singapore is strong with government and industry-linked organisations such as the Singaporean-Dutch Chamber of Commerce and the Dutch embassy.
ADB-DutchCham, a Dutch business network offers regional support and facilitates business opportunities among Dutch companies and professionals in Singapore.
At the same time, Singapore government agencies like A*STAR and the Economic Development Board (EDB) offer generous training or research grants and regional or global headquarter tax incentives to multinational companies looking for a base in Asia.
Singapore’s low headline corporate taxes, generous tax exemptions for small and medium-sized companies, and industry-specific tax incentives help lower the cost for Dutch companies taking their first step in international expansion.
Dutch companies growing stronger than ever
In modern-day Singapore, other Dutch companies have replaced the VOC and continue to thrive. There are more than 1000 Dutch companies in the city-state, with activities ranging from financial and insurance to real estate.
Dutch conglomerate Royal Philips set up in Singapore in 1951. It recently opened the 38,000 -square-metre Phillips ASEAN Pacific Centre that will serve as the company’s regional headquarters. The facility also includes a new tele-healthcare centre that will enable hospitals to remotely monitor and treat patients at home.
Singapore is Royal Dutch Shell’s largest petrochemical production and export centre in the Asia-Pacific region. The company also recently raised oil storage capacity at the Bukom refinery 2. The Bukom manufacturing site is an integrated refinery and chemicals site and can process up to 500,000 barrels per day of oil.
With the opening of its branch office in 1987, ING is a relative newcomer to Singapore. Its wholesale banking arm on the island is the largest in the region with over 300 bankers.
Fintech – the new wave of MNCs
As the regional banking hub, Singapore has continued to stay relevant with the rise of financial technology or fintech. The local banking regulator, Monetary Authority of Singapore, has launched sandboxes, blockchain-based cross-border arrangements and updated regulations that keep up with the latest fintech developments.
In November 2018, Singapore hosted the Fintech Festival, the world’s largest financial technology event, attracting more than 30,000 participants. In a public-private collaboration between the two countries, Dutch companies were invited to join a Startup Mission for doing business and/or expansion into Singapore or ASEAN.
Rockstart, the largest accelerator in the Netherlands, has already selected Singapore as its main hub in Southeast Asia3. In an interview with an industry news portal, TechinAsia, Rockstart Southeast Asia’s founding partner, Chi Tran said: “We explored other options within the region, [but] Singapore has by far the best infrastructure and ecosystem that supports startups, accelerators, investors, and businesses.”
“[It has] all the ingredients founders need to grow their company in the region.”
Springboard for regional expansion
Singapore’s geographic location allows for easy access to larger regional markets such as Thailand, Indonesia, Philippines and Vietnam. The sea port is linked to 600 other ports globally while the airport connects to 210 cities with more than 6,000 weekly flights.
The latest survey by Mercer, a human resources consulting firm, reported that Singapore has the world’s best infrastructure with easy access to transportation, reliable electricity supply, political stability and low crime rates.
Families looking to move to Singapore can access its excellent education facilities. The Hollandse School Singapore is the largest Dutch-language IPC (International Primary Curriculum) outside the Netherlands, and is an established name in Singapore and beyond.
In addition, several international schools, such as the German European School Singapore and the United World College of Southeast Asia offer Dutch lessons to children in secondary education. LanguageOne Singapore also provides Dutch language and cultural education for both children and adults.
This article is produced by Hawksford and does not constitute legal advice. It is intended to provide general information only.
1 Foreign Investment in Singapore, July 2019
2 Channel News Asia, July 2019
3 Go Medici