The ABC(DE) of business in Singapore for German companies
If you are a German company looking to setup or expand your business in Singapore, here are some tips that you would find helpful.
Germany is Singapore’s largest trade partner in Europe and, conversely, the city state is Germany’s largest trade partner in ASEAN. Bilateral trade between both countries grew by 8.3% to S$21.6bn in 2017. There are nearly 1,700 German companies in Singapore representing industries ranging from chemicals to chocolate.
German companies are attracted to setting up a business in Singapore because of its ease of doing business. The World Bank has ranked Singapore as the world’s easiest place to do business in Asia for five years in a row. For instance, the Singapore company registration process takes as little as 24 hours if no additional government agency approvals or licences are needed.
Submitting the online application for your company incorporation can also be easy and hassle-free if you were to engage a registered filing agent to handle the procedures for you.
And there are plenty more reasons as to why Singapore is the ideal location for doing business. Here, we will offer some insider tips that will help to ease your entry into sunny Singapore.
A for AssociationsFounded in 1856, the German Club is the oldest foreign club in Singapore. Together with the Goethe-Institut, Germany’s cultural institute, the two societies promote German culture and language in Singapore.
In addition, the support network for German companies in Singapore is strong with government and industry-linked organisations such as the Singaporean-German Chamber of Industry and Commerce, German Centre for Industry and Trade and the German embassy.
German-based associations can also access their relevant industry network to explore business opportunities in Singapore and meet like-minded people. From April this year, the German industry association, IVAM Fachverband Für Mikrotechnik (IVAM), will partner with Singapore Precision Engineering and Technology Association (SPETA) to collaborate on the adoption of Industry 4.0 technologies. To begin with, both parties will be able to list their members in the other’s member directory as a means to connect with potential partners among companies in Singapore and Germany.
B for Business opportunitiesIn additional to a business-friendly environment, Singapore, being a well-connected hub for a booming region, also has plenty of business opportunities.
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 Mercer survey reported that Singapore also has the world’s best infrastructure with easy access to transportation, reliable electricity supply, political stability and low crime rates.
Singapore also has a network of over 22 implemented Free Trade Agreements (FTA), providing easier entry and duty-free imports into various export markets within the ASEAN region and other neighbouring nations such as China, India, South Korea, Australia and New Zealand.
With such a conducive business environment, more German companies in Singapore are expanding their operations here to become innovation hubs. DHL launched its first innovation centre outside of Germany in Singapore (https://www.channelnewsasia.com/news/business/dhl-launches-s-10m-innovation-centre-in-singapore-8245702) while gas giant Linde opened a $30m digital innovation hub (https://www.straitstimes.com/business/companies-markets/linde-to-invest-s30m-in-singapore-digital-technologies-hub) earlier this year.
Find out how the environment for business in Singapore compares to that of Germany.
C for CooperationSingapore and Germany have enjoyed warm diplomatic relations for more than 50 years. Both countries celebrated 50 years of diplomatic relations in 2015 and have collaborated on initiatives covering economic and defence such as the enhanced Defence Cooperation Agreement.
The two countries share common goals in promoting financial technology (fintech) and Industry 4.0 for manufacturing. Industry 4.0 uses automation and data exchange to improve manufacturing technology and processes.
As both countries have been strong in the manufacturing and financial services sectors, there is a shared understanding that early technology adoption will continue to drive their global competitiveness in these sectors.
German gas and engineering company, Linde, plans to transform its plant in Jurong Island, and offshore island west of Singapore, into a plant of the future with Big Data analytics and machine learning.
German online bank, Fidor, recently launched its first fintech education curriculum in Asia with five Singapore polytechnics, facilitating knowledge exchange on a fast-growing sector.
D for Deutsche sprechen (or speak German)The German European School Singapore is the largest German school in Southeast Asia. In addition, German is offered as an additional subject in a number of local schools, creating a pool of German-speaking Singaporeans who are exposed to the German language and culture from a young age.
There are even German-speaking Protestant and Catholic churches that allow German families in Singapore to continue family traditions from back home.
E for Entrepreneurship
Earlier this year, Singapore’s science and technology agency, A*STAR and the Germany’s Federal Ministry of Education and Research, BMBF, announced a call for proposal between organisations from both countries to collaborate on joint research projects. Funding of up to $500,000 or €300,000 will be given for projects in new materials and methods in additive manufacturing, security systems for Industrial Internet of Things (IIOT), smart sensors and actuators for production and advanced manufacturing systems.
In addition, government agencies such as A*STAR and the Economic Development Board (EDB) also offer training grants, research grants and regional or global headquarter tax incentives to businesses looking to set up a company in Singapore
For high-potential start-ups in Germany, a scheme is available to support their entry into Southeast Asia through Singapore-based acceleration programmes.
Collaborative yet targeted funding programmes such as these help to promote entrepreneurship and business opportunities in Singapore and Germany, allowing them to expand into territories beyond their own.
Disclaimer: All materials have been prepared for general information purposes only to permit you to learn more about Hawksford, our services and related matters. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.