Doing Business in Singapore 2014 - presentation

Doing Business in Singapore

29 July 2014

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Doing Business in Singapore2014

Julian Taylor

Executive Director - Asia PacificExecutive Director - Asia Pacific

Scottish Development International

Welcome & introduction

Economic Overview

Singapore

• One of the four Asian “tiger” economies

• Global hub for trade and investment

• Population of 5.4m but easy access to 600m across Southeast Asia

Singapore – a diverse economy

Manufacturing19%

Other Services11%

Business

• Services – 2/3 of GDP, 70% employment

• Manufacturing – 1/5 Business

Services

15%

Wholesale/Retail Trade

17%FinancialServices

12% Transport &Storage

8%

• Manufacturing – 1/5 GDP, 30% eletrical; 20% biomedical

• 7000 multinationals; 60% are regional / global HQs

Past economic performance

16

14

12

10

8

6

4

2

0

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

-2

-4Source: World Bank

• Strong average growth above 8% per year since independence

• Subject to external factors – big swings in economy

Current performance

($bn, capita 2012 GDP 2013 GDPgrowth

nominal)

GDP 2013 GDP per 2014 GDP

nominal) 2013 ($ Growth Growth forecast

Singapore 287 53,000 1.9% 4.1% 3.4%

Source: IMF WEO, National Statistics

Singapore

Hong

Kong

United

Kingdom

287 53,000 1.9% 4.1% 3.4%

279 38,000 1.5% 3% 4.4%

2,489 39,000 0.2% 1.7% 2.7%

Why Singapore

• Government is extremely pro-business• Hub for SE Asia – 3 billion people within 7 hour flight radius

Scotland and Singapore

• Singapore is Scotland’s 13th

largest export market

• 60 Scottish companies with a physical presence in physical presence in Singapore

• Range of companies from oil & gas, ICT, creative industries and food and drink sectors


Ruth Ellis

International Projects ExecutiveInternational Projects Executive


Key market opportunities& Routes to market

Key Market Opportunities

Key Priorities Food and DrinkLife Sciences &

Biotech

Oil & Gas Clean Tech

Biotech

Education

Oil & Gas

• Hub for SE Asia’s oil and gas industry

• Opportunities in subsea technologies, transport and logistics and services

• 30-40 Scottish companies with a physical presence

Food & Drink

• Singapore hugely reliant on food imports

• 3rd largest export destination for Scotch whisky

• Saturated and competitive market, but desire for

novel/niche productsnovel/niche products

Life Sciences

• Singapore’s Biopolis one of the world’s leading locations for biomedical research

• 30+ global life sciences companies with a presence conducting research and clinical trials

• Ageing population – opportunities for medical devices and • Ageing population – opportunities for medical devices and equipment

Clean Technology

• Sustainable city by 2030

• 900 million invested since 2007

• Integrated living labs

NTU EcoCampus

30% reduction in water,

waste and energy use by

2020

Cleantech Park

20,000 “green collar”

workers by 2030

Education

• Underpins growth of all sectors

• Established partnerships between Scottish and Singapore institutions

• Opportunity to build on this with further educational and research collaborationresearch collaboration

Routes to market

• Foreign Branch Office

• Company registered in Singapore• Company registered in Singapore

• Partnership/joint venture

• Trade directly eg importer/distributor

Challenges

• Immigration debate – controversial Population White Paper

• Tighter foreign worker restrictions

• Cost of doing business – office rentals / cost-of-living


John Fulton

Partner

Anderson StrathernAnderson Strathern

Doing Business in Singapore

�Cultural considerations

� Tips & advice

Introduction

• My task is to address the audience on the topic of culturalconsiderations and tips.

• Spending time on cultural issues and differences is often perceived• Spending time on cultural issues and differences is often perceivedas not being of sufficient importance to include in a business plan;but omit it at your potential peril as opportunities may be lost ornever created as a result. By doing so, on the other hand, yourefforts are almost certain to be appreciated and add value.

Who am I addressing today?

• Not those who have sound experience of doing business in Asia

• Nor those who are not and never will do business there!

• But rather those who may be starting to do business there; and• But rather those who may be starting to do business there; and

• Those who may at some stage think of doing so

Where does a business start?

• We will all have our views but for me the following should be considered:

– Setting out a clear strategic plan for making the commitment

– Have a financial plan to make sure that it has the resources to fulfil it– Have a financial plan to make sure that it has the resources to fulfil it

– The will and staying power to see it through – be prepared for the long

haul

– This means getting good advice from the outset and make sure the

name fits.

Then

• Carry out effective market research

• Find out if SDI, UKTI, and/ or Scottish Business Association of Singapore (SBAS) amongst others can help in facilitating Singapore (SBAS) amongst others can help in facilitating

• On initial visits – at least - the best senior people should be sent –this sends the message you are serious- given the commitment you should be!

Then

• Engaging in business involves an interface between your company and intermediaries and the company representatives with whom you are engaging. They may have very different values, assumptions and legal systems. Misunderstandings can easily arise at different times and different levels

• Things may seem to be familiar but substantive differences may lurk beneath the surface – do not make assumptions rather challenge them at all times.

• Showing respect and listening to those with whom you engage is a good place to start

What next and what I am not talking about!

• Business structures

• Regulations relating to import/ export

• Exchange controls – if they apply

• Source of finance

• Comparative state of respective currencies

What next and what I am not talking about!

• Licences and permits – if they apply

• Type of premises and location – if relevant

• Employment issues – if applicable

• Taxation; grants

• Intellectual property law to name a few ………

What are the cultural issues and etiquette in Singapore?

• Let’s start with the people – Chinese – 76%; Malay – 15%; and Indian – 6%

• Although business is likely to be conducted with the Chinese, it may be Malay most of whom are Muslim – if so, avoid conducting be Malay most of whom are Muslim – if so, avoid conducting business on Friday or during Ramadan; and never serve pork or alcohol.

• Courtesy and good manners will take you a long way including punctuality

• Use both hands when offering your business card

What are the cultural issues and etiquette in Singapore?• On first introduction and in formal meetings, use the person’s title

and family name, followed by his personal name, if he has a Chinese name; if he has adopted a western name, treat in the normal manner

• Malays do not use a family name. They use their personal name • Malays do not use a family name. They use their personal name followed by bin or son of and the father’s personal name

• The Indians use their personal name followed by son of and their father’s personal name

• Accept that since personal contacts are important in business it can take several years to achieve a relationship

• Singaporeans tend to get straight down to business in meetings; and can make decisions quickly

What are the cultural issues and etiquette in Singapore?• The advice is to talk straight and get to the point

• The expectation is to deliver what is promised on time

• Dinner is the occasion to develop and build relationships

• It or lunch is the preferred forum to breakfasts

• Conventionally the host will order the food but this may depend on • Conventionally the host will order the food but this may depend on the cuisine

• Business gifts are generally not exchanged and may be considered bribes; but if done, I suggest you keep them modest

• Observe the regulations of Singapore in other words respect their law and values

Why look at Singapore?

• The GDP growth of Singapore and local economies in 2013

– Singapore - 3.9%;

– Malaysia – 4.7%

– Indonesia – 5.8%

– Thailand – 1.8%

– Vietnam – 5.4%– Vietnam – 5.4%

• Compared with

– UK – 1.7%

– France – 0.2%

– Germany – 0.4%

– USA -1.9%

• Food for thought!

Why look at Singapore?

• Economic forecasts for 2014 may vary from this but a general message underlies the statistics

• Economies are growing in the East more quickly than the West

• With this comes potential opportunity for some but also risk and both need to be managed carefully

• For many sectors the East/West economies are contra cyclical


• SDI have an excellent network throughout Asia and are a natural starting point to look to.

• Their advice will be very valuable to you

My Own Story

• Developed and done business as a lawyer in Hong Kong, Taiwan, Singapore and China over the past 18 years

• To succeed relationships have to be built and trust developed – this takes time, patience and hard worktakes time, patience and hard work

• My approach, working with other professional disciplines, has always been to identify and work with prospective clients, corporate or individual, to deliver the investment of commercial objectives in or out of those countries into the UK – this involves listening rather than selling in the first instance.

My Own Story

• I have also put in place informal associations with law firms in Hong Kong and Singapore where we can work together on projects.

• This provides cohesive communication (in the case of China provision of Mandarin/Cantonese speakers and translation) and overall far greater risk management and quality of service to the client. client.

• This service can be provided at competitive fee structures, and with it bespoke assistance in helping you understand the issues which have to be addressed.

• It has proved a highly successful enterprise over many years.

What is so interesting about Singapore?• It is the gateway to south east Asia and the ASEAN countries

• In 2013 Singapore was the fourth largest offshore banking centre globally and it is expected to eclipse Switzerland by 2020 as the preferred tax haven

• English is the first language in Singapore and the language of • English is the first language in Singapore and the language of business

• It is pro-business and has a very stable government with excellent infrastructure

• It has a very competitive tax regime with its low rate tax and wide range of tax incentives.

What is so interesting about Singapore?• Its workforce is hardworking and skilled

• It is the only Asian country with a triple A rating and is one of the top international financial centres.

• It has a robust legal and judicial system and takes a tough stance on corruptionon corruption

• It is rated top in Asia and second in the world for intellectual property rights and protection

• It is also one of the cleanest cities in the world which is safe and orderly

• Population 5.3 million

Where does Scotland fit in?

There are a number of key industries common between the two which provides opportunities for both. They include

• Energy

– oil and gas where opportunities exist for Scottish companies to invest in

both upstream and downstream areas (eg deep water exploration, both upstream and downstream areas (eg deep water exploration,

drilling process/production management etc)

• Heavy engineering

– to provide technology, expertise and experience for ASEAN countries

renewable energy programmes

• Life Sciences

– More than ten leading pharmaceutical bio technology companies have

already established regional headquarters there

Where does Scotland fit in?

• Financial Services

– There are many large venture capital and wealth funds in Singapore,

creating asset management, treasury and risk management

opportunities for Scotland

• Scottish luxury products

– To service fast growing middle class which perceives Scottish goods as – To service fast growing middle class which perceives Scottish goods as

high quality

– ie textile design, hot weather cashmere, natural cosmetics,

confectionery, whisky, smoked salmon, breweries etc

• An important distribution hub for Asia

• Education

– Partnership the word here to provide Scottish post graduate

programmes and venture from there to other parts of Asia

Conclusion

• It is a two way street – matching skills and innovation against capital;

• There has to be something in it for those with whom one is engaging- so do not forget to listen.engaging- so do not forget to listen.

• By way of conclusion, cultural issues are intangible but carry value if taken on board and respected. It will enhance enjoyment in its own right but more important make the overall offering complete and if you get the ingredients right memorable!

www.andersonstrathern.co.uk


David Scott

Area Commercial Director

HSBCHSBC

Challenges of operating globally� Transactions

�Currency

� Challenges & issues in general

Singapore

David Scott, Area Commercial Director

Challenges of Operating Globally


Coffee breakCoffee break10 minutes


Case studies panel session

Real life stories & experiences shared


Gerry McCusker

Managing DirectorManaging Director

Dog Digital

Case study 1


This Morning’s Session

• Dog – who are we?

• Dog’s Choice

• Challenges of International Growth

• Dog’s Singapore Experience

• The Rearview Mirror


Your creative partner

in a Digital world.

Who are Dog

• Established in 1996


• Over 75 specialised staff

• International client base

• Award winning

• Continual growth with UK & Singapore offices


Dog’s Choice

• International Expansion

- What’s in each camp

- Who’s in each camp

• Where SDI gave us a little headroom


Challenges of growth

• Expansion

– Barriers are not always national– Barriers are not always national

• Growing pains

– Local and global

• Planned vs opportunistic

– Singapore or Asia


Dog’s Singapore Experience

• Setting Up Business- Language, Bureaucracy, Location

• Business Culture- Relationships, Reputations, Respect

• Business Support- SDI & GlobalScots- Singapore Govt & EDB


The Rearview Mirror

• Opinion

- Competitor

- Client- Client

- Staff

• Team & Trust


Simon Briggs

Sales DirectorSales Director

Loch Fyne Oysters

Case study 2

Doing Business in SingaporeSimon Briggs, Sales Director

Loch Fyne OystersJuly 2014

• Supplier of fresh and smoked salmon and farmers of oysters, mussels and other indigenous seafood.

• Loch Fyne operates a trade business, retail distribution, an online retail facility and event catering alongside its Oyster Bar, Deli, Smokehouse and Oyster and Mussel Farm.

• At the head of Loch Fyne on the West Coast of Scotland.

• Loch Fyne is the longest sea loch in the United Kingdom at 55 miles in length.

• An area with a low population density.

• No environmental pollution from industry.

• Ease of access to Glasgow International Airport with direct links to the global market place.

• EuropeAustria, Belgium, France, Germany, Greece, Italy, Jersey, Poland, Switzerland, Holland, Luxembourg, Spain and Portugal.

• Middle EastUnited Arab Emirates, Oman, Maldives and the Kingdom of Saudi Arabia.

• AsiaHong Kong, Macau, Malaysia, Japan, Philippines, Singapore, Taiwan, Thailand, Vietnam and China.

• AfricaSouth Africa and

Mauritius.

• AmericasBarbados and the

USA.

• Selfridges• British Airways• Qatar Airways• Cathay Pacific• Emirates• Classic Fine Foods Worldwide• Classic Fine Foods Worldwide• Jumeirah Hotel Group including

Burj Al Arab• Zuma Restaurant Group• Hyatt Hotels• Ritz Carlton Hotels• St Regis Hotels• F1 Paddock Club• UEFA Champions League Finals• Ocado• Costco UK

• Started exporting to Singapore in 1988 with Donald Russell Ltd.

• Supplied high quality Scottish beef, lamb and smoked salmon directly to hotels and restaurants including Raffles, Westin Stamford, Shangri-La Raffles, Westin Stamford, Shangri-La and Mandarin Oriental.

• Supplied clotted cream and strawberry jam for tea in the Tiffin Room at Raffles.

• Loch Fyne has been exporting a full range of products to Singapore for over 20 years, through a number of distributors and for the last eight years with our partners Classic Fine Foods.

• We have a strong relationship

with SDI in both Scotland and

Singapore and other key

markets around the world.

• We aim to help where and

when possible with inward and

outward missions, visits to

Loch Fyne and participation in

exhibitions and tastings.

• Make a business plan detailing what you want to achieve –including financials.

• Spend time finding the correct partner even if it takes longer –don’t rush.

• Understand your Logistics / Supply Chain (e.g. impact of Icelandic ash cloud, not able to travel impact of Icelandic ash cloud, not able to travel for Food Hotel Asia and no product could be delivered).

• Understand Importation/Documentary requirements and specifically AVA (Agri-Food & Veterinary Authority of Singapore) requirements.

• Ensure you have the correct packaging and specific labelling requirements for Singapore.

• Don’t do it on your own - get advice from SDI initially, research the market.

• Research your potential partners. Going with the wrong partner could, in the worst case, ruin your brand reputation and image or waste many months rectifying the damage of making an uninformed choice.choice.

• Get you and your brand our there.Visit Food Hotel Asia initially with SDI and then visit with your chosen partner and then their customers.

• Make sure you get paid and be aware of foreign exchange pitfalls/credit insurance/load over load etc.

• Be focused and do your homework. What you do want to achieve, by when and with whom?

• Don’t be afraid to ask for help and advice.advice.

• Don’t go to hotels directly but through a distribution partner. However that said I am still friends with chefs I supplied twenty years ago and who are still very influential in the Singaporean market place.

• Scotland’s Best Native Oysters 2011

• Scotland’s Best Mussels 2012

• Scotland’s Best Gigas Oysters 2013

• The Queen’s Award for Export Achievement 1994

• Queen’s Awards For Enterprise: International Trade 2014

• Scotland Food & Drink Excellence Award 2014 Kinglas Fillet

E: [email protected]

T: +44 (0) 7714 766051


Q&A panel session


End of event

THANK YOU!


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