Singapore beckons Kiwi businesses
When the Ease of Doing Business 2015 rankings came out, New Zealand had inched up a spot to number two worldwide. But the country ranked number one, for the ninth consecutive year, was Singapore (www.doingbusiness.org/rankings).
Yet in many ways Singapore looks at New Zealand with fondness bordering on envy. Singapore’s president Tony Tan said in October this year: “New Zealand is a very good example. Far away from the rest of the world, small population, yet they manage to throw up world-class individuals, like Peter Jackson and Richard Taylor. It changed the way that people look at animation and how stories are told for a worldwide audience. We can't have Lord of the Rings in Singapore, but we can have Lord of something else!”
Immigration New Zealand recently made a call for Singaporeans to emigrate with the cheeky ‘New Zealand is less hot and humid’ campaign! This, in fact, was a repeat of a 2010 call, which has since seen 20,775 Singaporeans become permanent residents of New Zealand. As of 2015, the corresponding number of Kiwis in Singapore stands at 4,000.
So what is the attraction that Singapore holds for businesses from New Zealand?
Let me list two obvious ones.
1. Availability of strong venture capital
From early-stage to growth companies, Singapore venture capital firms deployed more than US$1 billion in 2014. While data for 2015 is not yet available, indicators point to a sustained upward momentum in these figures.
Developing a presence in this part of the world is one of the most practical ways to catch the eye of these VCs. Ask the three entrepreneurs from New Zealand who founded TradeGecko, a cloud based inventory management tool, in Singapore and raised US$6.5 million from local venture capitalists here early last year.
2. Arguably the easiest part of Asia to do business
This is an easy argument to win when you consider the rankings! In Asia, the Singapore market might also bear the closest resemblance to home. It is already the seventh largest export destination for New Zealand businesses (www.nzte.govt.nz/en/invest/statistics/).
Singapore also acts as a good base to branch out into the rest of the ASEAN region. Most countries in Southeast Asia prefer doing business with Singapore registered entities due to the perception of being better regulated. Singapore holding companies are usually part of the recommended taxation structuring for further expansion into the region, given the strong network of double-taxation avoidance agreements Singapore has in place.
Once you have made the decision to expand, as you start to plan operations in Singapore, one of the first hurdles to get out of the way are the legal issues. There are some excellent resources available here; one that comes to mind is Lee Bagshaw of Wellington law firm Simmonds Stewart, who was in Singapore prior to his move to New Zealand, and can act as an excellent bridge between the two jurisdictions.
What Futurebooks does for clients as they set-up in Singapore is simplify operational matters of incorporation, taxation registration, customs, hiring, and so on. Some of our main software partners are from New Zealand – for example, we are gold partners of Xero.
Other tools we use are Wellington-based Spotlight Reporting for forecasting and multi-entity organizations, as well as Debtor Daddy and WorkflowMax for timesheets and job costing.
The New Zealand Chamber of Commerce in Singapore is a good platform to connect to fellow New Zealand entrepreneurs and learn about doing business in Singapore.
Chamber member and friend of Futurebooks, New Zealander Joseph Barratt, founded Mutant Communications, a public relations and content marketing agency based in Singapore that counts monster.com and Singapore Yacht Show among its clients. Founded in 2012, the start-up received a funding from serial entrepreneur and investor Harry Dewhirst in 2015.
Another Singapore-registered business run by Kiwis is neXtep Business Builder Community. neXtep provides business advice to entrepreneurs based on their company’s financials. The founders Graeme Stevens and Gwyn Thomas re-located to Asia in 2014 and are now preparing their product for launch and looking for the right investor. What’s interesting is that they have personally chosen Bali as their base to work out of, while having the registered business entity in Singapore.
The call of Singapore is strong for New Zealand businesses and their founders – no matter if you’re looking at the numbers (the tax rate is 17 percent tops, usually way lower) or the lifestyle (Singapore’s night-life is absolutely fabulous!).
Namita Sethi is a CPA (AU) based in Singapore, and CEO of Futurebooks – a boutique management consulting firm that assists businesses set up in Singapore, as well as manage ongoing compliance and accounting matters.