The Insider View: Singapore
Singapore can claim to be one of the most dynamic business centres on the planet, offering a key regional trading venue, the world’s busiest container transhipment port and a popular investment destination.
It is known for being a leading financial hub, with more than 500 big financial institutions operating on the island, and it hosts the fourth-largest forex trading market after London, New York and Tokyo.
Last year the city state topped Grant Thornton’s second global dynamism index, an annual survey covering aspects such as economic growth, human capital and the financing environment.
Singapore’s leading position reflects its favourable conditions for business: it ranks highest in terms of the quality of the financial regulatory system, the level of private-sector credit and the lightness of the tax burden (corporation tax is 17 per cent).
Grant Thornton’s research report states: “Singapore is perfectly placed to act as a gateway between West and East. Business and economic growth prospects are supported by an open, transparent financing environment and a well-educated workforce.”
Singapore benefits from a number of other factors, including its multicultural environment, pleasant climate and relatively low political volatility, observes Yi Cai, ACMA, CGMA, finance business partner at Rolls-Royce Singapore.
“It has a well-developed infrastructure and a good pool of skilled labour,” she says. “Also, having English as the official language here makes it convenient for many multinationals to set up their regional HQs here as their base for doing business in Asia Pacific. The government’s policies and regulations are similar to those in the West and they’re quite transparent.”
The government has done an excellent job in promoting and “reinventing” Singapore with a policy that encourages regular foreign investment, according to Naresh Kalani, ACMA, CGMA, a service director at Schindler Lifts in Singapore.
“A good example of this is the development of the Marina Bay Financial Centre, which has attracted leading multinationals, banks and legal firms,” he says.
“As well as continuing to be the hub for business across the broader region, Singapore has invested heavily in its financial services, manufacturing and hospitality industries,” reports Hugo Walkinshaw, FCMA, CGMA, executive director at Deloitte Singapore.
“When you add to that the advantage it holds with its infrastructure, legal system, talent pool and favourable tax regime, it’s no surprise that Singapore remains a focal point.”
Singapore's competitiveness is reinforced by a strong focus on learning, which has translated into a steady improvement in the standard of higher education and training in recent years.
The combination of a skilled workforce and large numbers of expatriate workers at multinational companies based in Singapore has made for an increasingly diverse business culture.
“While management styles vary from business to business, the general focus is on developing a good team with an execution culture,” Kalani says.
“The government is encouraging companies to improve productivity and reduce their reliance on foreign labour. Singapore also has a strong legal framework that supports fair and ethical business.”
Cai reports that the culture of the Singaporean operations of a multinational company will normally match that of the parent company’s home country.
“For example, the business culture of a US multinational here would be typically American – efficient and fast-moving – whereas that of a European firm would offer a little more work-life balance,” she says.
This makes for a mix of styles based on whether you are working for a multinational corporation, a large local company, a smaller firm or a public body, according to Walkinshaw, who stresses that establishing personal contacts in Singapore “is very much part of the culture. In an increasingly competitive environment, building and maintaining relationships is essential here.”
CIMA SINGAPORE has identified five key factors that foreign firms and workers should bear in mind when operating in Singapore:
It’s important to develop a good rapport with others before doing business with them. This is often an unhurried process, as Singaporeans are cautious by nature and like to ensure that they are trading with a trustworthy partner. Investing time in creating strong ties from the start should benefit you in the long term.
This is about promoting the good of the group over that of the individual – the family is held in high regard here. Although the concept of harmony is quite a collectivist notion that’s prevalent in this part of the world, Singapore can also be quite individualistic in some ways.
East meets West
A relatively young country, Singapore draws influences from both hemispheres and is well placed to do business equally successfully with either. The most developed country in South East Asia, it strikes a balance between traditional and modern; Eastern philosophy and Western technology.
When communicating with Singaporeans, it is wise to heed the importance of preserving “face”. This is closely linked with pride and forms the basis of an individual’s social status. In order to avoid losing face, Singaporeans control their emotions and do not criticise others directly in public. It is wise to remember that being overtly confrontational here can be disastrous for a relationship.
Singapore’s diverse population is one of its strengths. Singaporeans are predominantly of Chinese, Malay and Indian ethnicity and, owing to the nation’s open immigration policy, a third of people here have come from abroad. But, to be successful when doing business in Singapore, it is important to appreciate the many different traditions that inform business culture and etiquette here.