The touristy island city of Singapore is one of the top startup ecosystems according to the Global Startup Ecosystem Report 2018. Singapore is a city and country both and an important economic center in the region. Moving to Singapore can be ideal for startups and startup job seekers looking forward to growing in a multicultural community with access to a diverse customer base. If you are one of them, here is a quick and definitive guide to help you make the shift to Singapore easier by understanding the benefits of Singapore’s startup ecosystem.
With a prosperous economy valued at $264 billion and an emerging startup sector, the city is on its way to becoming an important source of revenue for the country. It has a population of 5.5 million and has immigrants from several countries move to Singapore every year.
Tourism, logistics, banking and finance, and chemicals are some of the main industries in China contributing to its growth along with the prominent startup sectors in the city. Moving to Singapore is ideal for startups in the digital media, fintech, big data & analytics, and tourism sectors as these are few of the well-established ones in the city.
Singapore’s Growing Startup Ecosystem
There are several reasons why Singapore tops the list of cities for ease of business. The country has a long list of home-grown internationally successful startups despite its small size. The World Bank asserts that the country is one of the three places in the world to do business.
Singapore is the heart of all fintech activities in the region and has been attracting impressive venture capital funds in recent years. Let us look at the factors that make moving to Singapore worth the shift.
Startups in Singapore have Strong Government Support to Rely on
The struggle of moving to a new city to set up a business can be even more difficult when there are no special policies directed to the benefit of startups and entrepreneurs. Singapore recognizes this area of struggle and is helping to mould the entrepreneurial culture in the city through several startup-friendly policies and funding programs in Singapore.
Since fintech is the most prominent startup sub-sector in Singapore, most of these policies and grants are directed at the growth of the same. One such plan is by the Monetary Authority of Singapore, which has set apart a fund of $225 million for developing the fintech sector through the setting up of innovation centers and other similar institutions.
The government is trying to tackle the issue of high cost of living that may be a deal breaker for many foreign entrepreneurs and other talent planning to move to Singapore with its lenient tax system. Startups in Singapore can save a considerable amount of money in taxes with the Startup Tax Exemption Scheme (SUTE). This tax policy makes it much easier for entrepreneurs to set up a business that allows an exemption of $75000 on the first $100,000 for all eligible businesses and $50,000 of the next $100,000. Government-backed loans for SMEs are also an important form or supports startups moving to Singapore can enjoy.
The formation of government-run agencies like Enterprise Singapore who are helping propel the growth of the startup ecosystem has also been monumental. The agency helps and supports innovation and trade grow in the country by helping develop resilient industries.
Singapore has One of the Most Convenient Business Environments
Singapore is leaving no stone turned to ensure that it offers a conducive environment for startups. The city tops the list of countries for ease of business as the procedures to set up one here are fairly simple and quick. To incorporate a company in Singapore and get it registered takes much less than a week through a hassle-free process. The easy company registration process is open to both local and foreign entrepreneurs moving to Singapore. The rates of personal and corporate income tax make the business climate in Singapore even more favorable.
Move to Singapore for Easy Funding Access
One of the main reasons that foreign talent and startups are expanding to Singapore is due to the ease in reaching out to funding sources. Singapore is ranked in the top five countries globally by the World Economic Forum for its venture capital potentials and availability.
There are over 100 venture capital firms in Singapore. The country has an estimated $24 billion of venture capital available in 2013; this amount has grown exponentially with the growth of the startup ecosystem in the country. The city is also home to close to 6,200 angel investors. The strong network of venture capital and angel investors makes it easier for startups to get noticed by the right funding partners. Organizations like the Singapore Venture Capital and Private Equity Association also help in bridging any areas of funding gaps and helping its members find the right ideas to invest in.
Startups in Singapore Have Access to a Strong Workforce
The high levels of education in the people of Singapore and surge of startup talent moving to the city, has helped in the creation of a strong and resourceful talent workforce. Moving to Singapore works very well for startups that require a lot of skilled labor as it is easily available.
The strong and talented workforce in Singapore can also be attributed to the students of the many industry-specific institutions that have been set up or partnered with by important agencies in the country for encouraging entrepreneurial activity in the region. For example, the Monetary Authority of Singapore has collaborated with five polytechnic colleges in the region to offer a better learning experience and equip them with all the necessary skills and knowledge that can make them startup worthy.
Startup Incubators and Accelerators Galore in Singapore
Startups moving to Singapore and struggling to launch their business can always turn to the myriad of startup accelerators and incubators in the city. These organizations offer a wide range of support to fast-track the entrepreneurial journey of its participants by connecting them to the right resources.
A Tech Sector Growing by Leaps and Bounds in Singapore
The tech sector, particularly the fintech segment, has been thriving spectacularly in Singapore. The government’s effort to ensure that at least 1% of the GDP is spent in R&D has also helped in shaping the strong tech-based startups in Singapore. Two sub-sectors outdoing the others after fintech are big data & analytics and digital media.
Singapore’s Fintech Prowess helps Startups
Singapore has been the flagbearer of all major fintech startup activities in Asia. The fintech startups in Singapore had a 6.7% share in the total local venture capital investments in the years between 2012 and 2017. The segment comprised of 270 startups, 20 international banks, and several insurance companies. Both B2B and B2C fintech startups have a good scope of growth in Singapore.
Notable funding rounds of startups include Quoine, a bitcoin trading platform that raised $16 million; Nera Payment Solutions that was acquired for $67 billion; and WB21 an online bank that raised $62 million in Series A round.
Big Data & Analytics Sub-Sector with International Presence
This sub-sector is growing at a tremendous rate and has been getting 5% of the total local venture capital investments between 2012 and 2017. The presence of international Big Data players like Palantir and Spire has further fuelled the growth of the sub-sector.
Eyeota, a data provider company has been in the spotlight recently with its Series B round of funding of $12.5 million which it raised at the beginning of 2018.
An Established Digital Media Sub-sector in Singapore for Startups
Digital media is one of the top sub-sectors within the tech niche in Singapore in terms of the funding received. The sub-sector got 10% of the total local venture capital in the last six years and notable startups like Sea that raised $550 million in May 2017 in Series E round of funding and went on to offer IPO at the New York Stock Exchange for $884 million later that year. Formerly known as Garena, Sea is a mobile and online entertainment company.
The role of ecosystem partners like co-working office brands has also been key for the growth of the startup ecosystem in Singapore. With agencies like Enterprise Singapore which is also a Startup Genome Member and the contribution of partners like 500 Startups, Trendlines Medical Singapore, and ACE, the ecosystem is poised to rise over most of the regional ecosystems in no time.