Despite reputation, Singaporeans don’t think it is easy to start a business in the city: Report
But when they do start companies, Singapore entrepreneurs have a firm understanding of the need to sell across borders
Singapore is consistently considered one of the best places in the world to do business. The World Economic Forum ranked the city-state as the third most competitive economy in the world, slightly behind Switzerland and the US.
However, according to a new report from Stripe, local companies may not necessarily be experiencing that reality. Only 40 per cent of Singaporeans told Stripe, “It is easy to start a business in my home country.” This despite it only taking 2.5 days to start a company in Singapore.
Japanese had the highest perception of starting a business in their country, at 77 per cent, but it takes 12.5 days to start a company in Japan. Hong Kong had both the fast time to start a business (1.5 days) and ranked second in perception of starting a company (57 per cent positive).
That being said, once Singapore companies do get their enterprise rolling, they are keenly aware of the need to sell their product/services beyond the city.
88 per cent of Singaporean companies cross borders to sell goods — which is tied for the world’s top-spot with Hong Kong. This makes sense considering the similar economic infrastructure of the two cities. They both are small-but-wealthy markets with a huge logistics industry that has transformed the island cities into international trading hubs.
This bodes well for building a culture of international commerce.
Other countries that ranked high were Japan, France, Italy and Spain.
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One interesting fact is that China ranks extremely high for an economy of its size (74 per cent of companies sell abroad). The US is much lower at 45 per cent.
This is important because, according to Stripe, companies that move fast to sell abroad grow more quickly (7x for slower companies compared to 9x for faster firms).
“There’s a logic behind the urge to expanding internationally quickly: it correlates with longterm economic success and productivity. Over the last five years, firms that expanded internationally during their first year grew 141 percentage points faster in revenue and 15 percentage points more quickly in headcount than the ones that were slower to reach international markets,” the report reads.
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Unfortunately, choppy trade waters have made globalisation more of a challenge for online companies. 42 per cent of respondents said doing business is getting harder these days.
In the conclusion of the report, Stripe notes that this burden falls largely on SMEs, who do not have the finances to pay for a legal team that could help them navigate increasing government restrictions.
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