As well as being the United Kingdom's largest trading partner in ASEAN, the recent flurry of activity between the two countries has strengthened Singapore's role as a hub status for British businesses.
According to David Kelly, executive director at the British Chamber of Commerce Singapore (BritCham), the chamber's trade services team, which supports small and medium-sized British companies looking to export products and services to Singapore, has helped around 90 companies since the UK-Singapore Free Trade Agreement (UKSFTA) was signed in December 2020.
"Singapore is a country of 1's and 2's - the most competitive economy, number one in the Asia-Pacific for talent competitiveness, number one in the Asia-Pacific for digital competitiveness and the second most connected country in the world - it is attractive for companies to base their regional hubs here, create jobs and utilise Singapore's connectivity with the rest of the ASEAN region," says Mr Kelly.
Indeed, a poll conducted by the chamber earlier this year showed that members continue to be interested in the ASEAN region, even despite resurgent waves of Covid-19.
The BritCham, which is 3,500 members strong from 320 member organisations, among other things offers a suite of services to British businesses considering expansion into Singapore.
This covers the entire life cycle from early-stage interest to welcoming new entrants in-market.
"It is common for our conversations with interested exporters to span beyond Singapore into South-east Asia, where our network of Britain in Southeast Asia (BiSEA) Chambers is ready to support exporting businesses," notes Mr Kelly, adding that Singapore continues to be perceived as the primary entry point for the region and a gateway to Asia.
"It's not only about exports - Singapore plays an important role as a regional hub, and we help to connect businesses via the Britain in Southeast Asia (BiSEA) network. Programmes such as Singapore's SEA Manufacturing Alliance, launched by the Ministry for Trade and Industry - the agreement between EDB, Enterprise Singapore and private sector partners to promote a network of industrial parks to manufacturers who are interested to invest in both Singapore and the region, and we hope to help support programmes such as this," he notes.
A strategic base
Notably, the wider swath of European companies are also actively looking to expand in the region.
Among the European corporates keen to tap Singapore for expansion opportunities, 77 per cent said they expect to leverage the city-state as a regional headquarters for their sales and marketing and corporate functions as they look to expand across ASEAN according to a survey commissioned by Standard Chartered1.
This is unsurprising given that within ASEAN, Singapore tops the exports destination list, receiving over a third of European exported goods (US$41.8 billion in 2020), noted Standard Chartered in its report, Borderless Business: Europe-ASEAN corridor2.
Singapore was also notably the first ASEAN nation to have an FTA with the European Union (EU) when the EUSFTA was signed in 2018. Since being enforced in November 2019, goods exported from Singapore to the EU jumped 12 per cent in the first half of 2020, despite Covid-19 disruptions.
Indeed, almost nine in 10 European companies (88 per cent) focusing on ASEAN said they expect business growth in the region over the next 12 months. These companies view Vietnam, Malaysia and Thailand as markets that will present the most expansion opportunities in the region.
For British companies specifically, the recent raft of agreements signed between the two countries has been a boon.
On June 30, the two countries announced they have agreed on a partnership for financial services which will allow for greater cooperation such as in enhanced information sharing and regulatory deference.
Senior Minister Tharman Shanmugaratnam, who is also chairman of the Monetary Authority of Singapore, signed a memorandum of understanding with Britain's Chancellor of the Exchequer, Rishi Sunak.
An additional memorandum of understanding on cybersecurity was also signed, providing a formal basis for cooperation between the UK and Singapore on the finance sector's cybersecurity, in order to improve the resilience of both nation's financial systems.
This is in addition to the UK-Singapore Digital Economy Agreement (UKSDEA) - which will be the first such agreement between an Asian and a European country - which the two countries launched negotiations on June 28.
Indeed, the UK has been actively working to establish formal bilateral trade relations since leaving the eurozone.
The UKSFTA for instance, which kicked into effect from January this year, was designed to allow the UK to enjoy the same benefits it did under the EUSFTA.
It is expected to be an additional platform for driving British exports into Singapore and allowing British companies to leverage the city's growing regional connectivity to solidify their presence in ASEAN.
Notably, some sectors that are receiving more attention than most include technology and Internet-enabled businesses, financial services, and pharmaceutical and medical, points out Charles Ferguson, general manager, Asia-Pacific at Globalization Partners.
"Singapore is the UK's largest trade and investment partner in South-east Asia. I think it rightfully deserves its hub status in the region for UK businesses. Given Singapore's strategic geographical location and vital role as a financial and trading hub, the city-state gives the UK access to immense opportunities in this fast-growing region," he says.
"We see this truth in our engagements with UK companies who are tapping our global expansion platform and employment solutions to get the best talent on board as they increase commercial ventures in territories like Singapore, Malaysia, the Philippines and Vietnam. We see brisk expansion activities in sectors like technology and Internet-enabled businesses, financial services, and pharmaceutical and medical, among others," he said.
There has also been a notable uptick in fintech activity, says Mike Rourke, head of digital onboarding, digital channels and data analytics, commercial, corporate and institutional banking at Standard Chartered, and chair of the BritCham Financial & FinTech Committee.
"The UK and Singapore are incubators for some of the leading and fastest-growing fintechs globally. Members are seeing not only an increase in innovative fintechs but also are driving up their active partnerships and collaboration with them to support their business strategy," he says.
One example of this is Tech Nation, a growth platform for tech companies focused on accelerating the growth of digital businesses in the UK.
Max Pourrat, head of Asia-Pacific at Tech Nation, says: "South-east Asia's digital economy hit US$100 billion in 2020 and is expected to grow to US$300 billion by 2025 - and Singapore is at the heart of it. With a rapidly evolving tech ecosystem, Singapore is an attractive hub for UK scale-ups to access the huge opportunity in South-east Asia and the wider region, which is why Tech Nation has also recently set up our Asia-Pacific headquarters here."
Tech Nation has already led the first cohort of International Growth Programmes in Singapore, alongside Australia, Japan and South Korea, with 30 UK scale-ups joining the programme. Due to high demand, an additional 45 companies are also receiving support on their go-to-market strategies and international fundraising tactics to ensure their international readiness.
Source: The Business Times © Singapore Press Holdings Limited. Permission required for reproduction.