Singapore emerges as a premier business hub in Asia-Pacific despite challenges

Despite its modest size and population of 6 million people, Singapore has succeeded in providing the best base for businesses. The country is home to more businesses in this year’s Asia-Pacific fast-growing companies ranking than any rival city.

Singapore is a trade hub between East and West. It also occupies a leading position for entrepreneurs and investors due to its strategic location in Southeast Asia, supportive government policies, strong legal framework and mix of local and foreign workers.

Singapore’s neutral status between the US and China enhances its attractiveness as a base for business. The city-state also has 93 businesses in the FT’s ranking of high-growth companies in Asia-Pacific, placing it ahead of Seoul and Tokyo.

Growing companies in Singapore, including manufacturing, artificial intelligence, software, commodities and healthcare oriented, are very diverse and highlight the breadth of businesses that the city can support.

Co-founder of Lionsbot, Dylan Ng, calls Singapore “the Switzerland of Asia” because it is a neutral country with a strong talent pool and a perfect reputation for compliance with the law, making it an ideal base for a company that wants to expand into global markets.

Lionsbot, based in Singapore, does not limit its activities to the confines of the thriving city-state. In fact, the majority of the company’s clients are already located abroad, and Lionsbot is actively targeting expansion into new markets.

Raising $35 million in Series A funding last year was a powerful catalyst for this growth. This investment allows Lionsbot to expand its capabilities, develop new models of cleaning robots and expand into new markets such as the US and Europe.

Many companies that do not do business in Singapore, such as iCare and Skrya, describe the benefits of using it as a base.

iCare is the Cambodian affiliate of the iCare Benefits Group, which provides access to basic but life-changing appliances to low-income female factory workers in developing countries including Laos and Cambodia.

According to co-founder Pablo Alonso Caprile, having a branch in Singapore provides a “level of security” and also simplifies paperwork and reporting, which provides comfort to investors.

Singapore plays a special role for iCare, not only as a fundraising hub but also as the home of many of the company’s investors. Caprile frequently visits Singapore to personally interact with investors and gain their support.

Skrya is a company that uses new technologies to recycle metals without harming the environment. It also earns most of its income outside the city-state. Skrya helps customers recycle materials through its Catalopedia app, which uses artificial intelligence and 3D to find the best prices.

According to Sivakumar Avadiar, chief executive officer, the company is profitable and has several facilities and a team of about 10 employees in Singapore. But the company plans to expand internationally this year by opening a new plant in India, which could add another $30 million to $40 million in revenue, Avadiar says.

Singapore’s stable reputation and ease of starting a company made it a top choice as a base, he adds.

However, Singapore companies, both large and small, are facing challenges due to rising costs, especially for labor. This was shown by a survey of business sentiment by the Singapore Business Federation in January.

Even for tech startups like X0PA AI, the situation has become more complicated. The company uses artificial intelligence and automation to help it recruit but has had to take a step back and focus on more sustainable growth.

X0PA AI is currently in the process of raising its second Series A round of funding. The company expects to break even this quarter and be profitable by the end of 2024.

Singapore is X0PA AI’s largest market, but the company now focuses on growth in Europe, the Middle East and Africa, and the US.

Despite the challenges, many Singaporean companies see opportunity in their small home market. For example, Doctor Anywhere, which began as a telemedicine startup, is now growing rapidly offline.

Doctor Anywhere sees opportunities to replicate its services in other countries in ASEAN, such as Malaysia and the Philippines.

Overall, Singapore companies have demonstrated resilience and a desire to grow despite challenging economic conditions.