Singapore is among the leading positions in ASEAN business expansion

The UOB Business Outlook Study 2024 found that Singapore has emerged as a key player in the ASEAN market for small and medium-sized enterprises (SMEs) and large enterprises in Southeast Asia and Greater China looking to expand overseas.

A survey was conducted among enterprises in seven major markets across ASEAN and Greater China. Over 80% of them indicated a keen interest in expanding internationally and nearly 80% expressed optimism regarding the current business landscape, despite worries about inflation, escalating operational expenses and a potential economic downturn rebound. One in four anticipates a substantial enhancement in business performance for the ongoing year. Indonesian and Vietnamese companies showed the greatest interest in expansion.

ASEAN became the main market for expansion, with Malaysia first followed by Singapore, Thailand and Indonesia. Only a third of companies expressed interest in entering mainland China.

Expanding internationally most often brings with it troubles that businesses face. To ease market entry, many need to secure extra funding, forge alliances with larger corporations and access tax incentives. About four in five companies said they were interested in using cross-border digital trading platforms for their overseas expansion.

While 90% of businesses recognize the importance of sustainability, only 44% have implemented sustainable practices. Only 38% of SMEs in Singapore use such practices, compared with about half in Thailand and mainland China. Businesses are also calling for support in the form of tax breaks, sustainable finance and easier access to grants to promote sustainability.

Another survey from HSBC showed that more than a third of international firms with an in-market presence say they will prioritize their growth in Singapore over the next two years.

Specifically, 36% of companies with operations in Singapore stated they have business expansion plans there, followed by 27% for companies in Malaysia and 24% for those in Thailand. The survey, which polled 3,509 businesses across various countries including Australia, France, Germany, Hong Kong, India, mainland China, the UK, the US, as well as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, highlighted several advantages Singapore offers over its competitors. These include a skilled workforce, a growing digital economy, a well-developed infrastructure, a supportive government and regulatory environment and ease in supply chain management.