Top 10 Challenges of Doing Business in Singapore
Singapore has achieved accolades from the World Bank and International Finance Corporation (IFC) for being the easiest place to do business for several years in a row. The country is also well known for its friendly taxes, great government support, well developed infrastructure, and strong protection of intellectual properties, all of which make doing business in Singapore a very smooth operation. Nevertheless, doing business in Singapore is not devoid of challenges, be it the high costs of operations, tight quotas on employing foreigners, and more.
So, what are some of the challenges of doing business in Singapore? Here are some of the top challenges:
High running costs
Compared to other states in Southeast Asia, the cost of establishing and running a business is somehow higher in Singapore. Due to its high cost of living, staff costs are higher. Also, paying foreign employees in local currency is a bit expensive due to the strength of the Singapore currency. The costs of rent are also high due to limited space, owing to the small size of the country.
Singapore is a converging point of various cultures. Non-Singaporeans are bound to experience cultural differences, and no matter how slight they are, they must be respected. For example, adhering to hierarchy both in private and public institutions is critical. Also, the concept of “protecting the face” is very important, as one is expected to control their behavior and emotions in public and avoid open confrontation and criticism. Failure to observe this cultural expectation could ruin business relations.
Meetings are common
Meetings are common in business and corporate settings. People from places where communication is more non-personal may find it somewhat odd. However, one is expected to attend the meetings at various levels. All the same, it is not all dull, since after meeting and convincing various people of your business ideas, things move pretty fast.
High exposure due to an open economy
The country is a gateway to trading with Asia and with all other regions. Due to the openness and great interaction with other countries throughout the world, this country is much more vulnerable to global economic forces.
Business requires building relationships
Building relationships is very much emphasized in Singapore, making it necessary to avoid rushing the transaction process and first creating strong and cordial bonds. Those who are accustomed to quick business based on the facts and figures involved may find this a bit slow and out of place.
Complex property registration process
The process of registering property may seem complicated, especially when it comes to paying the fees. The requirement to conduct a number of different online searches from various government departments and bodies, such as the Ministry of Environment, the Inland Revenue Authority, Urban Development Authority, and others, may take a few days. People who are new to the system may find it intricate and demanding.
Foreign labor issues
Government restrictions on the hiring of foreigners, including imposing quotas, high foreign workers’ levies, and requiring that the firms first give locals a chance to apply for high-cadre jobs before hiring non-Singaporeans, have caused several issues. Some sectors of the economy, such as hospitality and retail, have suffered due to high labor costs and a shortage of employees, as locals are not willing to take these less prestigious jobs. Nevertheless, you can start your business in Singapore and follow the due procedure to bring your staff from abroad there. To incorporate your business in Singapore and get advice on various immigration issues, engage the experts of Singapore Visa Express, who have vast experience and will see you through the processes without hassle.
Inadequate government assistance
How can government assistance be ineffective or inadequate, as they offer so much assistance? The government offers financial support to small business through various bodies—IDA, IPOS, SPRING, IE Singapore, and more. The problem is that with so many schemes across several statutory bodies, one must be aware of what they are looking for to apply. You may qualify for one and not the other, and without a collection of all the schemes, it may be a tall order to identify where you qualify. The other problem is that the help is mainly monetary, so those in need of more help may not be well catered to.
Widening income inequality causes anti-foreigner sentiments
Although the city-state is very accommodating for nationals of other countries, having non-locals occupy a reasonable chunk of the best jobs may not go over so well with the locals. However, there has been legislation to check on this, and the government has put in a lot of effort to educate and train the locals.
The scarcity of land
The land is very limited due to the small size of the country and the strategic location of the port. Due to this, property prices are exorbitant. Renting business premises is also very costly, which further increases overheads. It is hard to put up a factory or find space for things like retail business.