When people think of the tech sector, they will almost inevitably think of Silicon Valley. However, the most forward-thinking investors have already turned their attention to the rise of what lies beyond California.
Southeast Asia’s 650 million-person market has already captured substantial attention and funding from the global tech industry, befitting its status as the world’s fifth-largest economy. Of course, Southeast Asia as a concept covers many countries, laws, and norms, meaning it requires a gateway hub for investors to set up headquarters.
Singapore has already emerged as the premier gateway to this flourishing region for tech, and for good reason. With its strong infrastructure, business-friendly environment, and genuinely strategic access to Southeast Asia’s burgeoning markets, Singapore is set to be the epicentre of this technological boom.
This article delves into why Singapore is the ideal launchpad for high-tech enterprises looking to expand into Southeast Asia, showcasing its role in developing innovative tech ecosystems, and fostering the ideal investment environment wishing to enter the ground floor of this market.
The Rise of Southeast Asia
Southeast Asia, with a population larger than the United States, is a hotbed of economic growth and innovation. The region’s rapid development and the promise of wide-ranging opportunities inspire astute investors worldwide to explore its tech sector, which is quickly becoming a magnet for the global tech industry.
The digital economy here is booming. Across Southeast Asia, countries are making impressive strides in sectors like e-commerce, fintech, AI, and gaming. This technological surge is offering vibrant entrepreneurial ecosystems, thanks to swift digital adoption and an actively supportive regulatory landscape.
Crucially, Southeast Asia’s economic influence is not limited to its borders. The region contributes 8% of global exports and attracts 10% of foreign direct investment, and its collective market value is predicted to hit S$1 trillion by 2030. This growth is largely driven by a rising middle class (expected to be 396 million people by 2030) and an ever-increasing embrace of digital technologies.
In the midst of this lightning-fast development, the Lion City has set itself as the ideal gateway to Southeast Asia. Singapore’s strategic location within a 6-hour radius of any Southeast Asian country and world-class infrastructure offer unmatched access to these markets, making it the ideal base for investors keen on tapping into Southeast Asia’s tech potential.
Capital Deployment in Southeast Asia
Capital inflow has been key in shaping Southeast Asia’s swelling tech landscape. Despite the challenges posed by the COVID-19 pandemic, the region has witnessed significant venture capital (VC) and private equity investments, highlighting its resilience and growth potential.
During the pandemic, the region saw nearly $15 billion in VC and private equity deals, highlighting investor confidence in its tech ecosystem. In the first half of 2022 alone, firms closed 23 funds, raising a total of S$3.03 billion — outperforming the capital raised for all of 2021. This trend reflects the region’s ever-robust investment landscape and its ability to attract considerable funding even in challenging times.
Despite the recent global funding downturn, Southeast Asia’s tech startups have demonstrated resilience raising $516 million in tech startup funding in the first quarter of 2023 alone. This resilience is a testament to the strong foundations laid by Southeast Asia’s tech ecosystem, which continues to draw investor interest and capital.
Singapore’s Unique Position
Singapore has contributed greatly to Southeast Asia’s growth. Widely seen as Asia’s financial centre since Hong Kong’s political issues, Singapore has raised an impressive S$26 billion in venture capital over the last four years, significantly higher than the global average of $6.6 billion.
As the clear gateway to Southeast Asia for both local and international entrepreneurs, Singapore attracts two-thirds of the region’s total VC funding. Additionally, 46% of Asia’s regional headquarters for multinational corporations are based in Singapore, alongside more than 4,000 tech startups. This concentration of financial and entrepreneurial activity already positions the city-state as the cornerstone of Southeast Asia’s tech investment sector.
Singapore’s Government Support and Talent Ecosystem
Singapore’s ascent as a leading tech hub cannot be attributed to its financial prowess alone — its robust government support and rich talent ecosystem contribute much to its attractiveness for tech investors. The city-state has implemented purposeful initiatives to attract and nurture high-tech enterprises, creating a business-friendly environment that fosters innovation and growth.
Singapore Government Policies and Support
Singapore’s government has been instrumental in supporting startups and tech companies through various initiatives. Agencies like the Singapore Economic Development Board (EDB) provide comprehensive support, including funding, tax incentives, and streamlined regulatory processes.
The EDB enables residency for global founders with programmes like the ONE Pass, a five-year visa that includes spousal privileges, and the Tech.Pass, a specialised two-year visa for tech leaders. Additionally, the Tech@SG programme fast-tracks work visa applications for core team members of qualifying companies, making it easier for startups to establish and scale their operations in Singapore.
Finally, one cannot overlook Singapore’s extensive trade agreements. The country has double double taxation agreements (DTAs) with 106 countries, eliminating double taxation on those cross-border transactions. In addition to DTAs, Singapore has 27 free trade agreements (FTAs) covering about 60% of the world’s GDP.
Singapore-based businesses can enjoy closer trade connections with key trading partners through the Regional Comprehensive Economic Partnership (RCEP). Beyond the region, they can also benefit from trade connections with other major economies, such as China, through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Singapore Talent and Training
Singapore boasts a world-class talent pool, bolstered by major multinational technology companies such as Mastercard, Meta, Google, ByteDance, Microsoft, and Pfizer, which have all relocated their regional headquarters to Singapore in recent years. This influx has enriched the local talent landscape, creating opportunities for local and international professionals.
From 2015 to 2020, the city-state invested over $700 million in education and training, including the SkillsFuture initiative. This initiative provides Singaporeans with the opportunity to develop their skills and knowledge mid-career, to help them stay competitive in the ever-changing global economy.
Singapore Success Stories
Singapore’s supportive environment has already led to the success of numerous tech companies. For instance, Ohmyhome, the first Singaporean company listed on the Nasdaq, has leveraged the growing housing demand driven by ASEAN’s rising middle class.
Similarly, Doctor Anywhere, a healthcare technology platform, raised $65 million in series C funding on its promise to address regional healthcare challenges by integrating various essential functions into its services.
Where to Next With InCorp
Business opportunities in Southeast Asia have increased significantly, with the region boasting remarkable growth in the past decade and attracting record investments from worldwide. We have shown its rapid expansion in the tech space, making it an attractive region for investors. With its 650 million-person market and booming digital economy, the possibilities for business growth are immense.
We have also demonstrated that Singapore stands out as the prime base for accessing these opportunities, thanks to its strategic location, world-class infrastructure, and pro-business environment.
Singapore’s regulatory system is designed to offer motivated market entry for tech companies, with programmes and incentives from agencies like the EDB. However, entering a new market, however transparent, can still be complex. This is where a trusted advisor like InCorp is invaluable.
InCorp offers expert guidance to help you leverage Singapore’s advantages and smoothly enter the Southeast Asian market. With InCorp’s support, you can confidently navigate regulatory requirements, tap into local networks, and maximise investment potential. For more insights on capitalising on tech opportunities in Southeast Asia and setting up your base in Singapore, contact InCorp today.
FAQs about Tech Opportunities in Singapore
- Singapore offers strategic access to Southeast Asia’s 650 million-person market, robust infrastructure, and a business-friendly environment, making it the perfect launchpad for high-tech enterprises.
- The Singapore Economic Development Board (EDB) provides funding, incentives, and streamlined regulatory processes. Programmes like ONE Pass, Tech.Pass, and Tech@SG facilitate residency and work visas for global founders and tech leaders.
- Singapore boasts a world-class talent pool enriched by the presence of major multinational companies and substantial investments in education and training, such as the SkillsFuture initiative.
Let our incorporation experts lead the way
About the Author
