Singapore shines as the Regional Hub for Global Businesses
Singapore, a well-established hub for international companies with operations in ASEAN, continues to attract investments. Nearly half (46%) of international companies surveyed already have operations in Singapore, more than any other markets in the region. Singapore is also well ahead of its ASEAN peers as a priority for expansion: 36% of firms with presence in the City-State are planning to prioritise their growth in Singapore over the next two years.
The survey also delved into key factors that makes Singapore appealing to global businesses. Essentially, those surveyed cited Singapore’s skilled labour force (30%), developed infrastructure (29%), and growing digital economy (29%) makes it an attractive location for expansion.
Singapore’s reputation offering a stable operating and business-friendly regulatory environment remains a key factor that draws global businesses to the country. It is especially important to mainland China-based companies where 36% of them cited Singapore’s stability as a key factor which encourages them to make further investments. Similarly, 42% of India-based companies are drawn to the business-friendly regulatory environment that Singapore offers.
Singapore’s leadership on sustainability issues is a positive for many businesses. One in four (24%) say Singapore’s ESG, sustainability and net-zero ambitions make it particularly attractive for business expansion. Investment in sustainability initiatives is also strong: 77% of companies with a presence in Singapore will spend at least 5% of their operating profit on becoming more sustainable over the next 12 months, and almost three in 10 (28%) are spending more than 10%.
ASEAN attractions
The survey suggests that international businesses continue to see ASEAN primarily in terms of its supply chain connectivity rather than as a consumer market, even though Gross Domestic Product (GDP) per capita for Southeast Asia has grown from USD1,250 in 2000 to USD5,800 in 2023, according to the International Monetary Fund.
The region’s skilled workforce (27%), growing digital economy (26%) and competitive wages (25%) are the top three attractions, while the growing middle class ranks ninth in terms of importance. However, businesses identify talent as a challenge as well as a draw: the cost of training (36%) and lack of skilled personnel to drive implementation (also 36%) are identified as top challenges for businesses seeking to digitise their operations in ASEAN. Also, the ability to hire talent with the right level of expertise is the top challenge to becoming more sustainable in the region.
When asked which technologies ASEAN is leading the way in, the highest number of respondents identify e-commerce (31%) and digital payments (28%), reflecting the widespread adoption of digital platforms and mobile wallets across many countries in the region.
Regina Lee, Head of Commercial Banking, HSBC Singapore said: “The survey findings are consistent with the increased funding, trade financing and payment activities that we have seen especially amongst our global clients in Singapore. ASEAN’s growing demographic, increasing number of inter-regional economic frameworks, and sprouting innovation scene makes it one of the most compelling regions to do business in. We have been scaling up our coverage team as well as banking and digital capabilities to support global businesses pursue growth opportunities that the region offers.”
HSBC Singapore has built new capabilities and introduce new initiatives that support global businesses’ desire to tap on Singapore’s innovation-first mindset and investment in sustainability to expand their presence in the region. To better support high-growth technology companies including start-ups with international ambitions, HSBC Singapore has introduced a USD200 million lending fund in 20211, which they can tap on to scale their business. Furthermore, HSBC Singapore remains committed to support its commercial banking clients on the transition to a net zero-carbon economy. The Bank has supported multiple Sustainable Finance transactions over the past year and most recently, HSBC Singapore has structured its first social loan for a private equity investor2, Quadria Capital, in Southeast Asia.
Singapore is the centre that connects the different Southeast Asian markets, and HSBC serves as one of the key conduits for finance in the region. For its effort, HSBC successfully took three of Asiamoney’s Singapore awards3 this year: Best International Bank, Best Corporate Bank and Best for Digital Solutions. This is also the second consecutive year that HSBC was named “Best International Bank – Singapore”.
Read: HSBC Global Connections – Singapore Report
Media enquiries:
Betty Fong | +65 6658 4103 | betty.c.y.fong@hsbc.com.sg
Note to Editors:
Methodology
HSBC commissioned an online survey of 3,509 businesses based in nine markets: China, India, UK, France, Germany, US, Australia, Hong Kong, and GCC countries (United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Oman and Kuwait). Survey respondents were key decision-makers from companies with annual turnover of at least USD5 million who are already doing business in Southeast Asia or considering doing so. The survey ran from July 25 to August 2, 2023.
The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited is the founding member of the HSBC Group. HSBC serves customers worldwide from offices in 62 countries and territories. With assets of US$2,990bn as of 31 March 2023, HSBC is one of the world’s largest banking and financial services organisations.