Innovation and entrepreneurship in Asia through an Australian lens - Singapore

Insights from Entrepreneurs in Singapore

Research and interviews conducted by Anna Groot, Asia Director, Advance

Advance, Australia’s network of leading Australian diaspora and alumni, supports innovation and entrepreneurial, global Australians. We conducted a study across Asia over the last eighteen months, on which locations might provide the best environment for startups looking to capitalise on the positive growth across the region. Our goals for the study were simple; to be able to assess which location in Asia would provide the best conditions for an extension of our existing Innovation program, currently operating between Australia and Silicon Valley; to identify Australian entrepreneurs and the nature of their industry focus, in various locations across Asia and to spotlight the opportunities and unearth the hidden challenges of these unique geographies for the next generation of startup creators.

As the world’s largest and most populous continent[1], Asia clearly covers a large area and as we were not able to research every country in the region, we focused the study on five locations within Asia where there is a critical mass of Australian diaspora namely; China, Hong Kong SAR, Singapore and India.

A series of qualitative interviews were undertaken with Asia based Australian start-up founders, entrepreneurs, investors, incubator managers and other market participants about their experience in the start-up scene within their base country. While a portion of the information remains confidential we are able to share some of the learning and insights garnered from our research.

We will be presenting an overview of the study results for each location over the next four months and welcome member feedback and commentary to be added to a white paper outlining the pros and cons of starting up a business in each location. The first location to be presented is Singapore.

Singapore and Hong Kong both vie for the title of ‘Asia’s Innovation Hub.’ Singapore (ranked 7th in the world’s Global Innovation Index) offers many incentives to businesses looking to set up shop on the island, such as; world-class infrastructure, a large array of business grants, an efficient goods and labour market, world-leading financial market development, low corruption levels and a high level of government efficiency. If you send an invoice to a client in Singapore, you have a pretty good chance of it getting paid, and if not, a firmly established rule of law to support you in following up. Where the challenges lie for businesses setting up in Singapore is the gap between seed investment and venture capital, a small local population and relatively high set up costs - Singapore was recently ranked as the world's most expensive city, according to the Economist Intelligence Unit’s 2014 Worldwide Cost of Living Survey[2].

Starting up in Singapore - At A Glance

POPULATION: 5.47 million



INCOME TAX: 0-20% depending on income level

CORPORATE TAX: 8.5% to 17%


 Employment Pass (EP) for company owners and professional staff with tertiary education and relevant experience.

 Entrepreneurs Pass (EntrePass) for owners of newly incorporated (or to be incorporated)  Singapore companies who wish to relocate to Singapore to operate their new business.

Pros and cons of setting up in Singapore


  • Large amount of finance available
  • Ideal entry point for SE Asia
  • The private sector observes due diligence
  • 2nd most free economy in the world (2013 poll)
  • One of two Asian Start-Up hubs to make the Top 20 Global Start-Up Eco-systems list
  • Strong Silicon Valley connections (33% of investors have lived in the Valley)
  • English speaking
  • Large amount of multi-nationals => investors/ strategic partners
  • Relatively well-developed startup system due to Government support
  • Proximity to a large and growing market
  • Ease of doing business
  • Australia itself is a fragmented market, while Singapore is slightly larger in population than Sydney, it sits on the doorstep of Asia and its large markets.
  • Singapore has a convertible note
  • The private sector observes due diligence
  • Many early stage investors
  • A lot of multi-nationals based here who also have an interest in innovation and so potential strategic partners/ investors in Australian innovation.
  • Easy first step in Asia for Australian companies
  • English main spoken language
  • Smart, educated talent available
  • Effective Commonwealth based legal system
  • Seed money and grants available
  • If you are an innovative technology company, Singapore is definitely the place to be in Asia.
  • Singapore has opportunities for quick entry and fast traction
  • If you are trying to develop a service or product Singapore is a great place to do that.
  • Dynamic business environment
  • A lot of capital
  • Diverse economic base
  • Excellent travel hub, regionally and globally


  • Low trust culture and people want to see that you are part of the scene with a commitment to staying in the region before investing
  • Small population – you need to be thinking global from the outset.
  • Relatively high costs
  • Some skills shortages
  • Investment gap between seed investors and VC’s
  • Singapore as a market on its own is relatively small – smaller than Sydney. If you are coming here to start a company it is generally as a springboard/ regional HQ before expanding in to other markets in Asia. With that in mind, you do need a lot of capital behind you - both for setting up in Singapore (particularly when employing expat staff) which can be relatively costly as well as entering your other planned markets in Asia.
  • Cash flow – as with any other market this is one of the key challenges
  • Service level requests and demands are higher in Asia than in Australia
  • One of the important aspects of setting up shop in Singapore is that you need to make sure you are – and openly display a commitment to being here for the long term. Doors will open easier for you then. Trust is a slow-burn process. It is important not to just pull out the moment things look challenging. Business is a cyclical process and you need to show longevity and a commitment to weathering the storms.
  • Staffing – making sure you have the right people on board is crucial to success.
  • Be culturally sensitive addressing people and business distinctly in each market

Key areas for investment

  • Technology particularly Cloud related software (SaaS and data centers)
  • Finance and funds
  • Media
  • B2B and B2C ecommerce
  • Mobile devices
  • Media & Entertainment
  • REITs (Real Estate Investment Trusts)
  • Biotech
  • Sustainability and social enterprise
  • Commodity Trading

Leading incubators, accelerators and co-working spaces

Plug and Play Singapore
NTU Ventures
The Hub Singapore
Club 71
Egg Accelerator
Hackerspace SG
Keong Saik Collab

Click here for a full list of co-working spaces in Singapore.

Key Challenges to starting a business in Singapore[4]

  1. Allowing sufficient time for visas and start up stages.  Singapore is incredibly efficient which facilitates the early business startup. 
  2. Managing capital to expand into the region. 
  3. Seeing the region and Singapore as a long term relationship.

Singapore and entrepreneurial culture

In 45 years Singapore has grown from traditional Kampong villages to a metropolis.  There are strong entrepreneurial genes in the population. On the other hand, there is also a risk adverse mindset present and a need to broaden local education to include experiential as well as conceptual learning.

Government support for the growth of the start-up community?

There is up to 6:1 leverage in public/ private investment. To some extent the government might be said to be overly generous – amongst some local bloggers, Singapore has been named a ‘Grantrepreneurs’ market.

Pros/cons for starting a business in Singapore, rather than Hong Kong, Beijing Shanghai or India

It is the law of the jungle in many places in Asia, If you send an invoice in Singapore, it will get paid, and there is an efficient, straight legal system. There is a bigger concentration of digital talent here than in Hong Kong.

Singapore Vs China:

  • In China, there are many issues around ownership both in IP and company ownership
  • You must have a local business partner, not just for legal reasons but also because the market is incredibly complex
  • Living in China poses physical challenges in that it is difficult to live there with the current pollution levels. Any company that grows to a certain size soon attracts the attention of powerful vested interests  – there is more of a warlord approach modelled on Sun Tze's Art of War.

Singapore Vs India

  • India has seen invaders come and go over millennia and it is still fundamentally unchanged. It has a very distinct culture where everything is a negotiation and there are few certainties.
  • Singapore is regarded as an aspirational destination for some people in India

Singapore Vs Hong Kong

  • There is a small startup scene in Hong Kong, it is more about traditional business there and the old 'gateway to China' positioning is less strong now that foreigners realize they can go straight to Shanghai and Beijing.

A snapshot of the Singaporean investment community (Angel / private investors versus VC)

Singapore is used to carpetbaggers. The older generation of local business people can be quite guarded about outsiders. They generally won’t buy from you for a couple of years. People want to see that you are part of the scene with a commitment to staying in the region. Don’t think about selling to Asia. Think about partnerships and what the best way is to get going with that.

Current investor environment

The investor environment is very well developed at every level with the exception of Series A (1 – 3 million dollars) which is hard to find. There are buckets of finance available and a plethora of family offices putting money into funds.

The investment culture grows from a fairly traditional model; property/ land ownership. This is one of the challenges to other options of investment where you can't see or touch the assets.

There is a harvest approach to making money here. Family businesses traditionally seek continuous cash generation rather than investing 10-15 million dollars in something like new drug development or new technology, as there aren’t many examples of success in those markets yet. No one has popped the 250 million dollar company threshold yet in Singapore in the digital technology space and when they do that will change the game. 

Common mistakes made by would-be entrepreneurs coming to Singapore

  • Coming in to sell rather than forming partnerships
  • Underestimating the cultural differences. Although Singapore is made up of a large mix of cultures, the business environment is essentially Chinese. In some respects, they are still doing business here the way it was done did 50 years ago. I would say that Mainland China is already moving ahead faster.
  • Not spending enough time getting to know the culture

Common mistakes made by Australian companies

  • The commercialisation gap exists everywhere: there is a misconception that you have to have lots of mad ideas with clever people- ‘pentathlon model’
  • There is a large mass of IP being patented and inventoried which is just wasteful.
  • Supply-side approach needs to change
  • Not getting customers involved early enough.
  • There have been instances of Australian companies coming in with a fairly short-sighted approach, which can create problems further down the line if you are not playing a long-term game. Mistakes are not easily forgotten here.
  • Following the US MNC model of over-reporting and over managing everything. In my experience, with rare exception, most Australian companies still don't 'get' Asia, or more succinctly treat Asia as one country. 

What could Australia learn from Singapore?

Singapore has done much to make itself business friendly. Back in 1999 Lee Kwan Yew hailed the air-conditioner as the greatest invention of the twentieth century for helping transform this small tropical island into a tolerable and attractive workplace. Government bodies like the Economic Development Board (EDB) and ‘enterprise enablers’ Spring Singapore have encouraged the biggest multinationals and the smallest start-ups to set up shop here. Several factors (apart from air-conditioning) contribute to Singapore’s appeal, including government incentives, low taxation and excellent infrastructure.

Australia could also learn how to nurture SMEs from Singapore. They do a great job here in making it easy for SMEs from a compliance and tax point of view and especially make it easier for businesses to get over the first two to three hump by providing tax breaks and making grants such as PIC accessible.

What are the benefits of basing your businesses in Singapore?

It is easy to register a new business in Singapore and there are very good tax breaks available in the first three years of operation and an array of subsidies for contributing to economic activity. Singapore offers government funding and access to an increasing pool of venture funding. It also has a world-class infrastructure and sits on the doorstep of some of Asia's fastest-growing economies.  

Thank you to Hugh Mason (JFDI), Tony Boatman, Chris Gawan-Taylor (Spinnaker Run), Chris Pile (The Farm) and Mathew Godfrey (Y&R) for their contributions.

The material in this article includes general feedback Advance collected over the course of 2013 and 2014 and current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to businesses or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.

Watch highlights from our 2014 Singapore Asia Perspectives event: