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Company Incorporation

A new business needs to understand the type of entity it wants to register itself into – Sole Proprietorship, Partnership, Limited Liability Company, etc.

Company Secretarial Service

A secretarial service ensures good governance, effective administration, and compliance with legislation, laws, and regulations that govern business and industry.

Government Grants

Financial support from the government through manpower upskilling, digital technology adoption, and business expansion support.

HR & Payroll

An HR system allows good tracking and accurate records in terms of recruitments, annual leaves, salary, CPF contributions, etc.

License & Permit Application

A company/business requires a specific business & other government licenses to operate – Business License, Occupational License & Business Activity License.

A professional requires government permits to work in the company – EP, S-Pass, WP.

Bridging

Bridging helps businesses to assess and form meaningful business relationships through a wide network of professional firms and industry partners.

Taxation Filing

A tax filing is form filed to the authority to report corporate/individual income, expenses and other pertinent tax information.

Accounting Services

A corporate/individual needs to have a good knowledge of accounting methodology to maintain accurate records and to keep financial and tax submissions in compliance with appropriate rules. The common types of accounting principles & standards includes Generally Accepted Accounting Principles (GAAP), and International Financial Reporting Standards (IFRS) and the Internal Revenue Code (IRC).

Auditing Service

It is a professional service rendered to review of the accuracy and integrity of the corporate financial statements or services that complies with the government regulatory.

The post When do you need to engage a corporate service provider? appeared first on ForBis Accounting.

Introduction: What is a Business Ecosystem?

Recently, the term “Ecosystem” has been a buzz word amongst business owners and in business forums, but what exactly does it mean? It has a similar meaning to the scientific definition of Ecosystem, but for businesses, the Ecosystem describes a network of organizations that cooperate together to deliver a specific product or service. A business Ecosystem can also be seen as a networked yet relatively free collaboration between several companies from one or more industries. Thereafter, the value chain of a company will expand into a value network with several partners. 

Organisations within an Ecosystem are largely independent economic players that come together to create products/services. Some examples of organisations include suppliers, competitors, customers, government agencies and more. It is important to note that no two businesses will have the same Ecosystem, as each Ecosystem should be characterized by each business’ specific value proposition. In addition, it should be clearly defined to solve a problem, and also work with a group of organisations that specifically suit the business’ needs.

As knowledge management becomes increasingly essential to competitive success, the capabilities to build and manage an extensive Ecosystem with the right set of relationships between partners also remains critical. 

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Types of Business Ecosystems

There are mainly 2 types of Business Ecosystems: Solution Ecosystems and Transaction Ecosystems. 

Solution Ecosystems create and/or deliver a product or service by coordinating various contributors. For such systems, there is often a core firm that helps to oversee the construction of these contributors. During the development of a new solution, suppliers of the core firm can be part of the Ecosystem because they are independent. Most importantly, it is to ensure that their innovation activities are coordinated with the other players. Once the basic innovation is accomplished, such suppliers may be restricted to a minor role in a hierarchical supply chain.

Transaction Ecosystems match or link participants in a two-sided market through a (digital) platform. In fact, there are many such platform businesses today. Think of Carousell, which links independent sellers and buyers; Grab which links drivers and riders; and Jobstreet that links individuals with companies. 

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Characteristics of a Business Ecosystem

Like any system, a business Ecosystem needs to be functional, has a good infrastructure, is adaptable and is easily connectable. However, a business Ecosystem also has other special characteristics that make it so unique and useful for businesses to utilise. 

Firstly, a good business Ecosystem should have modularity, which is the ability to separate and recombine the system’s various components. While this term is mostly used in programming, it is applicable in a business Ecosystem context as the network of organisations consists of organisations that are designed independently yet function together as a whole. This feature will allow the organisations within the network to be able to work on their own and not be entirely dependent on the existence of the Ecosystem to continue operations.

Next, Ecosystem participants also need to ensure their contributions to the Ecosystem are custom tailored to suit the value proposition of the Ecosystem they are in. Another factor is that the Ecosystem-specific contributions must also be mutually compatible so that the network of organisations can cooperate with one another.

The organisations within the network must also be multilateral, meaning that the organisations should not work exclusively with one other organisation within the network. The failure of one relationship will lead to the downfall of the entire Ecosystem, despite there being successful relationships between certain organisations.

For example as shown in the diagrams above, there are organisations A,B,C,and D in the Ecosystem. Even if A successfully works well with B,C and D, if there is a contract failure between B and D, the entire business Ecosystem will not be able to function.

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What ForBis’ Ecosystem Looks Like

At ForBis Accounting, we pride ourselves in having a business Ecosystem structure. Our solution Ecosystem aims to provide professional services to our clients through our core firm: ForBis Accounting. ForBis Accounting provides Advisory, Bridging and Compliance services to companies. 

In addition, we have two subsidiaries, namely ForBis Human Capital and ForBis Ventures. These two subsidiaries work hand in hand to streamline the processes to provide the most personalised services for our clients. ForBis Human Capital provides manpower services like payroll, visa applications, strategic branding, recruitment and selective job redesign, remuneration and compensation drafting and contract drafting etc. While ForBis Ventures buys small stakes in companies with high potential. In otherwards, ForBis Human Capital and ForBis Ventures are the complementors of ForBis Accounting. 

A large part of Bridging means to repeatedly recommend services of our clients to other clients (provided they are good and reasonably priced). We have partnering firms such as other Accounting firms, Law firms, Professional engineers and Consultancy firms that deal with grants. We work with them and our associates to provide complete services to our clients. 

For example, we work with law firms when start-ups want to do licensing of their contracts or when they want to seek legal advice. We also assist with the application of intellectual property and any other professional help needed. 

Our relationship with our customers are in the form of business-to-business (B2B). Majority of our customers are in the Fintech, Retail, and Legal industries, Social Enterprises and Institutions of Public Character. 

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Benefits of having a Business Ecosystem

Establishing a business Ecosystem is one of the key drivers to success. Being able to work with many partners provides abundant opportunities for companies to attain achievement that is beyond the capabilities of its own. They will be able to collaborate with companies specializing in other sectors or industries, giving both companies economic advantages. It may also offer access to additional creativity in the creation of solutions. 

Companies are able to gain insights from suitable partners on how to adapt suitable structures, develop and implement effective business models, and gradually transform their value chain. Furthermore, as the industry gets more competitive, many companies are seeking to focus on fewer core activities to focus on their positioning. Through partnerships, it allows them to reallocate their resources to deepen their core competencies. 

Overall, it can be seen as a long-term strategic decision for the company’s development and focus. Companies are able to quickly launch innovation culture upwards and have huge potential for SMEs.

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Cons of having a Business Ecosystem

While there are many advantages of having a business Ecosystem, there are also a few disadvantages. One of them is the possibility of high transaction costs that results from having a multitude of relationships. Some of these relationships are less defined and regulated. If they are not monitored or controlled, they can unintentionally outweigh the extra customer value that the Ecosystem generates. 

In addition, since it consists of largely independent economic players that agree to collaborate, it implies that each participant only has limited control of the overall system. The lack of control may worry some companies. The moment companies are made known to be associated with each other, any damage done by one company may greatly affect the other in terms of brand reputation. 

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Conclusion

Before establishing a business Ecosystem, it is important to decide whether the business is really in need of one. Since the word ‘Ecosystem’ has been such a hot topic these days, many managers of firms have the fear of missing out on something essential and feel it is necessary for their businesses to have an Ecosystem, without carrying out their analysis. 

Despite all the benefits that an Ecosystem can bring to a business, as discussed above, there are also cons to having or being part of a business Ecosystem. This is especially so for organisations that are not clearly aware of their value proposition and goals. 

Business Ecosystems are not the only model businesses can use for governance. There are other systems such as a hierarchical supply chain or a vertically integrated model, both of which do not lose out in terms of effectiveness to the business Ecosystem model. Businesses must realise their needs in order to choose the most suitable model that will work well for them, and not blindly follow industry trends as it may lead to unexpected repercussions.

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Authors:

Celesdia SOH Jia Hui
Business Development Associate

Chrislyn WONG Shu En
Business Development Associate

Nur FADHILAH Bte Abd Fazil
Business Development Associate

Michelle CHEN
Business Development Associate

Editor:

Ryan Adnin GOH
MBa, Certified Employment Intermediary (KAH)
Director of Advisory

References

Bossen, K. (2020). Business ecosystems: how they benefit SMEs. DMEXCO.

https://dmexco.com/stories/business-ecosystems-how-they-benefit-smes

Pidun, U., Reeves, M., & Schüssler, M. (2019). Do You Need a Business Ecosystem?. BCG.

https://www.bcg.com/publications/2019/do-you-need-business-ecosystem

Williamson, P. & De Meyer, A. (2010). Ecosystem advantage: How to boost your success by harnessing the power of partners. CJBS.

https://www.jbs.cam.ac.uk/wp-content/uploads/2020/08/wp1006.pdf

The post ForBis’ Ecosystem appeared first on ForBis Accounting.

According to Philip Kofter, who is known as the Father of Marketing, “Marketing thinking is shifting from trying to maximize the company’s profit from each transaction to maximizing the long-run profit from each relationship.” Relationships are becoming extremely valuable today. Not just the relationship with its customers, but with its other stakeholders such as the employees and suppliers. The article will examine the importance of maintaining good relationships with these stakeholders as well as how we can do so. 

Customer Relationships

As the saying goes, “Customer is King”. After all, it is the customers that greatly affects the sales revenue of the company. This is especially true for companies in the service industry. Rather than just blindly selling products to customers, the focus should be on marketing the true brand message in order to maintain the relationship with them, even after the transaction has been made. This improves customer retention while building on their brand loyalty. It can also lead to positive word of mouth and thus increase your customer base and sales.

A simple visual here will introduce different ways on how you can actively engage your customers:

Employee Relationships

While customers are important to a company, your employees matter too. In fact, they are your most important customers. As they are customers that have the most insights to your product or services, they are highly valuable to your company. You can rely on them to give you the most constructive feedback on how to improve on your goods. When treated right, these “customers” can also become your greatest brand advocates and will take better care of your customers. 

Furthermore, employees serve important roles in representing your organisational culture. How does your company manage employees? And how do they manage other parties? Even if your company has formed its core brand identity, it is the employees that help maintain it. 

Regardless of the size of the firm, having a structured human resource management will help in managing the welfare of the employees. The human resource department can come up with a proper recruitment system to ensure that the firm selects the right employee that is able to fit well into its culture. 

Supplier Relationships

In order to meet your customers’ demand for your products, your supply chain needs to be effective and efficient. If your supply chain fails to deliver what your customers want and on time, it will disappoint your customers and adversely impact their satisfaction. How effective your supply chain would be is reliant on how well you manage your relationships with your key suppliers. Forging stronger ties with your suppliers is highly advantageous for your company as it may lead to special benefits such as concessionary rate and preferential services.

Just like any other relationship, it is crucial to display empathy towards the other party. As an entrepreneur yourself, you would understand the frustration of dealing with customers that do not pay on time despite invoices being given. Not only will you be short in cash but there may be some things that have to be put on hold due to the lack of funds. Similarly, you are a customer to your suppliers. As such, in order to prevent tension between you and your supplier, make the effort to pay on time. Easing their operational affairs, where you can, will also ease your affairs in getting your products. 

Additionally, ensure that as buyers, you provide sufficient lead times for your suppliers to prepare your orders. By understanding your suppliers’ production methods, needs and workload, you would be able to estimate what is a suitable lead time for them to prepare your goods comfortably. It will also ensure that your products will always be of good quality and reduce the likelihood of product rejects.

Conclusion

Of course, there are many other types of business relationships with various stakeholders that are not mentioned in this article. But instead of trying to manage all those relationships at once,  it is important for the company to do its own research on which stakeholders’ relationships you would want to prioritize. The relative importance may very well differ in different industries, as well as in different phases of your business growth. All in all, your business relationships play a major role in creating more value for the company and opportunities for growth. 

Authors:

Celesdia SOH Jia Hui
Business Development Associate

Chrislyn WONG Shu En
Business Development Associate

Nur FADHILAH Bte Abd Fazil
Business Development Associate

Michelle CHEN
Business Development Associate

Editor:

Ryan Adnin GOH
MBa, Certified Employment Intermediary (KAH)
Director of Advisory

References

https://www.forbes.com/sites/forbesagencycouncil/2017/10/24/why-is-customer-relationship-management-so-important/?sh=5a2d49bf7dac

https://www.efficy.com/why-companies-that-put-the-customer-and-employee-at-the-center-are-more-successful/

https://www.coriniumintelligence.com/insights/are-employees-more-important-to-your-business-than-customers

https://www.entrepreneur.com/article/206530

https://www.pay4.com/supplier-relationship-management-important/

The post #ForBisTips for Entrepreneurs – Maintaining Good Business Relationships appeared first on ForBis Accounting.

A study done by SkillsFuture Singapore in 2017 estimated that there were 100,000 accountancy professionals in Singapore alone and in the past few years, the accountancy sector has been experiencing robust growth ranging from 5% to 9%. This is an indication of how well-performing the accountancy sector is!

Types of Jobs in the Accounting Sector

Despite the large base of accountants in Singapore, a common misconception people have about the accounting sector is that the only job available is that of bookkeeping, which they believe will be automated away in a matter of years. However, they are absolutely wrong on this as the accounting sector has a variety of jobs that require a large range of skills, such as analytical, forecasting and investigative skills. 

Here is the breakdown of the more popular jobs within the accounting sector.

Career Pathways

Careers in the accounting sector will also be given opportunities to take on managerial and directorial roles later on in their career. Attached is a career roadmap prepared by SkillsFuture SG for those working in the accounting industry. Do note that the salary shown is a general figure and should not be assumed to be the same across all companies. 

Upskilling Oneself

Other than needing to keep up with any changes to the accounting and legal standards, accounting professionals often take on extra certifications and courses to upgrade themselves, especially in light of technological developments. They also take up professional qualifications such as the Chartered Accountant, ACCA or Accredited Tax Professional examinations to increase their professional credentials.

These professional qualifications will aid the accounting professionals in climbing up the corporate ladder, as they will be more recognised and trusted to take on supervisory and managerial roles to guide the newer associates. 

Take a look at our previous article here to learn more about the different types of accreditations within the Accounting Industry in Singapore. 

The article only covered the few main roles Singaporean accounting professionals take up, but the entire industry encompasses a larger variety of careers. There are endless opportunities out there as an accounting professional, so do not be afraid to take the leap forward and join the accounting sector! 

Authors:
Celesdia SOH Jia Hui
Business Development Associate

Chrislyn WONG Shu En
Business Development Associate

Nur FADHILAH Bte Abd Fazil
Business Development Associate

Michelle CHEN
Business Development Associate

Editor:

Ryan Adnin GOH

MBa, Certified Employment Intermediary  (KAH)

Director of Advisory

References

https://www.myskillsfuture.sg/content/portal/en/industry-insights/industry-detail.html

https://journal.isca.org.sg/2020/02/26/outlook-for-the-accountancy-sector-in-2020/pugpig_index.html

https://www.ecpi.edu/blog/what-are-different-types-of-accounting-jobs

https://www.myskillsfuture.sg/content/dam/portal/taxonomy/CareerMap/Accountancy.pdf

https://online.champlain.edu/blog/accounting-career-path

The post #ForBisTips Different Career Pathways within the Accounting Industry appeared first on ForBis Accounting.

Introduction

Globalization has encouraged businesses to collaborate and source for opportunities outside their own country, facilitating their growth tremendously. Not only does international expansion allow companies to achieve diversification and gain access to talent, it also exposes one to different methods of doing business. In fact, business transformation is now seen as critical as it offers firms an opportunity to become less dependent on their domestic economic situation.

However, according to CNA, many businesses are still hesitant to take the leap. With the current pandemic, more businesses take the conservative approach and are even more reluctant to expand overseas.

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Why Should Companies Expand Overseas?

Businesses should expand overseas to reap these benefits:

1. Access to new talents

Entering a new market allows Singapore firms to gain access to foreign talents out there. Ideas shared by these highly skilled individuals that come from varying backgrounds can offer new perspectives that a company may have overlooked previously. Hence, tapping on such talents will provide opportunities for the firm to explore the abundant possibilities for it to grow exponentially.

2. Gain competitive advantage

By being the first or the first few companies to establish a presence within the foreign market, firms are able to benefit from additional perks, such as ease of dominance in the market. They will also be able to establish a better brand name, more prominent brand recognition, and a greatly amplified reputation.

3. Achieve Economies of Scale (EoS) in long run

Some companies tend to be attracted to certain countries due to the availability of cheap and highly skilled labor and readily available raw materials for production. Depending on the type of industry a firm is in, expanding businesses to these countries can help them reduce cost of operations, labor and materials. By constantly working towards increasing production and lowering cost, firms will be able to achieve economies of scale over time.

4. Mitigate risks

When a firm diversifies geographically, they are able to mitigate the overall risk they face. When international expansion is successful, the business is able to offset any losses in their domestic market – caused by an economic or political event. In simpler terms, there will always be a “backup” plan while waiting for the other economy to stabilize itself.

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Singapore Government Grants

However, expanding overseas is costly and not many businesses have the ability to go global with their own funds. This is why government grants are highly sought after to aid businesses in their plans to expand internationally.

Disclaimer: This paper was prepared and published in the midst of the COVID-19 Pandemic. Please refer to https://www.businessgrants.gov.sg/ for the most updated information regarding the monetary values of the grants.

Name of Grants	Details of Grant
Market Readiness Assistance (MRA) Grant	The MRA grant is meant to help SG companies with their marketing expenses when venturing overseas. Eligible SMEs will be granted up to 80% (till 30 Sept 2021) support on eligible costs, capped at S$100,000 per market.  It covers: Overseas market promotion (capped at S$20,000) Overseas business development (capped at S$50,000) Overseas market set-up (capped at S$30,000) For more information, click here.
Enterprise Development Grant (EDG)	The EDG grant has three pillars: Core Capabilities, Innovation and Productivity, and Market Access.  Projects that are under the Market Access pillar provide up to 80% support level for SMEs, and 60% for non-SMEs of the qualifying costs.  The grant support Singapore companies in the following ways:  Mergers and Acquisitions (M&A) Includes planning, assessment of potential M&As or post-M&A stage integration.  For more details on qualifying activities, click here. Pilot Project and Test Bedding Aid in overseas expansion through building track record. It covers the demonstration of product, viability of solution and establishment of a track record to scale in new markets.  At the point of grant application, the product should be new and should not generate any revenue. Standards Adoption Adopt internationally-recognized standards and certifications in key industries and emerging sectors. The purpose is to help businesses improve market access, competitiveness both locally and internationally, and trust in products and services. For more details on scope of work covered, click here.
International Co-Innovation Programme	To expand the global network, partnerships are set up with the EUREKA Network, France, Germany, Israel and Shanghai. The programme aims to support companies in their international collaborations on technology development and co-innovation through the exchange of ideas and knowledge across enterprises in different countries.
Land Productivity Grant (LPG)	For optimisation of land use through overseas relocation, the grant covers a portion of its initial costs.  The funding available is for up to 70% of the qualifying costs. For more information on the qualifying costs, click here.
PACT	The PACT programme encourages collaborations beyond regular business activities.  The level of support is capped at 70% for SMEs, and 50% for non-SMEs of the qualifying costs.  For more details on eligibility, click here.

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Governmental Support during Covid-19 – Grants

In the midst of the pandemic, the Singapore government has stepped in to support businesses with increasing the funding support of grants. 

The MRA support was actually increased from 70% to 80% till 30 Sept 2021. The 70% grant support is also extended until 31st March 2023.  Enterprise Singapore increased funding support to “encourage and enable companies to find new business opportunities overseas through such virtual platforms, without physical travel”. 

The Temporary Bridging Loan Programme will also be extended from 1st April 2021 to 30th September 2021 in order to help businesses to sustain and grow their businesses activities. In tandem with this, the Monetary Authority of Singapore’s (MAS) SGD Loan Facility will also extend their support for all loans approved under the programme until 30th September 2021. The Singapore government has also lowered its risk-share on the loan from 90% to 70%, and lowered the maximum loan quantum from S$5 million to S$3 million.

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Approaches to a Successful Overseas Expansion 

While there is no sure-win formula to successfully venture overseas even with the government grants, businesses can be prepared for possible challenges and obstacles they may face. Here are some tips that companies can take to be better prepared.

1. Perform due diligence

It is essential for companies to research the country they are intending to expand into. Not only does it include reading up on the specific laws and regulations of that country, but also doing thorough market analysis of the industry. This is to ensure that there is a market for the product or service, and whether the product is a good fit for the country’s local market. 

Companies should also study the governance of the country – the state or stability of their politics and their current labour costs as these will play a big part in ensuring employee stability, rights and intellectual property of businesses.

2. Work with experts or local representatives

When Singapore firms work with experts or local representatives from the country they intend to venture into, they can leverage on their knowledge to obtain a better understanding of the market behaviour, barriers of entry and how to grow market presence. 

Relying on experts or local representatives, when necessary, can help the company to better integrate into the local culture and understand the government, laws and policies in the different markets. Often, setting up a business overseas requires a lot of paperwork. Hence, it would be beneficial to get help from attorneys who specialize in business law for the particular country.

3. Be financially ready

It is crucial to be aware of the costs involved in expanding to another country. The market price might be different from those in the country of origin. Companies must also be prepared to incur additional costs as they may face the possibility of insufficient capital due to unexpected costs. It is wise for companies to secure angel investors first as these investors may have connections in the country that the company can tap on.

4. Adopt the local mindset

The main concern when a firm first enters a new market is “How do we buy the mindsets of the locals there?”. One way to tackle this is for firms to partner with established local businesses as it gives companies the ease to introduce themselves to the locals. Firms will be able to navigate the unfamiliar business landscape more comfortably, as they will have guidance from their partners. 

In recent years, the rise of social media has also developed a new form of partnership, where companies can look to collaborating with local digital influencers instead of only being limited to local businesses. These digital influencers are recognised as “local thought leaders” on their platforms, with a loyal following of fans that place high trust in them. Working with these influencers can help companies prove their credibility to the locals, as the influencers’ reputation will help verify the legitimacy of the company in the eyes of the locals, and further accelerate their pace of global expansion.

Bryant McGill once mentioned, “Whatever makes you uncomfortable is your biggest opportunity for growth”. Even though going through these four major processes, together with the whole process of applying for government grants may seem daunting, it will allow businesses to scale greater heights.

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Case Study: JustCo Global

JustCo is a flexible workspace provider that was founded in 2011 in Singapore. Between 2014 to 2019, JustCo embarked on its expansion plan in the Asian Pacific, targeting cities like Seoul, Shanghai and Jakarta. 

Being a start-up, JustCo had insufficient funds to venture out on their own, thus they sought grants and funding from the government and government bodies. JustCo managed to attain the investment of US$177 million from Singapore’s sovereign wealth fund GIC and multi-national property company Frasers Property Limited. This allowed them to ramp up technology solutions and enhance service offerings to facilitate collaboration and networking opportunities across Asia Pacific.

To combat the challenges of not being familiar with the local landscape, JustCo partnered with local businesses in the respective countries, such as Sansiri in Thailand and Gunung Sewu in Indonesia. This helped them to tap on the expertise of their partners and gain local market knowledge and operational expertise. 

JustCo also employs each country’s local talents to get a better understanding of each market and their demands, enabling JustCo to get a stronger foothold when entering new markets and continually redefine flexible workspace experience for their local members. For example in Australia, since JustCo found out that coffee is an essential part of Australia’s workplace culture, JustCo centres feature an in-house café/barista for members to make a quick coffee run. The centre was also designed to feature spacious hot-desking areas and ample collaboration areas as Australians enjoy socialising and they tend to keep things casual in a business setting.

Similarly in Taiwan, as a tribute to the national drive towards sustainability and upcycling, recycled materials have been creatively incorporated in the design and furniture within the space.

JustCo’s commitment to create a productive and conducive workspace globally has been made easier with the help of government grants, as well as employing good business techniques such as partnering with local companies and hiring their workforce.

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Looking Ahead

Moving forward, there is a trend towards remote working and a higher dependency on online collaborative tools, such as Zoom, Skype, Google Suite etc. Hence, there is an urgent need for workplaces to adapt to the evolving work culture, especially in terms of their IT infrastructure. Although some companies may find it extremely costly to revamp their mode of working, there are ample government grants available to aid these companies.

If you are interested to find out more about how you can manage your business especially during periods of uncertainties, do check out our pre-recorded webinar at https://www.youtube.com/watch?v=PjveSh2mDT8&feature=youtu.be&ab_channel=ForbisAccountingTV  to gain more valuable tips, advice and insights.

Authors:

Celesdia SOH Jia Hui
Business Development Associate

Chrislyn WONG Shu En
Business Development Associate

Nur FADHILAH Bte Abd Fazil
Business Development Associate

Michelle CHEN
Business Development Associate

Editor:

Ryan Adnin GOH
MBa, Certified Employment Intermediary (KAH)
Director of Advisory

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References

Albano, D. (2020). What a postpandemic future means for business expansion.
theHRDIRECTOR. https://www.thehrdirector.com/features/business-growth/the-postpandemic-future-and-what-this-means-for-business-expansion/

Backaler, J. (2018). To Grow Your Business Abroad, Partner with Local Influencers. Harvard
Business Review.
https://hbr.org/2018/09/to-grow-your-business-abroad-partner-with-local-influencers

Brooks, C. (2019). Going Global: How to Expand Your Business Internationally.
Business News Daily.
https://www.businessnewsdaily.com/8211-expand-business-internationally.html

Chan, M. (n.d.). S’pore-Based, Globally Present: 5 Founders Share Tips On Expanding
Overseas. Vulcan Post. https://vulcanpost.com/680371/singapore-startup-expanding-overseas-tips/

Co, D. (2020). Enterprise Singapore to enhance grants, loan schemes to support businesses’
COVID-19 recovery. CNA. https://www.channelnewsasia.com/news/business/enterprise-singapore-to-enhance-grants-loan-schemes-to-support-13261442

Donelly, D. (2020). What are the Benefits of Global Expansion for your business? New
Horizons. https://nhglobalpartners.com/benefits-global-business-expansion/

Enterprise Singapore. (2020). Go Global.
https://www.enterprisesg.gov.sg/keepgrowing/go-global

Enterprise Singapore. (2018). Grants.
https://www.enterprisesg.gov.sg/financial-assistance/grants

Enterprise Singapore. (2020). How Singapore Companies Can Succeed in Overseas Markets.
https://www.enterprisesg.gov.sg/blog/how-singapore-companies-can-succeed-in-overseas-markets

Ho, M. (2020). Commentary: There is more support for Singapore firms to go overseas. But
some just don’t want to. CNA. https://www.channelnewsasia.com/news/commentary/singapore-budget-sme-overseas-enterprise-sbf-government-measure-12530504

Kalyani, A. (2019). Benefits of Expanding Your Business Internationally. Medium.
https://medium.com/@amitkalyani/benefits-of-expanding-your-business-internationally-ac71c56f6ba0

Natally, K. (2020). Why Companies Expand into International Markets. Born to be global.
https://borntobeglobal.com/2020/06/26/why-companies-expand-into-international-markets/

Quain, S. (2019). Why Do Businesses Operate Internationally? Chron.com.
https://smallbusiness.chron.com/businesses-operate-internationally-78226.html

Van, Thompson. (n.d.). Handling Cultural Differences in a Global Business. Chron.com.
https://smallbusiness.chron.com/handling-cultural-differences-global-business-75485.html

Velocity Global. (2017). Hire Globally: A Quick Guide to Expanding Overseas by Hiring Local
Talent. https://velocityglobal.com/blog/hire-globally-quick-guide-expanding-overseas-hiring-local-talent/

The post Government Grants: Expanding Your Business Overseas appeared first on ForBis Accounting.

Solely focusing on Singapore’s Accounting industry, one would have to compete with more than 100,000 Accountancy professionals for opportunities in Assurance, Tax and Advisory departments. Furthermore, being known as a globally trusted hub for business and finance, it is reasonable to expect that the Accounting industry in Singapore will continue to grow and see more professionals entering this industry. Therefore, it is crucial to upgrade one’s professional skill sets and knowledge to remain competitive.

Importance of obtaining Professional Accreditations

The above reasons are why obtaining professional accreditations are so important in today’s economy. Especially considering the post-pandemic situation, companies are expected to freeze or reduce hiring of new employees to cut costs, thus making competition tougher than before.

Comparisons between Certifications

Accounting & Auditing Certifications:

Tax Certifications

Special Certifications

Common Accounting Accreditation Questions

Should I Get Two Accounting Certifications?

It depends on the career path and specialisation that you want to take. For example, if you have your CA Singapore accreditation, but want to widen the range of services you can provide to other regions and countries. You may consider taking up the CIPA (Certified Islamic Professional Accountant). 

Can I Obtain the Practical Experience Qualification from any company?

For the Singapore CA Qualification, candidates can only fulfill their Practical Experience Requirement at any Accredited Training Organisations (ATO). ATOs are certified by the Singapore Accountancy Commission (SAC) to possess the appropriate standards of staff training, accountancy resources and development for Singapore CA Qualification.

For the CIPA, candidates can only fulfill their Practical Experience Requirement at an approved Practical Experience Institution for at least 1 year and under the supervision of an External Supervisor.

Authors:
Celesdia SOH Jia Hui
Business Development Associate

Chrislyn WONG Shu En
Business Development Associate

Nur FADHILAH Bte Abd Fazil
Business Development Associate

Michelle CHEN
Business Development Associate

Editor:

Ryan Adnin GOH

MBa, Certified Employment Intermediary  (KAH)

Director of Advisory

References

https://www.cpaaustralia.com.au/about-us/

Chartered Accountant Pathway

https://sctp.org.sg/Benefits

https://www.taxacademy.sg/files/executive-tax-programmes/income-tax/BusinessCorporate42020.pdf

https://isca.org.sg/member-services/pathways-to-other-professional-qualifications/asean-chartered-professional-accountant-for-isca-members/asean-cpa-faq/

http://allalah.com/assets/CIPA_Brochure.pdf

https://sctp.org.sg/Accreditation-Criteria

https://www.edb.gov.sg/en/business-insights/insights/singapore-retains-top-spot-as-world-s-most-competitive-economy.html

https://www.myskillsfuture.sg/content/portal/en/industry-insights/industry-detail.html

https://www.accaglobal.com/sg/en/qualifications/accountancy-career/fees/fees-charges.html?countrycode=Singapore

The post #ForBisTips: Different types of accreditations within the Accounting Industry in Singapore appeared first on ForBis Accounting.

Singapore has been known to be a major hub for investors, as the country provides one of the world’s most business-friendly regulatory environments for local entrepreneurs and is ranked among the world’s most competitive economies.

Introduction to Singapore

Singapore boasts one of the highest GDP growth rates in the world, at an average of 7.7% since independence and topping 9.2% in the first 25 years of its independence (World Bank, 2019). As one of the major financial hubs in the Asia Pacific Region and second-busiest shipping port, closely behind Shanghai, China, it is no doubt that Singapore is ranked among the world’s most competitive economies. With competitiveness comes productivity and economic growth. 

In 2017, Singapore announced the launch of ‘Asia’s Infrastructure Exchange’, a regional finance hub where industry experts can not only exchange information on the demand and supply of infrastructure in the region, but also obtain financing and allow for experts to connect with one another.

Benefits of Setting Up in Singapore

Easy Administration

In Singapore, there is a strong support system for new and potential business owners intending to incorporate here from the get-go. Business owners, who are unsure about which business structure is most suitable for their business needs and goals, can approach the Accounting and Corporate Regulatory Authority (ACRA) for guidance. The website provides business owners with in-depth information on which business structure best matches the company’s needs and also lists down any requirements for businesses. Thereafter, businesses can easily register their business, including foreign branch offices, online at Bizfile by the ACRA and set up their representative office with the relevant organizations.

Companies can also visit the Economic Development Board (EDB)’s website to view Singapore’s offering of premium facilities and infrastructure for physical offices.

Singapore’s Extensive Network

Singapore has an extensive network of organizations for new businesses to work with, both locally and globally. New businesses can capitalize on Singapore’s large network to connect with corporations, industry experts and business partners to grow their business, especially in terms of achieving horizontal growth in the first few years of incorporation.

Locally, Singapore has three main government bodies to support new enterprises, namely SMEPortal.sg, Enterprise Singapore and the EDB. These organizations can provide support in aspects such as talent recruitment and advisory on business development.

It is also important to note that Singapore boasts a strong talent pool, in terms of both local and foreign talent. According to the Global Talent Competitiveness Index, Singapore ranks second in attracting foreign talent, and majority of Singaporeans are literate and well-educated. Hard workers by nature of the Confucian culture in the education system, Singaporeans are not only highly skilled, but also have a strong work ethic that makes them attractive employees.

Apart from local government boards, the Singaporean government has also worked hard to collaborate with international partners to sign Free Trade Agreements (FTA). These agreements are extremely lucrative for new businesses, as the preferential treatment will reduce costs for many new companies when thinking of expanding globally. Within each FTA, there are also Investment Guarantee Agreements, which promotes greater investment flows between two countries and sets out standards of protection for investments made in one country by investors from the other country.

Business-friendly Corporate Tax Regime

Singapore’s Corporate Tax Regime is superior to its neighboring countries. The average Corporate Income tax (CIT) rate of all the 10 ASEAN countries is 23%, with the Philippines imposing the highest CIT rate at 30%, and Singapore with the lowest at 17% (ASEAN Briefing, 2018).

In addition, Singapore has entered into more than 90 Double Taxation Agreements (DTAs) with an extensive network of various countries (ASEAN Briefing, 2019). DTAs help businesses to avoid double taxation that may arise when the same income is taxed in two different countries. 

Concessionary tax rates are also offered to new start-up companies through Singapore’s Tax Exemption Scheme. Where the Year of Assessment (YA) falls on 2020 onwards, the scheme allows qualifying companies a maximum exemption of S$125,000 of tax for three consecutive YAs (IRAS, 2020). Companies can also opt for the Partial Exemption Scheme after the three YAs, where the maximum exemption is S$102,500 for each YA (IRAS, 2020).

Protection of Businesses with Intellectual Property Laws

Singapore is also committed to maintaining strong intellectual property (IP) laws, as they believe rights are essential to support an innovation-driven economy. The Ministry of Law has implemented the IP Policy in 2020 to support value creation and protect businesses’ ideas and innovations. Their strict enforcement of protection laws is well-regarded internationally, and the IP regime is regarded as one of the world’s best. Since 2014, Singapore has been ranked among the top five in the world by the World Economic Forum’s Global Competitiveness Index for the strength of their IP protection.

Challenges of Setting Up in Singapore

Though it has been discussed on how convenient and relatively easy it is to start a business in Singapore, there are some pointers that investors and owners can take note of.

High Operating Costs

The cost of opening and running a business in Singapore is relatively higher than other Southeast Asia (SEA) countries. The strong Singapore currency makes paying employees locally more expensive. Limited land supplies mean that rental costs for offices or a retail space are twice as high as compared to neighboring Asian countries. On that note, firms must also take note of all the start-up costs involved; registration fee, banking-related costs, office set-up costs, website and marketing costs.

Different Culture

There is a strong emphasis on relationships in Singapore, which means the process of doing business should be unrushed and based on personal development at first, rather than the facts and figures of corporate life. As a relatively young country, Singapore draws influences from both East and West, which can make it a hotbed of cultural values. The common practice for overseas firms entering the Singapore market is that they hire local representatives to share insights on how the company can tailor their operations to better suit the Singapore market.

Complications of Obtaining Permit

The government’s strict employment limits and valid working passes requirements for foreign workers can make it difficult to bring in manpower from other countries. Preliminary assessment is based on the individual’s academic qualifications, experience, suitability for the job, along with the sector the prospective employer operates within. New businesses must always ensure they abide by the new regulations before applying for a working pass for their employees, especially in terms of the salary being offered to their foreign employees.  

Setting up a business in Singapore has many benefits, but one must also beware of the challenges that they may encounter. Below are some success stories of businesses who have successfully ventured in Singapore despite the difficulties that arise.

Case Study 1

About Grab

One example of a Singapore-based company that saw success in Singapore is Grab. The company offers a variety of services including transportation, food delivery, and digital payment (Grab, n.d.). Grab was first founded in Malaysia 2012. In 2013, they expanded to Singapore, Philippines and Thailand. Shortly after, they shifted its headquarters from Malaysia to Singapore in 2014 (Odesh, 2018). As of August 2020, Grab has raised $10.5 billion. It is also reported that their latest funding round values at $200 million, and their valuation was $14 billion (Craft, n.d.).

The Shift to Singapore

Grab faced regulatory issues on raising funds from international venture capital (The Independent, 2017). Thus, Grab shifted to Singapore which has a wide appeal for growing startups like Grab. In the World Bank ranking, Singapore has been placed as the top 3 among 190 countries for its ease of doing business for more than 10 years (Trading Economics, 2019). Not only does Singapore have business-friendly policies such as government subsidies and tax breaks, but also a well-established ecosystem. Since its shift, they were able to attract more international financiers and raise its valuation for public offerings (The Independent, 2017).

Besides shifting headquarters, Grab chose Singapore as their first R&D center to support their expansion in 2015 and further doubled its space in 2017. The city was Grab’s ticket to expand more rapidly across the region. Being a world class transportation hub, Singapore has always been prepared to adopt advanced technology – including Internet of Things and smart vehicles. This allows the city-state to build a car-lite transport system that facilitates ride-sharing, the ease of traffic congestion, and carbon emissions (EDB, 2020). According to Anthony Tan, Grab’s Co-Founder & CEO, “Being a great education hub, Singapore has many computer science graduates. As a tech company, we needed to tap into that”. Grab also leverages Singapore’s skilled workforce to create new mobility services to improve users’ experience across Asia’s culturally diverse markets (EDB, 2020).

‘Grabbing’ Opportunities

Grab saw the opportunity to become the one stop app to offer services and solutions for daily needs from transportation to food to entertainment and cashless payments. Having the capability to satisfy a range of daily services was the key component behind their success in the region. Next, Grab had reward programs that entice users to continue using the app, helping them to build customer loyalty. They also offer points to users who choose to use their cashless payment (GrabPay).

Most importantly, Grab understands that every country is different. It could be in terms of infrastructure, regulations, cultures and the needs and wants of users. Grab seized the opportunity to localize their services to meet the needs of the customers in each of their markets. For instance, in Singapore, they have the service GrabMart where they partner up with many retailers, groceries, minimarts and supermarkets and even bookstores to cater to the needs of Singaporeans. Thanks to Grab’s hyperlocal strategy, they were able to beat their rival, Uber.

Challenges Faced

Indonesia and Singapore governments are making plans to tighten the regulation of ride hailing fares. Authorities are increasing oversight of service providers like Grab as the application has become key links to mass transportation. In 2019, Singapore’s parliament passed a bill that will give regulators power to curb overcharging on ride-hailing applications. This means that Grab is forced to be on a level playing field with traditional taxis and new entrants and may have to rethink their pricing strategy to ensure that they remain competitive.

Grab has come a long way over the past few years. In their journey towards achieving success, one can observe that they have grabbed the opportunities and innovated to meet the needs and wants of their markets.

Case Study 2

About 2C2P

Examining the success of a foreign company entering the Singapore market, the case study will look at 2C2P, a cash & card payment processor. The company was founded in Bangkok in 2003 by Aung Kyaw Moe, a computer programmer from Myanmar. 2C2P is among the earliest entrants in the business of helping companies collect online payments from consumers. Upon seeing the rapid growth of his business in Thailand, Aung decided it was time to further expand to other countries. With 5 years of experience learning about e-commerce business and providing various payment solutions for the industry, Aung started 2C2P in Singapore in 2008 to provide comprehensive e-commerce and m-commerce payments.

Choosing Singapore for Expansion

Aung believed that by expanding into Singapore, it will allow them to gain tax privileges and incentives from the Singaporean government. This will ease their first overseas venture and increase the success rate of entering  a new market (BangkokPost, 2016).

Furthermore, given Singapore’s extensive network, it would not be difficult for Aung to find a reliable local partner for regional expansion into the country. To Aung, “local knowledge is important” because it affects the “human touch and emotional communication” approach the company takes to reach out to the new market (TeamYS, 2013).

Aung also recognized that in order to expand and provide services to regional customers, they would need to work with suppliers that have infrastructures distributed throughout SEA and beyond. Acknowledging that Singapore provides a wide choice of premises for businesses and these businesses are assured of premium facilities and infrastructure, Aung once again felt that Singapore met the criteria when selecting the country they should venture into. 

Expanding into Singapore Market

2C2P continued to witness big success after they expanded into the Singapore Market. Singapore’s young and active talent made it easy for the firm to train the team with the necessary skills for big projects. When the firm started its migration to AWS in 2014, they only needed four months of intensive AWS training for its Singapore development team. As such, they were able to quickly finalize the migration project by spring of 2015. They are now running an AWS architecture centralized in an Amazon Virtual Private Cloud (Amazon VPC) in the Amazon Asia-Pacific (Singapore) region, with the Amazon United States West (Oregon) region used for disaster recovery (AWS, 2015).

2C2P conducted their due diligence on Singapore’s economic prospects before deciding to venture in, which led to a smooth process of expansion and they were able to fully reap the benefits of geographical diversification.

Moving Forward: Singapore as a Technology Hub

Being coined the next Silicon Valley, Singapore is no stranger to investments from tech companies as the city-state houses 80 of the world’s top 100 tech companies, including multinational tech companies such as Google, Visa and Facebook. The city-state has used its status as a financial hub to attract venture capitalists, incentivize start-ups and form partnerships with global tech investors since 2010. Their efforts have bore fruit as Singapore has become an irresistible magnet for tech titans all over the world. 

The heightening tensions between the US and China have also helped Singapore to cement its position as the world’s leading technology hub. China’s technology giants such as Tencent, Alibaba and Bytedance, have chosen to expand operations in Singapore since the nation has good relations and remains neutral between China and the US. 

Singapore has also taken steps to ensure it remains an attractive and suitable destination for tech companies, with its construction of 5G infrastructure and implementation to increase the capacity of transmissions it can handle. 

The 5G infrastructure is also built in preparation for deep tech to evolve and take flight in Singapore. In 2018, an AI hub was also built in the city-state’s business district to position Singapore as a global leader in AI technologies. The hub aims to incubate start-ups and build IP exclusively in the area of AI for Singapore, as well as draw investments in this sector of technology. 

Enterprise Singapore also encourages the formation and development of companies venturing into deep tech. SLINGSHOT, an international hackathon for deep-tech start-ups to pitch their business ideas, is powered by Startup SG to identify promising start-ups with innovative solutions and provide them with advisory support and mentorship. 

With deep tech being the next big thing in light of Industry 4.0, Singapore is well-equipped to serve new businesses intending to venture in the field of AI. Moving forward, Singapore’s continual effort to develop more suitable infrastructure and platforms for tech companies will serve as a good foundation to establish its position as the regional tech hub and allow new businesses to connect with an extensive network of leading advisors and companies.

Authors:
Celesdia SOH Jia Hui
Business Development Associate

Chrislyn WONG Shu En
Business Development Associate

Nur FADHILAH Bte Abd Fazil
Business Development Associate

Michelle CHEN
Business Development Associate

Editor:

Ryan Adnin GOH

MBa, Certified Employment Intermediary  (KAH)

Director of Advisory

References

ASEAN Briefing. (2018). Comparing Tax Rates Across ASEAN. https://www.aseanbriefing.com/news/comparing-tax-rates-across-asean/

ASEAN Briefing. (2019). Singapore’s DTA Network: What is Covered and How to Claim Relief. https://www.aseanbriefing.com/news/singapores-dta-network-covered-claim-relief/

AWS. (2015). 2C2P Case Study. https://aws.amazon.com/solutions/case-studies/2c2p/

Bangkok Post. (2016). 2C2P: Building a Powerhouse. https://www.bangkokpost.com/business/1118637/2c2p-building-a-powerhouse

Consultancy.asia. (2020). Singapore considered top alternative tech hub to Silicon Valley. https://www.consultancy.asia/news/3047/singapore-considered-top-alternative-tech-hub-to-silicon-valley 

Craft. (n.d.). Grab stock price, funding rounds, valuation and financials. https://craft.co/grab/metrics 

EDB. (2017). The case for centralization in Asia.https://www.edb.gov.sg/en/news-and-events/insights/headquarters/the-case-for-centralization-in-asia.html 

EDB. (2020). Meet the ones who love proving the world wrong. https://www.edb.gov.sg/en/impossible-stories.html

EDB. (2020). Ride-hailing firm Grab picked Singapore in 2015 as the site for its first R&D centre to support its rapid expansion across the region. https://www.edb.gov.sg/en/impossible-stories.html 

EDB. (2020). Why the world’s top tech companies are still investing in Singapore during a pandemic. https://www.edb.gov.sg/en/news-and-events/insights/headquarters/why-the-worlds-top-tech-companies-are-still-investing-in-singapore-during-a-pandemic.html 

Enterprise Singapore. (2020). Supporting Your Startup Journey. https://www.enterprisesg.gov.sg/industries/hub/startup/supporting-your-startup-journey 

IRAS. (2020). Common Tax Reliefs That Help Reduce the Tax Bills – Partial Tax Exemption for Companies (PTE). https://www.iras.gov.sg/irashome/Businesses/Companies/Learning-the-basics-of-Corporate-Income-Tax/Common-Tax-Reliefs-That-Help-Reduce-The-Tax-Bills/#title3 

IRAS. (2020). Common Tax Reliefs That Help Reduce the Tax Bills – Tax Exemption Scheme for New Start-Up Companies https://www.iras.gov.sg/irashome/Businesses/Companies/Learning-the-basics-of-Corporate-Income-Tax/Common-Tax-Reliefs-That-Help-Reduce-The-Tax-Bills/#title1 

Grab. (n.d.). Learn more about the many different ways we serve your everyday needs. https://www.grab.com/sg/

Minlaw. (2020). Intellectual Property Policy. https://www.mlaw.gov.sg/about-us/what-we-do/intellectual-property-policy/

MOM. (2018). Starting a business in Singapore.https://www.mom.gov.sg/working-in-singapore/starting-a-business 

Odesh. (2018). ABOUT GRAB – COMPANY. https://www.odesh.net/2018/12/30/about-grab/ 

SWITCH. (2020). Slingshot. https://www.switchsg.org/slingshot 

Team YourStory (YS). (2013). How to expand your startup to 9 Asian countries – the story of 2C2P founder Aung Kyaw Moe’s persistence. https://yourstory.com/2013/09/aung-kyaw-moe-2c2p-founder-startup-in-9-asian-countries

The Independent. (2017). Grab leaving Malaysia is Kuala Lumpur’s loss to Singapore. https://theindependent.sg/grab-leaving-malaysia-is-kuala-lumpurs-loss-to-singapore/

TMF Group. (2018). Singapore: Top 10 Challenges Of Doing Business In Singapore. Mondaq. https://www.mondaq.com/corporate-and-company-law/691944/top-10-challenges-of-doing-business-in-singapore

Trading Economics. (2019). Ease of Doing Business in Singapore. https://tradingeconomics.com/singapore/ease-of-doing-business

World Bank. (2019). Singapore Overview. https://www.worldbank.org/en/country/singapore/overview

The post Setting Up a Business in Singapore appeared first on ForBis Accounting.

 
Especially for countries within ASEAN (Association of Southeast Asian Nations), the various economic integration initiatives implemented by ASEAN can help SMEs expand their businesses, create new jobs, offer their customers more goods and services, and promote economic growth and sustainable development across the region.

Working with Indonesian Companies

In recent years, Indonesia has been a hot spot for Singaporean companies looking to expand. The above are top-cited reasons why many Singaporean companies have decided to venture into collaborations and partnerships with Indonesian companies. Industry experts have also mentioned that President Joko Widodo’s (Jokowi) ambitious plan in 2019 to generate an additional 35,000 megawatts of electricity would encourage SMEs to look at opportunities relating to renewable energy when thinking of collaborating with Indonesian companies. 

Nonetheless, SMEs in other industries should not be discouraged, as other tracks for collaboration are in the midst of being paved by larger companies. In 2018, BDO, a management consultancy firm in Indonesia, has signed a bilateral cooperation agreement with its Singaporean counterpart to leverage mutual resources in pursuit of regional management consulting opportunities. This sets the foundations for SMEs to pursue partnerships with Indonesian firms in similar sectors, thereby expanding the range of industries available for Singaporean firms to collaborate with.

Indonesia in the Global Context

Indonesia is also faring well in the eyes of international bodies, jumping up 48 positions in the World Bank’s Ease of Doing Business index in 2019, to the 72nd position. They are in the 50th position in the World Economic Forum’s Global Competitive Index, ranking highly among 141 member countries for 2019. 

Major international rating agencies have also raised Indonesia’s credit grades, with the S&P upgrading Indonesia further to ‘BBB’, from their previously lowest grade of ‘BBB-’. S&P has also raised Indonesia’s short-term sovereign credit rating from ‘A-3’ to ‘A-2’, and S&P attributed the favourable increase in ratings to Indonesia’s recent strong economic growth prospects and supportive policy dynamics, under the continued leadership of President Jokowi. President Jokowi’s strong performance in the 2019 elections allows for policy continuity and both investors and industry experts believe that Indonesia will be able to maintain their government’s relatively low debt and improve fiscal performance under his leadership.

Indonesia’s long-term plans to boost competitiveness further gives reassurance on the stability of their economic development and constant efforts to become an even more attractive destination for global companies, thus raising investors’ confidence.

Members of ASEAN

Other than Indonesia’s personal growth and development, another factor behind the ease for Singaporean companies to do business with Indonesia’s would be the fact that they are both members of the regional unit, ASEAN. ASEAN was formed to accelerate economic growth, social progress & cultural development in the region through joint endeavours in the spirit of equality and partnership. Since its formation in 1967, it is no doubt that member states have been cooperating well with one another to achieve said aims. 

The ASEAN Free Trade Agreement (AFTA) implemented in 1992, has been the one of the most significant initiatives in facilitating the economic development in the region and boosting growth for many companies in Singapore. The AFTA comprises three agreements, namely the ASEAN Trade in Goods Agreement (ATIGA), the ASEAN Framework Agreement on Services (AFAS), and the ASEAN Comprehensive Investment Agreement (ACIA). 

The adoption of a Common Effective Preferential Tariff (CEPT) did away with non-tariff barriers and removed all quantitative restriction on imports, as well as a reduction in tariffs on all intra-ASEAN trade in manufacturing, processed agricultural products and capital goods to 0%. Such initiative will benefit companies as they are able to engage in free trade without the need to pay additional taxes, decreasing the burden on companies in incurring unnecessary tax expenses. 

Many ASEAN countries also follow a similar tax structure, where most ASEAN nations impose a standard Corporate Income Tax (CIT) rate that is within a few percentage points of the 23% average. This makes it easier for companies within ASEAN to agree on their business models, revenue streams and expenses, since their corporate tax structures and rates are similar. 

Therefore, SMEs in Singapore should take the first step forward in initiating partnerships with Indonesian companies, as it is not only mutually beneficial for companies in both countries, but will also help to facilitate stronger economic cooperation within ASEAN.

Authors:
Celesdia SOH Jia Hui
Business Development Associate

Chrislyn WONG Shu En
Business Development Associate

Nur FADHILAH Bte Abd Fazil
Business Development Associate

Michelle CHEN
Business Development Associate

Editor:

Ryan Adnin GOH

MBa, Certified Employment Intermediary  (KAH)

Director of Advisory

References

https://www.iisd.org/publications/taking-advantage-aseans-free-trade-agreements-guide-small-and-medium-sized-enterprises#:~:text=Over%20the%20same%20period%2C%20ASEAN,simplify%20export%20and%20import%20processes.

https://www.enterprisesg.gov.sg/non-financial-assistance/for-singapore-companies/free-trade-agreements/ftas/singapore-ftas/afta

https://www.enterprisesg.gov.sg/media-centre/news/2019/may/expanding-overseas-still-not-an-easy-task-for-smes

https://www.straitstimes.com/business/companies-markets/more-initiatives-to-help-smes-take-their-business-overseas

https://www.straitstimes.com/business/spore-firms-eye-indonesia-for-growth

https://www.consultancy.asia/news/1720/bdo-in-singapore-and-indonesia-to-collabroate-on-management-consulting

https://www.aseanbriefing.com/news/comparing-tax-rates-across-asean/#:~:text=Currently%2C%20most%20of%20the%20ASEAN,percent%20of%20the%20taxable%20income.

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=ID

https://www.businesstimes.com.sg/hub/indonesia-74th-independence-day/foreign-investors-flock-to-indonesia

https://www.reuters.com/article/us-indonesia-ratings-s-p-idUSKCN1T10VFhttp://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf

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