Amid claims today by Innov8 CEO Edgar Hardless that Singapore is the easiest place in the world to set up a company, Catapult Ventures CEO Vinod Nair has laid out several reasons for supporting Hardless.
Hardless made the claim at Echelon Ignite Australia in Sydney on Wednesday,
"Singapore is really the easiest place in the world to set up a company. It requires absolutely minimal effort and can be done in three to four days," Hardless said.
"I've seen lots of Singapore startups, but with no Singaporeans in them. So lots of companies with Australians, Americans, Spanish people all setting up their companies in Singapore as their base of operations."
He said the process is only made easier by the amount of assistance provided to entrepreneurs.
Nair went into more detail, saying that there are between 20 and 30 different schemes and grants that entrepreneurs are able to apply for, and further concessions given to assist businesses.
"We are now able to claim laptops. So you can go out and buy a Macbook Pro, and the government gives you 70 percent or 60 percent off that. It's like the Great Singapore Sale all year around," he joked.
Nair said entrepreneurs should think of Singapore as Asia "lite", given its large proportion of English-speaking population and its close proximity to other nations
"It's a good way to get your feet wet and get a feel for the markets in the region. It is pretty small, but it is a good way to get started."
"If you're implementing anything that's hardware or software related, it's a great place to test it out, because you get to see the dynamics of how that solution would work in almost a perfect market where everyone owns a smartphone," he said, referring to the country's status as having the highest smartphone penetration in the world."
Incubators are plentiful, according to Nair, who said that conservatively, incubators took a 5-10 percent stake in company equity, with others taking nothing at all for an investment of SG$50,000-$60,000.
"You don't need to have a company incorporated. You don't need to have a prototype ready. As long as you have a good idea."
The catch: The company must be incorporated in Singapore, one founder must be a full-time founder, and the founders are only able to draw SG$1,000/month from the funding to pay themselves.
Startups that are successful at developing their prototype are able to apply for an extension of the government's scheme, matching the government's contribution up to a total of SG$200,000.
On the higher range of investments, the government's Technology Incubation Scheme shifts responsibility for funding towards local venture capitalists, who have the experience to determine which startups best fit the SG$589,000 investment that they can apply for.
"It's a very cheap way to bet on startup companies. In hindsight, two or three years down the track, if the company is successful, [investors] have the option to buy out the government stake for a nominal interest. It's like taking a bet, kind of peeking at the results, then deciding whether they want to go all in or not."
The forfeited equity is higher at this stage, with investors taking 20 to 33 percent share of the company, and a significant portion of its tech development must occur in Singapore, Nair said.
"Because it's less [of a] risk [for investors], you're more likely to have an easier time, and you'll have more people to talk to in Singapore."
Later during the day, Right Click Capital Partner Benjamin Chong said that he thought Australian entrepreneurs who were choosing to ignore South-East Asia and heading straight to the US were being irrational.
"I reckon the Silicon Valley is one of the toughest, most competitive markets to break in[to]. Not only do you have the brightest Americans who come out of the Ivy Leagues ... you have the brightest Americans who come out of any of the hack cultures. It is a shark-infested place," Chong said.
"I'm not saying that Asia is just a walk in the park, and let's just set up shop and the billions will flow — but I would suggest that it's a less competitive environment. It's probably an easier place to recruit founders, it's probably an easier place to find a co-founder, it's probably an easier place to actually get some traction."
Sydney Seed Fund General Partner Garry Visontay agreed, saying that there's been no awareness of the opportunities in South East Asia.
"Most Australian founders are completely blinkered. They focus on Australia, and all of our thinking is conditioned around 'Should we focus on the US? Should we move to the US?"