Singapore is becoming a magnet for foreign entrepreneurs looking to establish their businesses in Asia, attracted by its lower cost of living and wages as well as ease in attracting talent, although there are still some issues to be ironed out to make the destination more attractive.
Online rental room marketplace, Roomorama, for one, chose the city-state to be its Asia-Pacific base as part of its worldwide expansion plans and moved here in March 2011, said Federico Folcia, the company's CEO and co-founder. The company first started out in New York, United States, three-and-a-half years ago.
He explained that Singapore was the "very best" option from the start when the company decided to move to this region rather than expanding into Europe. This is because there are more entrepreneurs moving here, which generates buzz, and the relatively lower wages and cost of living were also attractive points for consideration.
"You can tell that Singapore is establishing itself as the startup capital of Southeast Asia," he said.
The fact that Roomorama's other co-founder, Teo Jia En, is a Singaporean also played a role in the company setting up base here, as she has knowledge of the country and its technology environment, Folcia acknowledged.
Another entrepreneur, Roshan D'Silva, founder of Tripvillas, reckoned that the country was the "logical choice" to expand his vacation home rental service, which started in India. After all, it is the capital of tourism in Southeast Asia and one of the first stops for visitors to the region, he said.
He also pointed out that setting up a business in Singapore is fast because the process is easy and streamlined for entrepreneurs. "There's no country in the world where setting up business is faster," he said.
That Singapore is predominantly English speaking, and its legislation is in English, helped attract social games developer GamesMadeMe to the country too, revealed the company's CEO Juha Paananen.
The Finnish executive had worked in Singapore for four years before starting the company with two other Finnish compatriots, and said that access to talent is another key attraction. Singapore is an international city and it's fairly easy to recruit people from overseas--mostly from Asia but also from Europe, he said.
Razmig Hovaghimian, co-founder and CEO of Viki, an online, community-based video subtitling service provider, described Singapore as the "underdog" of the global startup scene, and this attracted the company to set up an office here. The video site has TV and movies, translated into over 150 languages by its translator community
Originally a class project by Harvard and Stanford graduate students in the U.S., Viki decided to grow, develop and market its product "under the radar" and the city-state offered them a "fresh playground" to flourish in, the CEO disclosed. It now has offices in Singapore, San Franciso and Seoul, South Korea, and is backed by venture capitalist firms such as Greylock Partners, Andreessen Horowitz and Charles River Ventures, among others.
Not all positive
However, Hovaghimian disagreed with Paananen in that finding the right talent is easy.
He said this was not an issue initially when the team was still small, but as the company scaled from 20 employees to 30, hiring candidates with the right skillsets became more difficult. The United States, on the other hand, has a bigger pool of talent and has enough people to go around, he added.
Paananen added that Singapore's big businesses should also be more startup-friendly. Based on his past work experience, he said established companies can be "really reluctant to try out anything new" and this might kill off new startups as the latter will need help from enterprises to help establish their businesses.
Additionally, while he sees a lot of money made available by Singapore's venture capitalists (VCs), he noted that there are not many VCs here that are familiar with the tech industry. Many local VCs come from a finance background, whereas those in the U.S. are more in tune with IT.
The country's small land mass and population also results in space constraints for offices and a limited domestic market for startups to rely on, noted D'Silva. Space, in particular, is a concern as it raises rental costs. As such, the government could set aside cheaper real estate here for startups as is done in the U.S. where these companies congregate in the cheaper parts of the city, the Tripvillas founder suggested.