SINGAPORE
EMPLOYMENT TREND NEWSLETTER

Japanese Companies Attracted To Singapore

In recent years, many Japanese companies have setup their regional head quarters (RHQ) in Singapore to take advantage of Singapore’s commercial and geographic edge as a regional hub. Sales and marketing management were the most common Japanese RHQ functions in Singapore, followed by financial management and corporate planning. Singapore’s efficient legal system and its transparent policies are sighted as the main factor for attracting Japanese companies to embark their RHQ operations here.

Singapore's Prime Minister Lee Hsien Loong was in a 4-day Tokyo visit in Oct 2009, with Mr. Fujio Mitarai - chairman of Nippon Keidanren, where he pointed that Japanese companies particularly like the opportunities to work in Singapore because they see in Singapore a pro-business and friendly environment. He added that Singapore's corporate tax rate of 18 per cent was one reason why many Japanese companies were happy to be in Singapore. Companies graduating to RHQ status get to pay an even lower corporate tax rate of 15%. He stressed that Singapore needs to maintain an overall low-tax environment and to produce hard-working, highly skilled people in order to attract foreign investments. The Singapore government is constantly studying areas for potential business development, for example in biotechnology and digital media, to sustain itself in the forefront of the business world.

Singapore has become a favorable choice RHQ location for most Japanese companies not only based on the Republic’s competitive edge. Singapore is known to provide a quality life for international immigrants with a cosmopolitan lifestyle - this makes relocation of executives here easy. Furthermore, Japanese culture is widely appreciated in Singapore. In fact, Japan Prime Minister Yukio Hatoyama was in Singapore on 14 Nov 2009 to launch the Japan Creative Centre – a joint effort between the 2 governments to showcase Japan’s edge-cutting technologies, design, and Japanese modern and traditional cultures. Singapore’s Prime Minister Lee initiated the idea of the centre in Singapore with the intention to exhibit the wonders of Japanese technology and the charms of Japanese culture.

Presently there are more than 3000 Japanese companies in Singapore operating across various industries such as electronics, precision engineering, chemicals and transport engineering; making Japan one of Singapore’s top three foreign investors. Many Japanese companies see Singapore as a place where capital, talent, and technology can converge to achieve a synergetic growth. With the addition of evidently strong bilateral ties between the two countries, it is little wonder that most Japanese companies regard Singapore as a welcoming potential springboard for their business in the region and beyond.

Singapore – Recession Over

Singapore’s Ministry of Trade and Industry (MTI) has declared that the recession in Singapore is over based on two consecutive quarters of economic growth. Official Data released on 19th Nov reported that their GDP (Gross Domestic Product) was up 14.2 percent in the three months between July - September, following a 21.7 percent increase in the second quarter. According to numbers released, growth in the third quarter was led by manufacturing where the sector expanded by 26.6 percent on a quarter-on-quarter basis. Positive performances in the construction and services sectors also supported the growth. "Effectively, the recession in Singapore is over," Ravi Menon, the permanent secretary with the Ministry of Trade and Industry (MTI), said at a media briefing.

On a year-on-year comparison, Singapore’s third quarter results revealed that their economy grew by 0.6 per cent. This is exceptionally good news to Singaporeans as the Singapore government earlier expected the economy to contract between 2 and 2.5 percent this year instead.

Moving forward, MTI projects that Singapore's economy will grow by 3 to 5 percent in yr 2010. The opening of the integrated resorts is expected to help boost tourism and retail sales. However, Singapore’s economic outlook for yr 2010 will still be closely linked to global conditions, bearing in mind that its economy is trade-reliant and that it was the first in Asia to sink into a recession last year in response to a global downturn that hit demand for its export, especially from the United States. The US economy’s recovery from its recession will be a key factor to Singapore’s growth prospects, the ministry said.