Doing Business and Being an Expat in Singapore
Between 1963 and 1965, Singapore was an integral part of the Federation of Malaysia. On August 9, 1965, due to political differences and racial tension, Singapore was separated from Malaysia and became the Republic of Singapore. After the separation, the fledgling nation had to become self-sufficient, and faced problems including mass unemployment, housing shortages and lack of land and natural resources such as petroleum. Lee Kuan Yew was the first prime minister from 1959 to 1990. A trained lawyer, this visionary leader was Singapore’s chief architect in harnessing social cohesion despite ethnic and religious diversity; and in engineering an economic miracle.
As a small country that aspired to become a regional business hub, Lee Kuan Yew’ knew that it lacked the manpower to develop a diverse economy. The solution – incentive companies to setup headquarters in the region’s most stable, safe country, and allow them to bring in their own staff to fill the roles that Singaporeans could not. And come they did, bringing expats who received generous pay packages that, event today, remain far above the average income of a Singaporean. A survey from HSBC found that 54% of expats in Singapore make more than $200,000 a year, plus benefits – such as luxurious accommodation and cars, and tax. Even Singaporean companies are hiring expats – and paying them premium wages. Singapore became the most desirable countries for expatriates to work and live in. Under his leadership Singapore has transformed from a small port city into a wealthy global hub.
The number of foreign workers in Singapore, which has a population of 5.6 million, has risen significantly in recent years, from 1,053,500 in December 2009 to 1,336,700 in June 2014 according to figures from the Manpower Ministry. With the birth rate at 1.2 per cent pa, this huge population increase is largely attributed to expats and immigrants, which has had an impact on the local business culture.
The Culture Change
Singaporean society is now highly sophisticated, its people are well educated and the pace of change and development is phenomenal. With the high number of expat population and migrants in the country, Singaporeans started to feel of being somewhat overwhelmed by the influx of foreigners. They were blamed for rising house prices, cost of living and overcrowding.
These “expats” form the elite echelon of Singaporean society. They earn the highest wages, live in the most exclusive Central Business District (CBD) high-rises, and dominate the middle and high management positions in Singapore. Resentment towards expats in Singapore is at an all-time high, according to young Singaporeans, as foreign workers continue to fill jobs that locals believe should be theirs, despite a policy change in August designed to address the issue. In 2012, Singapore Prime Minister Lee Hsien Loong expressed worry that rising anti-foreigner sentiment can hurt the city-state’s global reputation.
These tension between different groups living in Singapore, yet somehow contrasted with the mutual enthusiasm for building a future together. The Singaporeans realised that these expats and migrants is good for the economy too.
Theses situations presents both challenges and opportunities for leaders of multinational companies with interests in Singapore. The country is growing at 4.5 per cent in almost every way. Investment in commerce, infrastructure, housing, transportation systems, culture and entertainment is immediately evident and there are opportunities in every direction. The government gives incentives to foreign businesses to operate there and limits non-residents’ tax on employment income to 15 per cent.
So, if your company decided to setup headquarter in Singapore or if you relocating to live and work in Singapore, the followings are the few guidelines:
- Singaporeans are significantly more capable and knowing in technical skills and know-how.
- Singaporeans are extremely welcoming and open to you when treated with respect.
- Inquire and listen more to the ideas of local employees or peers.
- Today, in the more advanced Singaporean economy, expats are expected to bring greater strategic and leadership capability to help maintain the nation’s regional competitive advantage.
- Your approach should be an opportunity to improve the lives of people in the Singapore and boost their economy, at the same time as growing your company’s presence and profits.
- Develop greater cross-cultural understanding and obtain cultural intelligence that will add value to your career and business.
Singapore is very western yet strong in its local culture. There’s no use of you insist on ‘being western’ in Singapore. Your greatest personal development and business success will grow from your ability to adapt to the Singaporean cultures, customs and practices.