TODAY I HAVE TIME! BECAUSE IT IS NEW YEAR’S EVE! So I can finally work on a new business series that has been in my heart for a long time.
LONG POST AHEAD!
This series is written specially for ambitious Finns/ businesses in Finland which are thinking about expanding into the Asian market, which is infinitely bigger than the 5 million population in Finland. Asia however, is an extremely diverse region, so I can understand the high risk involved when people simply don’t know the market. It takes guts, honestly, to expand into a region or a country which has a culture so different from yours, in an era where the highest growth is concentrated in Asia!
My intention of writing this post:
Recently, a lot of high profile folks interested in the expansion into the Asian market added me on FaceBook and linkedin. I also had the huge privilege of having very brilliant discussions with some Finnish business leaders, genius classmates, and foreigners who ARE actually ambitious and feeling frustrated with the current system in Finland.
Why are ambitious people in Finland frustrated? I still think it is because of certain elements of a welfare state, which may or may not be compatible with the rapidly changing requirements of a global economy. In essence:
- Smart foreigners can’t get jobs that allow them to use skills from their education because they can’t speak Finnish at native levels, especially if they are not in the IT industry;
- Even smart Finns can’t get jobs because the Finnish economy now is so bad and there are not enough jobs to go around;
- The current business environment for small-and-medium-size firm will seldom allow you to make decent profits, so instead of having work-life balance as an entrepreneur, you gotta work even harder in Finland to make ends meet;
- When the Finnish government give grants, they seem to support big firms like Nokia more than SMEs, a “too big to fail” syndrome;
- It does not make sense to become an entrepreneur just to stay in Finland if you don’t have a good business plan; and
- No matter how good a business idea you have, you need a bigger market than 5mil. It’s simply the law of numbers. And the situation gets even worse in light of the planned austerity measures and prolonged recession in Finland.
SO–This post is for ambitious people/businesses of any size in Finland which want to expand their operations into Singapore and eventually Asia. This post is NOT for companies contented with status quo.
I am writing this post for entrepreneurs in Finland who want to consider the possibility of expanding their companies abroad to get more business and revenue. I feel every bit of their struggle in Finland which has been in a prolonged economic slump since 2008 and I want to assist this enterprising community in Finland in every possible way. You can expand into Asia AND do your part to do publicity for the Finnish brand; you can generate tons of value if you are an ambitious entrepreneur!
And frankly, you can be ambitious and balanced simultaneously. *winks*! This harder path is just not for everybody, and I understand that it is difficult for some to even conceptualize and empathize with such motivations. It’s up to you to freely choose, however! #YOLO
Am I qualified to write this post?
Well, somehow yes–but I will encourage you to doubt me freely. At the end of this post, IF you can even for a moment consider reaching out to the relevant Singaporean government agencies that I’d listed, IF for a moment you can feel some hope and receive some courage, I would regard this post as a success.
To deal with your doubts, I will also include professional Singaporean agencies for you to consult and they are perfectly qualified. These services are also free as they are paid for by the Singaporean government. Singapore is not ranked No.#1 for the world’s most business friendly city for nothing. There are also private consultancies which charge for consultation, but I’d encourage you to approach the efficient and professional civil servants at the relevant Singaporean agencies first, since the Singaporean taxpayers already paid for their services for you (Links at bottom).
Even if you are just contemplating the idea of expansion into Singapore, there is no harm to just asking for information, since it is free, and these are useful information to know. 😉
Also, I’d been through the process and have quite some networks in Singapore, so I know exactly how to register a business in Singapore, how to get it running, what grants are available and who YOU can turn to. This is because I have a registered social media consultancy firm in Singapore, which is doing not-bad. Here’s IKIGUIDE, our content marketing arm.
So if you are really confident about your innovative Finnish product/service and YOU would like a bigger market–contact those friendly business consultants and they will strategize with you and inform you about how the Singaporean government can support your expansion plans.
The last time I checked, Marimekko is already in Singapore and is managed by an excellent PR firm in SG. They’re doing pretty well with quite some high-profile local celebrity endorsement!
So let’s get started!
What is the possible significance of Singapore to a Finnish firm which wants the Asian market?
Usually foreign companies use Singapore as a stepping stone/ hub to Asia.
A very common strategy is as follow: Set up your company in business-friendly Singapore first, and then use Singapore as a base for expansion to bigger markets such as China, India, and ASEAN.
Okay let’s step back to think for a while. Why don’t companies in Finland expand to China directly? After all, the distance from Finland to China as compared to Finland and Singapore is shorter. Why is Singapore needed, and how is Singapore relevant?
The reason is very simple: Singapore can bridge the language and culture gap. The language and culture gap is PRECISELY why the potential of the Chinese market is underutilized in Finland currently. This is why sometimes Finns might even come across as racists to Asian folks. And THIS is where expansion to Singapore can help as part of the strategic plan to expand to Asia.
Let me share with you an anecdote of a cultural difference which really creates tension for everybody. When I was at the Helsinki airport this September, I realised that there weren’t any Chinese translators at the customs. ZERO!!!
Then, I met two very distressed Chinese tourists who were stuck at the customs, and the frowny Finnish custom officer was disapproving their suspicious travel documents. To be honest, the Chinese tourists might indeed come across as somewhat suspicious as their invitation expired by 3 weeks, and they actually told me that they are going to Norway by BOAT one day after arrival to Helsinki–so even I felt a bit suspicious.
But that aside, the distressed Chinese tourists spoke no English, and the customs officer could not understand each other. In desperation, one of the Chinese tourist asked me 你会说国语吗？？ (“Do you speak Mandarin?”) as I was standing behind them. And SO, I became their FREE translator. It took me an additional 15minutes to my flight which was already delayed, and my poor cutie Finnish Boyfriend had to wait so long outside for me. 🙁
Yet this experience frankly made me a bit disgusted–I started doubting the sincerity of Finns when they said they wanted to do business with China. Hello?! Chinese tourists is now Helsinki’s no. 1 largest tourist group, with Russians ranking 2nd. How can there not be Chinese translators at an AIRPORT? Where is the sincerity in doing the business with Chinese folks??!
So you see, in my view, the Chinese market’s potential is underutilized in Finland/to Finns BECAUSE:
- To Finnish folks— China/Chinese folks might come across as suspicious due to the huge culture gap. Chinese folks are great at doing business everywhere, due to Chinese philosophy. Chinese folks love elites, and they are okay with being really filthy rich (a.k.a no such thing as equality or maybe even taking refugees in). And coupled with all the fakes–fake luxury goods, fake eggs, fake this, fake that–come’on, it might have really seemed very very suspicious to the Finn. And–OH NO there are “no” human rights and “no” freedom of speech in China! So to a Finn, that might REALLY be infinitely suspicious! So you see, the ideological differences between Finnish and Chinese folks are huge.
- Now to Chinese folks— Finnish folks might come across as disrespectful. The logic is as follows: Seriously, you DO NOT go to China directly to do business, with ZERO love/knowledge for the culture. Chinese culture is super rich and vibrant, and honestly, no form of translation does justice to how beautiful the Chinese language and culture is! Personally I was from a rather prestigious bilingual English-Chinese high school in Singapore, and I did Chinese philosophy, literature and culture studies for 6 years. The Chinese culture is indirect, and any sustainable business relationships with Chinese folks take years to build.
- In addition, I think Finns tend to assume that the Chinese market is cheap. To enter the Chinese market, you gotta be prepared to have a huge marketing budget, which means you need a lot of money. To understand more, please read this excellent piece of analysis written by my genius Chinese classmate. So if you have no money at this point in time, just forget about expansion to China directly, because you’d fail and you’d be seen as extremely disrespectful.
In view of this, my business proposition of Singapore to a Finnish firm of any size is as follows:
As a Finnish firm, go to Singapore, hire Singaporean-Chinese (70% of the SG population) or China-Chinese folks (We have a lot of China-Chinese friends working as permanent residents in Singapore too), and from there expand to China.
The key idea here is that being effectively bilingual, Singaporeans can work as effective bridges of culture. So, we can understand how a Finn would think, and how a Chinese would think.
So far as I’d observed, this model totally works for service industries, such as foreign education and events in Singapore. So, since most Finns think that Finland is truly top in global education, then Singapore would be a rational choice for expansion to Asia, because Asians in general spend a lot on education.
If you want the Indian market, basically repeat the same method with a Singaporean-Indian or India-Indians. They are easy to find and hire in Singapore, if you have a headquarters or some sort there.
So effectively, the Finnish firm would have prevented group-think IF the company has some sort of a intermediary. Singapore can provide that. In addition, our working language is English, since we are an ex-British colony. English is taught to every kid from kindergarten and nursery.
How to set up a company in Singapore
It’s quite easy to register a company in Singapore, of any size. Basically registration can be done online at ACRA and it takes a grand total of 1 day. For PTE registration, the cost is SGD300/200+Euros for a year, subjected to annual renewal. LLP and sole proprietorship are cheaper.
For bank accounts in Singapore, you’d need a physical office address. But a bank account is easy to set up in Singapore after obtaining the address too, within one week. There are a lot of commercial banks in Singapore–at least five.
For all new startups in Singapore, you get tax-free for 3 years for revenue under certain amounts. This is part of the Singaporean government way of encouraging the growth of startups in Singapore. What you need to take note of is your declared year of accounting–but if you register as a private limited (PTE) then you’d need a certified accountant to do your accounting.
I think highly-educated labor in Singapore is easy to find, and the overall wages and corporate tax rate are significantly lower than in Finland. But employers need to pay this thing called the Central Provision Fund (CPF) to employees, something like the pension, which is 17%.
Also, the Singaporean government is super generous with the business grants, provided you qualify and don’t mind doing the paperwork. Some grants popular with foreign-owned, Singapore-registered companies are the Productivity and Innovation Credit scheme (PIC) and the Innovation and Capability Voucher (ICV). Apparently it’s easy to qualify for them too. For a complete list of 100+ grants available to startups based in Singapore, click here. Personally, I’d had local and foreign friends who started successful companies that received more than > SGD100,000/ 60,000Euros of grants from the Singaporean government. Yes, the Singaporean government is THAT generous to locals and foreigners alike that it’s sometimes hard to believe.
A caveat really is the paperwork sometimes though, but if you don’t mind the paperwork, I personally do think it’s easy to do business in Singapore. People are in general quite stressed, so if you are an innovative firm selling really smart lifestyle products it’d sell. Also, if you are a B2B firm selling some high-tech machines or technology, most likely you would be super welcomed in Singapore as well, because we want more innovation in our economy.
So my view is that expanding first to Singapore actually decreases your overall risk in expanding to Asia, because there is less of a language/culture gap. So if you are relatively risk-averse BUT ambitious, Singapore is a good option to consider for expansion into Asia, BECAUSE you will also get strong government support. We have quite good business infrastructure in terms of banking, transportation and skilled labour, so to me if you have a reasonable business plan, you can “test out” in Singapore since it’s relatively cheaper as compared to other regional regions. In addition, the Singapore government is very strict on corruption, so with stable politics, the business and investment environment locally is stable and predictable.
Which Professional Government Agencies to Contact
- For small and medium size enterprises registered in Singapore (which can be done by ANYBODY), click here.
- SPRING Singapore
- International Enterprise Singapore
Just email the relevant agencies: Singapore is famous for efficiency, so you’d definitely get a reply from a person who can advise you on what to do next, and how to go about setting up a business by referring you to directed links and website. This is unlike the Finnish method where basically sometimes people don’t even reply emails. Also, if they do refer you to a governmental website, those websites are usually very detailed.
Now thing is, the Singapore business environment has English language as a working language, so there is no barrier to communication as long as you speak reasonable English (which most business Finnish folks do). So whenever they say “Singapore-based” companies, it does not mean “companies run by Singaporeans”, BUT “companies based in Singapore”. So you as a foreigner can use this to your advantage.
Yea, that’s the end of part I. But honestly, if you are a Finnish firm considering expansion to Asia, I’d encourage you to just take the first step to email the relevant Singapore government agencies I’d listed in the above. They’d reply with more information and consultants are actually really friendly–and it’s free, so you have nothing to lose!
If you have any questions about this post, just leave a comment here, or add me on linkedin. I’d write Part IIs and IIIs when I’m free! ^^ Hope this post has value-added you. 😉