If your company has found success in Singapore, it might be time to consider international business opportunities — and Europe can be an excellent place to start. Europe’s population of 747.8 million provides multiple promising markets for your company to tap into. Singapore and Europe are committed to shared trade standards, and the European Union (EU) is a major trading partner of the Association of Southeast Asian Nations (ASEAN).
When contemplating growing your company globally, you should consider the best European countries for Singapore-based businesses to expand to, such as the UK, the Netherlands, France, Germany, and Russia. You should also ensure you understand the visa requirements and the steps your company should take to conduct business compliantly in each country.
What makes Europe a good place for Singapore-based companies?
The EU is the world’s largest single market— with 27 countries, 446 million people in the EU, and about 67.1 million in the UK. ASEAN is also one of the world’s most powerful economic forces, with more than 600 million people comprising the market and 5.45 million in Singapore alone.
Singapore is the EU’s third-largest Asian investor, its largest ASEAN trading partner, and home to more than 14,000 Europe-based businesses. The EU is Singapore’s second-largest trading partner in both imports and exports, with trade exponentially increasing in the last decade. Machinery, vehicles, chemicals, and other manufactured goods are the most significant source of exports and imports between the regions.
Both regions are committed to environmental protection, health and safety norms, labor standards, and research and development. Throughout the Covid-19 pandemic, the EU and Singapore have maintained a commitment to free trade and continued their allegiance to recovery after trade declined during this period.
The regions also enjoy multiple agreements to help bolster open trade. The European Union-Singapore Free Trade Agreement (EUSFTA), implemented in 2019, is the first agreement of its type between the EU and an ASEAN member state.
EUSFTA improves market access for ease of trade in the following areas:
- Services and goods
- Recognition of safety labels
- Expedited customs procedures
- Intellectual property agreements
- Environmental protection
- Labor rights
The ultimate goal of the agreement is for nearly all tariffs to be lifted by 2025.
Another agreement is the Investment Protection Agreement, which protects and encourages investors by updating treaties, giving investors fair treatment, ensuring systems are in place for resolving disputes, and allowing governments to update laws and policies.
Expanding your Singapore-based business into Europe can bring a variety of benefits, including:
- The ability to connect with new markets
- Economic growth
- Diverse supply chains
- Access to global talent
- Preferential tariffs
- Government procurement opportunities
- Global brand awareness
What are the top European countries for Singapore-based companies?
When considering the best European countries to expand your Singapore-based business to, you need to consider international political relations, trade alliances, and each region’s top industries. EU member states include the Netherlands, France, and Germany. Therefore, these locations are afforded EUSFTA benefits. Other potential areas for growth include the UK and Russia.
1. The UK
The UK offers multiple business opportunities for Singapore-based companies thanks to shared legal, accounting, and political systems. After Brexit, the two countries signed the UK-Singapore Free Trade Agreement, which reduces or eliminates certain tariffs — and affords the UK the same benefits as EUSFTA.
The UK is the largest e-commerce market in Europe. Singapore recently launched the Singapore E-commerce Enterprises Development office in London to facilitate e-commerce between the two nations. Companies in digital marketing, fulfillment, and logistics can benefit from growth in the UK.
Singapore also has plans to implement a Digital Economy Agreement with the UK: the country’s first digital agreement in Europe. The pandemic has made companies realize the importance of digitalization, so a potential agreement between the two countries is timely. The deal with the UK would provide secure, open digital trade markets to encourage the growth of tech industries like cybersecurity.
Digital technology is a top industry in the UK. Companies in artificial intelligence, cloud communications, cybersecurity, data management, and workforce training initiatives can find success in this country. Fintech, which includes electronic payment services, wealth management platforms, accounting and insurance software, and data analytics, also offers substantial opportunities. The two countries are already part of a Fintech Bridge Alliance, which ensures shared regulations and connections to key industry stakeholders.
Beyond technology, companies in the lifestyle and fashion industry can also thrive by growing to the UK.
2. The Netherlands
As the fifth-largest market in Europe and a centralized European location, the Netherlands is a strategic partner for Singapore-based companies. The Netherlands is also Singapore’s third-largest trading partner in the EU, and the two countries enjoy free trade. The workforce in the Netherlands is multilingual and highly educated, and the country is a hub for innovation. It has a developed digital infrastructure that supports research and development, science, technology, and the government.
Companies in life sciences, health, and medical technology will thrive in the Netherlands, as the country is a world leader in the medical industry. The Netherlands has a plethora of public-private partnerships. The region also has a healthcare system that consistently ranks highly among European nations — with 12 research institutions, 82 hospitals, and early adoption of technology and devices.
The Dutch marketplace also supports innovation, ranking in the top 10 countries on the 2021 Global Innovation Index. The Netherlands is one of the best European countries for Singapore-based tech startups, with many coworking spaces, initiatives, and support like StartupDelta.
Companies in the logistics and transportation industry can take advantage of the country’s robust infrastructure and access to two major European cargo ports: Schiphol Airport and the Port of Rotterdam. The government is invested in smart mobility systems to improve traffic flow and increase sustainability in transportation. The Netherlands is the EU’s second-largest exporter, with food and pharmaceuticals as top exports.
3. France
Singapore is France’s top Southeast Asian trading partner. Trade between the two countries has continued to grow in recent years, and nearly 2,000 France-based companies are located in Singapore. The country has an extensive market of 67.4 million people. Its advanced transportation infrastructure and high-speed network connectivity also enable easy access to the rest of Europe.
In 2016, the countries announced that 2018 would be the France-Singapore Year of Innovation. This initiative aimed to strengthen scientific and technological relations between the nations. Six sectors were outlined in the agreement:
- Smart, sustainable cities
- Fintech
- Health and life sciences, including aging and biotechnologies
- Advanced manufacturing, including the aerospace sector
- Startups and emerging technologies
- Education, including continuing professional development
Both countries are also dedicated to recovery after the global Covid-19 pandemic. They announced a renewed dedication to the agricultural industry and food trade: France’s top industry. The country encourages stakeholders in the agri-food trade to collaborate and facilitate product movement.
Other top French industries include aerospace, automotive, and pharmaceutical manufacturing. France is an excellent market particularly for companies in the aerospace manufacturing sector, as it’s one of two countries in the world to export airliners, helicopters, fighter jets, and business jets. Paris, the capital city, is home to many international air trade shows like Aeromart Toulouse and the International Paris Air Show.
France is also one of the best European countries for Singapore-based startups. Station F, located in Paris, is the world’s largest startup center. About a quarter of the companies at the center are internationally owned. The campus supports entrepreneurs with workshops, government administration services, and housing.
4. Germany
Germany has the largest economy in Europe, a GPD of USD5.2 trillion, and a market size of 83.2 million. The country has the highest ratio of international patents globally, with 227 international patents per one million residents.
Germany’s well-connected transportation system and central location give companies easy access to the rest of Europe. The location makes the country ideal for companies in e-commerce, as shipping time is crucial. The country is constantly improving physical and electronic infrastructure as well, expanding fiber optics and implementing 5G to enhance mobile communications.
Manufacturing accounts for nearly a quarter of Germany’s economy. Advanced manufacturing, or Industry 4.0, has increased productivity in the sector while optimizing resource use. Companies in the automotive, chemicals, machinery, and electrical equipment manufacturing industries should consider expanding to Germany.
The country is also the world’s third-largest exporter of medical technology. However, it’s still a significant importer of medical equipment, as Germany hosts nearly 2,000 hospitals with 400,000 practicing physicians. The government is currently pushing to digitalize health care and grow the country’s telehealth capacities through the Digital Healthcare Act.
The country is part of EUSFTA, and German Entrepreneurship Asia (GE Asia) is also planning to help establish Singapore-based startups in Germany. The program has already supported more than 115 German startups in Southeast Asia. Now, GE Asia will use Scaler8 to help startups get established in Munich and Berlin.
Other beneficial agreements include the Singapore-Germany Double Tax Avoidance Agreement, which prevents employees who reside in both countries from having to pay income taxes twice, and the Germany-Singapore Bilateral Investment Treaty (BIT). The BIT ensures investors will be treated fairly. It allows investors to issue dispute claims and enables the free transfer of capital and returns.
5. Russia
Singapore and Russia have shared diplomatic relations for more than 50 years. The nations committed to a Joint Statement in 2009, in which they confirmed their dedication to shared economic, political, and cultural goals, especially in the science, technology, and communications sectors. Further, the countries established Russian Special Economic Zones in 2006 for greater economic cooperation.
With a population of 144.1 million and a GDP of USD2 trillion, Russia is one of the largest markets in the world. Russia’s economy is now stable despite a recession in recent years from a tumultuous oil market and the Covid-19 pandemic. The two countries already enjoy some trade cooperation, with more than 500 Russia-based companies operating in Singapore.
Russia also has a strategic location with access to both European and Asian markets. The country is part of the Eurasian Economic Union, a free trade alliance with Armenia, Belarus, Kazakhstan, and Kyrgyzstan.
The country is one of the world’s biggest oil and gas producers, and it has the largest reserves of mineral and energy resources in the world. Russia’s economy also heavily relies on consumer goods like food and clothing. Residents value high-quality products at low prices. However, thorough market research is crucial before deciding which consumer products will be most successful with customers’ varying tastes.
Technology is also a rising sector. Moscow is home to the Skolkovo Innovation Center, a self-proclaimed “science city” with more than 20,000 permanent residents. The center has multiple research goals in areas such as:
- Energy conservation
- Information technology
- Emerging biomedical technology and pharmaceuticals
- Nuclear technology
- Space technology
Because of Russia’s exponential growth in e-commerce, research and development, and technology, the country is a prime location for Singapore-based startups.
How will ETIAS visa requirements affect travel from Singapore to Europe?
The EU created the European Travel Information and Authorization System (ETIAS) visa waiver program to protect its borders. Its main goal is to detect threats associated with visitors entering Schengen Area countries. While Singapore residents can travel visa-free to the EU, they’ll have to obtain ETIAS travel authorization by the end of 2022 when visiting Europe for up to 90 days within a 180-day period. Singaporeans traveling to France can visit for up to three extra months.
To complete the ETIAS online application, you’ll need a valid passport, an email address, and a debit or credit card to pay the application fee. The application requires travel information and personal details. Applicants must also answer security questions about their health, criminal records, and recent travel to conflict zones.
Although some ETIAS applications take only minutes for automatic processing, others require further verification through manual processing. You’ll have to be approved by the ETIAS 72 hours before departing to Europe. Authorization is valid for three years before renewal is required.
If a team member hopes to live and work in a Schengen Area country, they must obtain a Schengen Visa by applying in person at the desired country’s national embassy or consulate. They’ll have to bring a passport with at least two blank pages, a passport photo, the application, and photocopies of any previous applications. The application process requires payment, round-trip flight reservations, valid health insurance, and proof of adequate finances for living in Schengen countries. Visas can be single, double, or multiple-entry.
Russia and the UK are not part of the Schengen Area, so you’ll want to review their specific travel requirements if you plan to grow your company in those countries. You may also want to consider hiring remote teams so employees can work for your international company without visas.
What do Singapore-based companies need for European growth?
When considering Singapore business expansion into Europe, you’ll need to:
- Evaluate your company: You should first decide whether your company has the income and stability for international growth. Your company will need to make adequate profits to cover the costs of new office spaces, transportation, equipment, and professional services. You might research operating costs in several countries, as prices differ depending on location. You should contemplate income taxes, sales taxes, cost of living, and borrowing costs. Reviewing company operations and stakeholders will help you build an international expansion strategy.
- Conduct market research: You’ll want to ensure there’s a market for your product or service before establishing your company in a new country. Research demographics, market size, and the competition in the region. You should also create an international marketing strategy to ensure you reach the desired demographic.
- Build a global team: Hiring strong employees from the start is crucial for international growth. Focus on building cultural competence to ensure your new team members feel comfortable and supported.
- Understand legal requirements: Labor laws differ between countries. A global Employer of Record can help you navigate payroll, employee benefits, income tax, and other areas to ensure you stay compliant wherever you expand to.
Let Globalization Partners help your Singapore-based business expand into Europe
Globalization Partners can support your company as it grows in Europe and beyond. Our global employment platform streamlines and automates onboarding, payroll, and hiring complexities — while maintaining compliance with country-specific laws. Contact us or request a proposal today to learn how we can help you stay compliant as you build global teams.
