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Singapore a Capital Efficient Hub for It Start Ups

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Singapore: A Capital Efficient Hub for IT Start-ups

© 2010 IDA Singapore. All Rights Reserved.

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Infocomm Development Authority
> Chief Information Officer for Public Services
 

Architect e-government development plans Oversee annual ICT spend of >US$700M (FY08)

> Agency overseeing telecoms
 

Approve standards for telecom products and services Telecom industry regulator

www.ida.gov.sg

> Industry developer
 

Promote development of ICT industry Promote ICT adoption and usage

ICT – information & communication technology

© 2010 IDA Singapore. All Rights Reserved.

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Infocomm Investments Pte Ltd
> Investment arm of IDA, formed in 2000
   

ICT focus Manages over US$200M 1998–2005: 40 direct investments; 30 in Singapore (4 IPOs) 8 new investments committed since 2008

> Invest in Singapore-based growth stage companies  Average US$5M per company (up to US$15M) over


multiple rounds Co-invest with VCs

> Facilitate setup of foreign VC-backed companies in

Singapore

© 2010 IDA Singapore. All Rights Reserved.

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Singapore: World’s Easiest Place to Do Business
> 7,000 multi-national companies

Economy Singapore New Zealand United States Hong Kong Denmark Ireland Canada 2009 Rank 1 2 3 4 5 7 8 2008 Rank 1 2 3 4 5 8 7

60% regional headquarters 19 of top 20 Indian IT exporters have operations in Singapore Host to top IT players such as Huawei, TCL, Lenovo, ZTE

> 3,000 Indian enterprises


> 2,300 Chinese enterprises


Australia Norway

9 10

9 11

Source: Doing Business 2009 Report, World Bank

© 2010 IDA Singapore. All Rights Reserved.

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Singapore: World’s Easiest Place to Do Business

Source: IMD World Competitiveness Yearbook 2009

© 2010 IDA Singapore. All Rights Reserved.

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Singapore: 3rd most competitive economy globally according to WEF
WEF Global Competitiveness Index

Determinants of competitiveness:
• • • • • • • • • • • •
Source: The Global Competitiveness Report 2009-2010, World Economic Forum

Institutions Infrastructure Macroeconomic stability Health and primary education Higher education and training Goods market efficiency Labour market efficiency Financial market sophistication Technological readiness Market size Business sophistication Innovation

© 2010 IDA Singapore. All Rights Reserved.

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Singapore: Biggest destination for US direct investment in Asia
> US direct investments = US$106.53B

in 2008
> Returns on US investments in

Singapore remain among the highest worldwide
> US posted US$19B in income from

investment in Singapore in 2008, representing 18% returns

Source: The Business Times, 7 Sep 2009 & US Dept of Commerce

© 2010 IDA Singapore. All Rights Reserved.

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Singapore: Strategic Hub for Your Success
 Market Access

 Capital Efficiency
 Talent at Good Rates

 Intellectual Property Protection

© 2010 IDA Singapore. All Rights Reserved.

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The Singapore Advantage: Market Access
• • 28 Tbps to more than 100 countries Most extensive network of free trade agreements (FTAs) in Asia

Japan

Qatar
Jordan
India

China
Korea

US




Flights to 182 cities in 57 countries
200 shipping lines with links to some 600 ports in 123 countries

Kuwait
ASEAN Panama

Peru
Australia

NZ

Chile-NZBrunei

© 2010 IDA Singapore. All Rights Reserved.

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Singapore’s 15 FTAs (in force)

ASEAN Jan 1993

New Zealand Jan 2001

Japan Nov 2002

* EFTA - Switzerland, Liechtenstein, Norway, Iceland, Jan 2003

Australia Jul 2003

US Jan 2004

ASEAN-China, (Trade in Goods) Jul 2005 (Trade in Services) Jul 2007

Jordan Aug 2005

India Aug 2005

S. Korea Mar 2006

** TPSEP - Brunei, Chile, New Zealand May 2006

Panama Jul 2006

ASEAN-Korea, (Trade-in-Goods) Jun 2007

China Jan 2009

ASEAN-Japan (Trade-in-Goods) Jan 2009

* EFTA: Europe Free Trade Association

** TPSEP: Trans-Pacific Strategic Economic Partnership Agreement

© 2010 IDA Singapore. All Rights Reserved.

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Market Access India-Singapore CECA
> Capital gain tax exemption > Tariff reduced/eliminated > National treatment for investors

> “Guaranteed Access” for service suppliers
> Easy temporary entry for business people

© 2010 IDA Singapore. All Rights Reserved.

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Market Access China-Singapore FTA
> First Asian country to

sign FTA with China
> 85% of Singapore

exports to China in 2009 (95% in 2010)
> Ease of staff

deployment into China market

© 2010 IDA Singapore. All Rights Reserved.

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Capital Efficiency: Better ROI due to Competitive Corporate Tax Regime
> Corporate tax of 17% > No capital gains tax > Tax exemptions for Foreign

Sourced Income > R&D tax incentives
• •



150% tax deduction for R&D work done in Singapore R&D in new areas is tax deductible against existing income Conversion of 9% tax losses due to R&D to Cash Grant
Source: Budget Commentary, PWC Singapore, 22 Jan 2009

© 2010 IDA Singapore. All Rights Reserved.

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Friendly Tax Regime for Individuals

> Maximum personal income

tax rate of 20%
> No capital gains tax > No inheritance tax

Source: Budget Commentary, PWC Singapore, 22 Jan 2009

© 2010 IDA Singapore. All Rights Reserved.

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Talent at Good Rates : Diversified Talent Pool
> 140,800 IT professionals in 2009


#1 in ease of hiring (2009 World Bank Doing Business Rankings)

> 27,000 full-time equivalent researchers > 86,000 international students from 120 countries studying in

Singapore leading universities / research labs in Singapore e.g.
• • • • •

Singapore-MIT Game Lab Singapore-MIT Alliance for Research and Technology (SMART) Centre UIUC Advanced Digital Sciences Centre University of Chicago Graduate School of Business INSEAD

© 2010 IDA Singapore. All Rights Reserved.

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Talent at Good Rates : Diversified Talent Pool

Source: IMD World Competitiveness Yearbook 2009

© 2010 IDA Singapore. All Rights Reserved.

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Intellectual Property Protection: Strong IP Regime

> Signatory of major IP

conventions and treaties e.g. Patent Cooperation Treaty, WIPO Copyright Treaty
> Companies can file for IP

protection globally from Singapore

© 2010 IDA Singapore. All Rights Reserved.

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Infocomm Usage & Accessibility on the Rise
Mobile Phone Penetration
2005 2006 2007 2008 97.8% 103.4% 122.5% 131.0%

Feb 2010

137.6%

Household Broadband Penetration Rate
2005 2006 2007 2008 Feb 2010 50.8% 61.1% 76.9%

99.9%
152.1%
* includes wireless broadband subscriptions

© 2010 IDA Singapore. All Rights Reserved.

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Next Generation Nationwide Broadband Network
> A nationwide ultra-high speed, all-fibre broadband, access speed of

1Gbps and above
> Opens new doors to economic opportunities, business growth and

social vibrancy
> Covers all physical addresses including homes, schools, government

buildings, businesses, hospitals, outdoor locations…
> 60% of homes and offices to be connected by 2010, 95% by 2012
> Platform for R&D prior to commercial launch

© 2010 IDA Singapore. All Rights Reserved.

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Singapore’s Mobile Industry
• Mobile Industry Revenue in 2008: US$3,032M • Growth of 18.9% from 2007 (US$2,551M) • Telco mobile revenue, mobile internet data, etc (ST, SH, M1) • Mobile messaging • Mobile entertainment • Mobile enterprise applications (e.g., email) • Mobile video services • Mobile TV • Mobile VAS (e.g., SMS, MMS)

Source: IDC February 2009

© 2010 IDA Singapore. All Rights Reserved.

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Singapore’s Mobile Statistics
• 3G mobile phone penetration: 51.1% • Web and media-enabled mobile phones: 33% compared with global average of 13% • Number of 3G subscriptions: 2,473,600 at end Q408 (6% growth over previous quarter) • Growth of HSPA subscribers grew by 20% in Q408 to 278,064

• Growth of average monthly mobile data transfer over 2G and 3.xG for 4Q08 was 103.8% (985,223,401 MB)

Source: IDC February 2009

© 2010 IDA Singapore. All Rights Reserved.

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© 2010 IDA Singapore. All Rights Reserved.

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Examples of VC-backed Companies with Engineering Centres in Singapore
Product / Service Enterprise cloud computing Mobile social networking Mobile development platform Online market research solutions Mobile advertising solutions NFC payment solutions Investment wiki Investors 3i, Cargill, O'Reilly AlphaTech Ventures, SAP Ventures, Partech, Woodside Accel Partners, DCM, Redpoint Ventures, Technology Venture Partners Open Ocean Capital (MySQL founders), Sting Capital BV Capital, Leapfrog Ventures BRM Capital, Opus Capital DFJ, Nokia Growth Partners, Alloy Ventures DCM

© 2010 IDA Singapore. All Rights Reserved.

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http://venturebeat.com/2010/02/15/special-report-starting-up-in-singapore/

© 2010 IDA Singapore. All Rights Reserved.

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SINGAPORE: AN INTELLIGENT NATION, A GLOBAL CITY POWERED BY INFOCOMM
www.ida.gov.sg www.infocommsingapore.sg

© 2010 IDA Singapore. All Rights Reserved.

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