What I have learned watching foreign tech companies build in Singapore

When foreign technology companies first discuss the possibility of setting up operations in Singapore, the conversation is often centered around three primary aspects: potential customers, the availability of talent, or tax benefits. However, it is not uncommon for government funding to be a later consideration. This is surprising given the extensive ecosystem of grants, tax incentives, and investment support Singapore has to offer.

Nevertheless, there is an important distinction that many foreign founders tend to overlook: Singapore usually does not aim to fund a small foreign startup merely because it has incorporated here. The government's interest lies in companies that already possess something to contribute to Singapore. This could include proprietary technology, global traction, credible investors, meaningful research and development (R&D), or the capability to generate high-value jobs and capabilities.

Through my interactions with foreign technology companies exploring Singapore, I have developed a framework to understand market entry in four distinct ways. First, Singapore funding is typically geared towards scale-ups rather than startup formation. There is a common misconception that government grants primarily support startups.

However, in practice, the companies that tend to garner interest from the government are those with a more established global presence, a reputable institutional backing, a proven track record of proprietary technology, and a genuine plan to expand into Singapore. For R&D-focused companies, for example, the government's attention typically intensifies when there is a credible plan in place to establish a Singapore R&D team, hire multiple technical employees, and commit to substantial annual expenditure locally.

This approach contrasts significantly with a founder seeking a relatively small government grant to test an idea in Singapore. Furthermore, Singapore's Economic Development Board (EDB) offers various funding initiatives tailored to companies focused on research and innovation. The Research and Innovation Scheme for Companies (RIS(C)) is specifically designed to support companies developing R&D and innovation capabilities in Singapore.

The EDB's newer Refundable Investment Credit goes even further, offering support for significant investments in various areas, including headquarters activities, centres of excellence, R&D, digital services, and advanced manufacturing. The underlying lesson here is simple: companies that demonstrate traction in their business are much stronger candidates for government subsidies than those that rely solely on subsidies as a starting point.

Another recurring misunderstanding among foreign companies is the belief that they need Singaporean shareholders before they can receive government support. However, this is not always the case. I explain this funding landscape to foreign founders as consisting of two broad pathways. The first pathway pertains to foreign-owned companies making strategic investments in Singapore.

In this scenario, the Economic Development Board (EDB) becomes particularly relevant. Singapore's funding landscape offers various support mechanisms for R&D, significant capital investments, or strategic investments. Tax incentive programs are also available for qualifying headquarters and other high-value activities. The second pathway comes into play when a Singaporean company meets the local ownership requirements stipulated by Enterprise Singapore programmes.

Generally, these programmes require at least 30 per cent ownership by Singapore Citizens or Permanent Residents (Singapore PRs), tracing through to ultimate individual ownership. Historically, this pathway has included support for product development, internationalisation, and business transformation. The specific programmes are evolving, with the upcoming transition of several existing programmes, such as EDG, MRA, and PSG, into the new EDGE Grant, which is set to launch on September 30, 2026.

For foreign founders, it is crucial to understand that a wholly foreign-owned subsidiary is not automatically excluded from government support. Instead, it operates within a different segment of the ecosystem. The grant should ideally follow the Singaporean strategy rather than dictate it. A company should not determine its Singapore strategy based on which grant offers the most money.

Instead, the focus should be on understanding the underlying business objective. Does the company genuinely require an R&D team in Singapore? Is it establishing a regional headquarters? Are they building a centre of excellence? Does it need access to financial institutions, regulators, research institutes, or enterprise customers?

Is it making a substantial capital investment? Once these questions are addressed, one can work backward to identify the appropriate funding architecture. Many foreign technology companies choose Singapore not only because of the available grants but also due to the potential customer base. For fintech companies, this could mean access to major banks, financial institutions, and the broader financial ecosystem.

In the case of enterprise technology companies, Singapore can serve as a valuable regional launchpad, providing reference customers that prove beneficial when expanding into other Southeast Asian markets. Talent is also a significant factor for many foreign companies considering Singapore as a market entry point. While Singapore offers a highly skilled technical, commercial, and managerial talent pool, it is essential to acknowledge that it is not a low-cost hiring location.

Companies trying to exploit the benefits of lower wages in Singapore may face challenges in attracting and retaining top talent.