Financial Technology or Fintech has integrated seamlessly into our lives today, impacting the way we consume on a daily basis. We pay for our daily Grab commutes via credit card at a touch on our mobile devices. After a meal, we split the bill and pay instantly via PayNow. At the grocery mart, we skip the change digging and tap our FlashPay card at the checkout. These Fintech transactions have become commonplace to Singaporeans. As a nation readily embracing technological innovations, Singapore is well-placed to be a Fintech startup hotspot. Here are five key reasons why Singapore is the best place to set up your Fintech business.
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1. Governmental Support
As highlighted in Prime Minister Lee Hsien Loong’s National Rally speeches, our government has set their sights on a steady progress towards a Smart Nation. Officially launched in 2014, the Smart Nation initiative aims to position Singapore at the forefront of global Fintech development. Starting from preparing the next generation, schools in Singapore are on board in offering Fintech modules. From polytechnic to university levels, Fintech courses and internship opportunities are available. In 2017, the TechSkills Accelerators Fintech Collective was launched to equip professionals in the Fintech industry. Across the various levels of education and in the workforce, the government is determined to upskill local talent to ensure the nation stays relevant.
2. Funding Landscape
Financial support is an extension of the strong governmental support in Singapore. In 2015, the Monetary Authority of Singapore (MAS) announced its commitment to an investment of over $225 million over the next five years. Last year, Singapore hit a record US$229m of Fintech funding. SPRING Singapore is a government agency that champions financial and mentorship support locally. Its Startup SG Accelerator helps incubators and accelerators secure financial and mentorship investments. Another scheme is the Startup SG Equity, where the government and third party investors co-invest in a startup. For first-time entrepreneurs, SPRING Singapore also offers the Startup SG Founder programme. It offers startup capital grants up to S$30,000 through matching 3 SGD to every 1 SGD raised. ETHOZ is a partner of SPRING Singapore in providing SME Business Loan.
3. Experimentation Opportunities
To create a conducive environment for innovation, MAS introduced the regulatory sandbox program in 2016. The sandbox is essentially testing grounds for an entity to experiment and make mistakes. Upon successful application of a sandbox status, an entity is subject to relaxed legal and regulatory requirements within a defined space and duration. The removal of legislative impediments allows startups to test ideas in a safe and low-risk environment. Upon ability to fully comply with legal and regulatory requirements, the entity officially graduates from the sandbox program.
4. Legislative Stability
Another benefit of starting your Fintech business in Singapore is the strong legal framework. Under the British law and Singapore’s reliable judicial system, your intellectual property rights are well protected. This is especially pertinent in the Fintech industry where an entity’s key value lies in its intellectual property. Singapore’s transparent bureaucracy allows you to register your company in a few days. Comparatively, the red tape involved in other countries may delay the process, costing your business a window of opportunity. In addition, the tax rates in Singapore is also one of the lowest in the world, making it ideal for big-ticket businesses such as those in the Fintech industry.
5. The Talent Ecosystem
Singapore is home to over 400 Fintech companies which provide a multitude of products and services. There are over 20 Fintech research and innovation labs in Singapore. Set up by global banks and insurance companies, they include HSBC’s Innovation Lab, Aviva Digital Garage, Allianz Digital Labs, Block 71 at Ayer Rajah and Lattice 80. These hotspots are the Silicon Valleys of Singapore. Talents culminate in these areas to connect, collaborate and co-create.
In conclusion, Fintech is rapidly gaining ground across the globe due to its penetration ability. It allows both individuals and businesses to capitalize on it. Fintech creates access to countries and markets without having to set up physical offices. While a Fintech business is not limited by country, Singapore is solid ground to headquarter one due to the 5 key reasons above.
Looking to start your Fintech Business in Singapore? In partnership with SPRING Singapore, we provide SME Business Loan. For a non-obligatory discussion, call us now at 6654 7799. Alternatively, drop us an enquiry at email@example.com.