Singapore today is among Asia's most resilient and most well-connected economies, offering stability, transparency and sound fundamentals even amidst global uncertainty. The city-state's strategic position at the crossroads of global trade routes, complemented by a pro-business environment and a robust legal system, makes it the ideal base for companies seeking to enter or expand in the region.
Singapore's highly regulated environment and rising cost structure means that expanding here requires more than a business plan - it requires preparedness. Many foreign-invested enterprises (FIEs) discover that ease of entry doesn’t always translate to ease of execution. Beneath the vast opportunities it offers, there is a maze of regulatory, operational and structural problems which challenge even the most experienced global firms.
This article explores the key considerations for businesses entering Singapore, highlighting the operational, financial, and governance hurdles they may encounter—and how strategic guidance can help address these challenges.
The intersection of trade policy and geopolitics is making Singapore’s market entry increasingly complex. Despite its commitment to free trade, recent global shifts show how quickly foreign policies can disrupt its integrated economy.
In early 2025, new U.S. tariffs on Asian exports—electronics and processed goods—shook regional supply chains and heightened geopolitical tensions. Singapore’s Ministry of Trade and Industry warned such moves threaten cross-border trade and investment flows vital to its export-driven economy.
These measures have added uncertainty for investors, prompting multinationals to rethink production strategies and risk exposure. Experts caution that fragmentation will raise costs, complicate investment decisions, and weaken Singapore’s appeal as a regional hub.
Non-tariff barriers—such as certification gaps and import licensing—further strain supply chains, underscoring Singapore’s dependence on global stability. To build resilience, Singapore formed an Economic Resilience Taskforce, but tariffs now influence more than trade—they shape investment timelines, cost structures, and geopolitical risk assessments central to doing business in the city-state.
Singapore’s rules-based system is a competitive advantage, yet its scope often overwhelms new entrants. Compliance extends far beyond the initial setup.
Strict reporting requirements enforced by the Accounting and Corporate Regulatory Authority (ACRA) ensure transparency but demand constant vigilance. Every business entity must appoint a resident director, maintain statutory registers, and submit timely annual returns. Failure to comply can result in penalties, audit alerts, or limitations on business operations.
Furthermore, Foreign-invested enterprises (FIEs) must adhere to Singapore’s Financial Reporting Standards (SFRS) and tax regulations set by the Inland Revenue Authority of Singapore (IRAS). Establishing robust internal controls and accounting practices from day one is essential to ensure accurate financial reporting and meet the high standards of governance expected in Singapore.
Expanding into Singapore requires sound governance structures and reliable local representation. By law, private limited companies must have at least one director who is an 'ordinary resident'—typically a citizen or Permanent Resident. With regulations regarding nominee arrangements tightening, your appointed directors must fully grasp their fiduciary responsibilities. Without qualified local leadership, you risk delays in incorporation, banking difficulties, and tax registration issues.
Beyond compliance, a resident director plays a critical role in opening bank accounts, and managing employment matters. Coordinating these activities demands seamless integration of corporate-secretarial, accounting, and HR functions to ensure full operational readiness.
Establishing an Efficient Operational Base
Despite the rise of digital operations, Singapore mandates that companies maintain a registered address and accessible statutory records. Many foreign entities eventually recognise that a physical presence is significant in building legitimacy with clients and banks.
However, operating in Singapore comes with cost pressures. It is consistently ranked as one of the world's most expensive cities for business. For smaller or newly established firms, sustaining a full in-house back-office team from the start is often impractical.
To optimise costs while staying compliant, many FIEs adopt lean operating models. Outsourcing functions such as accounting, payroll, and corporate compliance allows businesses to remain flexible. This approach frees your internal resources to focus on client engagement and expansion, rather than administrative burdens.
Securing Talent in a Tight Labour Market
Singapore employment is governed by a well-defined but stringent regulatory regime. The Ministry of Manpower (MOM) tightly controls work-pass eligibility, local-employment ratios and fair consideration criteria. For FIEs, adherence to these criteria is generally one of the most urgent concerns after incorporation.
Recent updates have raised the qualifying salary thresholds for Employment Passes and S Passes. Additionally, the Complementarity Assessment Framework (COMPASS) evaluates candidates based on salary, qualifications, diversity, and support for local employment. Firms must demonstrate a commitment to fair consideration of local candidates before hiring foreign staff.
Balancing these quotas with your hiring needs requires strategic workforce planning. Businesses must invest in the growth of local talent to remain competitive while ensuring your HR systems are robust enough to withstand regulatory audits.
Managing Operational Power and Manpower Costs
Singapore’s strength as a global hub also comes with cost pressures. The Singapore Business Federation reported that 75% of domestic companies listed manpower costs as their top operational challenge, while 58% listed general cost escalation as a key concern.
For multinational companies, the increased cost of doing business - from professional expenses to firm taxes and employee benefits - can have an impact on profitability, especially in the first few years of market entry.
It is challenging for most FIEs to get their cost structures right in terms of what to outsource, what to centralise and how to grow cost-efficiently. Without local cost benchmarks or performance information, they risk overspending or under-investing on issues that are critical.
Managing Cross-Border Tax Complexity
Singapore offers an efficient tax regime, but it is complex for businesses with cross-border operations. FIEs using Singapore as a regional hub must navigate double taxation agreements, transfer pricing regimes, and economic substance rules.
With global tax norms evolving—such as the implementation of Base Erosion and Profit Shifting (BEPS) 2.0—businesses must adjust their structures to avoid scrutiny or double taxation. Managing intercompany transactions across jurisdictions like Malaysia, Indonesia, and Vietnam demands careful documentation and a deep understanding of local tax incentives.
Building Governance, Risk, and Operational Continuity
As Singapore continues to be the top choice of expansion into Asia, maintaining good governance and risk management remains an ongoing necessity. The Monetary Authority of Singapore (MAS) and other regulators have raised expectations on corporate disclosure, cybersecurity and ESG reporting.
Many foreign businesses, particularly those entering the market for the first time, may lack dedicated compliance and internal audit functions. This absence of formal controls and processes exposes them to avoidable risks.
Establishing good governance—whether through internal policies, outsourced support, or formal accounting structures—is fundamental. It not only ensures compliance but also underpins your long-term operational resilience and viability.
Supporting your expansion with Clarity and Local Insight
Expanding into a new market requires more than a strategy - it demands a reliable partner who can provide local knowledge, regulatory insight, and operational support. RSM Singapore, as part of the global RSM network, brings a unique combination of regional expertise and international perspective to help businesses manage these complexities.
We support your journey through three core pillars:
Whether you are entering Singapore for the first time or expanding across Asia, RSM Singapore supports your business journey with a comprehensive business solution that provides the guidance and support needed to build a solid foundation, streamline operations and focus on growth with confidence.