Singapore entices firms seeking Asian base

[Ulhas Joglekar]

7 January 2000
Singapore entices firms seeking Asian base
SINGAPORE: Singapore, once overshadowed by business hubs such as Hong Kong
and Tokyo, is winning over a growing number of companies seeking to put down
roots in Asia through its lower costs and more cosmopolitan outlook.
In 1999, 27 foreign companies set up regional headquarters in the
city-state, including Lucent Technologies, Honeywell, Cirque de Soleil and
UPS Worldwide Logistics
US oil giant Caltex relocated its corporate headquarters from Dallas in
March, while New Zealand's Brierley Investments is set to shift its head
office from Wellington.
Singapore's Economic Development Board (EDB), which oversees foreign
investments, said the rate of new arrivals marked a rise from previous
years.
Singapore's main draw is its lower costs compared to other major Asian
cities like Tokyo and Hong Kong.
Some estimates of business costs in Hong Kong -- Singapore's main regional
rival -- put them at around three times those of Singapore.
Singapore's authorities dangled tax breaks and other inducements, and ran an
aggressive campaign to lure firms away from their Hong Kong bases in the
run-up to, and since, the territory's return to Chinese control in mid-1997.
Singapore's authorities also used the Asian economic crisis as a cue to
further reduce its cost structure, unveiling a S$10.5 billion (US$6.4
billion) package of measures late in 1998 that cut business costs, including
halving the employers' contributions to the nation's compulsory pension
scheme.
Consequently, Singapore has been one of the main beneficiaries of a drain of
corporate headquarters and talent from Hong Kong. About 25 percent of the
corporate bases that were moved from Hong Kong in the past year were
relocated to Singapore, according to a survey by the American Chamber of
Commerce in Hong Kong. (Reuters)
For reprint rights: Times Syndication Service
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