Doing Business in Singapore: Guide for Indian Entrepreneurs!

India and Singapore are on a path of increasing economic integration. The ties that bind these countries have a long history – they are rooted in a common culture and a shared legacy of being former British colonies.

Since 1991 (as a result of India’s Look East trade policy), cultural exchange, immigration and military links between both countries have increased dramatically. By 2001, Singapore-India bilateral trade had increased to S$2.65 billion. In 2005, both countries signed the India-Singapore Comprehensive Economic Cooperation Agreement (CECA). By the next year, total trade grew four-fold to approximately S$11 billion.

Existing India Singapore Business Relationship

According to International Enterprise Singapore (the national agency responsible for spurring Singapore’s external economy) India became Singapore’s 10^th largest trading partner in 2010, registering S$30.7 billion in total trade, up from S$21.6 billion in 2009. Data from the Singapore Indian Chamber of Commerce and Industry (SICCI) shows that as of June 2011, Singapore’s Indian business community has become the single largest country-based business community in Singapore, having grown by 25% within less than a year.

The reasons for this deepening trade relationship are multi-fold. Singapore has long been an attractive business destination as companies and investors recognize the value of its unique geographical and political environment. Firms can access most of the major Asian markets from Singapore.

Singapore’s responsive government and efficient legal system results in a pro-business environment which offers low tax rates, sophisticated infrastructure, strong IP protection, progressive immigration policies and an abundance of skilled labour force. Together, these factors have continued to entice entrepreneurs and multinationals to set up business ventures in Singapore.

Many Indian firms and entrepreneurs have done so in recent years. In 2009, Bangalore-based infrastructure giant, GMR Group; and K S Oils, India’s leading integrated edible oil FMCG company set up their regional and international offices respectively in Singapore.

In the same year, August Media was founded in Singapore and within a year, had scored a $60 million deal with US animation giant Classic Media. In September 2010, rope wire manufacturer Usha Martin announced its plans to make Singapore its corporate engineering knowledge center as well as international headquarters. In May 2011, Tata Communications named Singapore as its official international headquarters.

For many Indian entrepreneurs and businesses, Singapore holds a cultural attraction as well. It represents harmonious balance between the East and West and offers a culture that is familiar and comfortable for many Indians. Singapore is a clean, well-functioning cosmopolitan city with low pollution levels, reliable public transportation, high quality educational institutions and increasingly colourful entertainment, dining and arts scene. The recent uptrend in the purchasing of property by Indian expats also demonstrates that many find Singapore an attractive place to live.

How to start a Business in Singapore

If you are considering Singapore as the location for your business, there are some important considerations that you should keep in mind. First of all, you must carefully consider the type of company you plan to setup. For individual foreign entrepreneurs, the clear choice is to incorporate a private limited Singapore company. Foreign companies on the other hand, have a choice of setting up a branch office, a subsidiary company or a representative office in Singapore.

Singapore law allows 100% foreign ownership of Singapore companies. A Singapore company can be registered with a minimum of one shareholder, one director, and a paid-up capital of $1 only. Each company must appoint a Singapore-based company secretary and registered address and file its annual return with company registrar and income tax authorities. Since most of the work in Singapore is computerized, it hardly takes 1 day to register a company in Singapore.

If you are a foreign entrepreneur, you must bear the following in mind as well. If you plan to relocate to Singapore to run your business, you must secure a relocation visa of type EntrePass(Entrepreneur Pass) or EmploymentPass. These two types of visas do not come under any quota system however they are subject to the applicant satisfying the necessary qualification criteria. Each application is reviewed and approved by authorities based on its own merits. Once your relocation visa is approved, your spouse and children can also relocate to Singapore on Dependant Passes and you are eligible to apply for permanent residence in due course.

Overall, setting up a business in Singapore is quite easy and simple. The country has consistently been ranked highly in international business surveys and reports. Just last year, Singapore was named the city with the highest ease of doing business ranking, highest quality of life ranking in Asia for expatriates, most competitive economy and most efficient bureaucracy by institutions such as the World Bank, ECA International, Gallup and World Economic Forum. To become a part of this growing and dynamic environment, consider setting up your business in Singapore.

Ina Jasni works for Janus Corporate Solutions - a leading Singapore-based firm that offers full-range of cost-effective Singapore company registration, relocation visa, accounting and ongoing compliance services to businesses worldwide. For additional information on the topics discussed here, you can visit Janus’s website

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5 Golden Rules

5 Golden Rules for Your Business Email !

"One shit deal…" This phrase got one of the largest investment companies in the world in a messy soup during the Global Financial Crisis. One of their employees wrote this to another in an email, which was used against them in the court of law. Well, that’s that…

Read on to know how you can avoid such blunders and a few rules that you should follow for your business email.

Communicate, Don’t Express

If you are writing an email to a client, customer or an employee, make sure that you communicate in that email. There is absolutely no reason why you should be expressive and generate a certain tone in the email.

For example, if you want to praise an employee for a job well done, you can write "You have done well this month. We appreciate your efforts" instead of "Wow! You’ve done a splendid job. How I wish you worked like this every month!" Use this rule for your business emails because being expressive in an email may feel warm, but that’s not why we’re here to do business, are we?

Some of you may disagree to what I just said, however, it is a habit and this emotive or overtly expressive communication may also lead you to write something exactly like "One shit deal…"

Keep it to the Point

"Hi John. How are you? Did you have a good vacation in Bangkok? I hope you visited the places I recommended and had lots of fun, if you know what I mean. You must show me pictures the next time we meet. Oh wait, don’t bother. I’ll check them on your facebook. Anyways, getting to the point, I wanted to speak to your regarding a recent business deal with one of your clients…."

If your emails read like this, stop! This rule for your business emails is critical because remember that your emails can be printed in any office around the world. Do you really want your clients or customers to read about your suggestions to John regarding his Bangkok trip?

Business emails should be to the point and address the issues they are meant for. Nothing more, nothing less.

Don’t write anything that can cause a legal burden

It is easy to get carried away in the heat of the moment and write something on the lines of "…We’ve done all we could. It is unfortunate you don’t like our product. But we can’t help you anymore"to an irate customer. But have you thought of the legal repercussions?

You could be sued for negligence or lack of customer support (although in India, the “suing” concept is still not there).

This rule for business emails is all about keeping the relevant legal framework in mind before hitting the send button. If you didn’t know already, your emails can be used against or for you in the court of law as written documentation proof.

So choose your words carefully when you write that next email from your business account.

Avoid personal forwards

Business email accounts are meant for professional emails only. No matter how funny or witty your forwards are, restrict them to your personal email id.

Believe us, no one wants to read about that funny husband-wife joke when they’re stressing about a critical business deal.

Always double check the recipients

Your emails could damage the goodwill or privacy of your business if it gets sent to the wrong recipient. If you think this advice regarding rules that you should follow for your business emails is meant for amateurs only, think again.

You don’t want internal communication floating around to your customer, or a conversation with your manager to reach your boss, do you?

In addition to the above mentioned rules to follow for business email, make sure you don’t use “sms lingo” in business emails or text messages. A ‘u’ instead of a ‘you’ could potentially break your business deal with a client. And yes, last but not the least – always make sure your spell-check is on – Spelling Mistakes in Business Email is a crime!

India is the third least honest nation

India is Third least honest nation on the Internet 

[India Cybercrime report]

According to latest Norton Cybercrime report – India is the third least honest nation on the Internet, with over half of adults saying they have lied on the internet.

One of the most significant finding of this report that is that 3 out 4 netizens have fallen to trap to some form of cybercrime (76%) – majority of them due to virus & malware attacks. That is above 10% above global average as well!

What is most surprising is even with above average levels of cybercrime in India, adults here have the strongest belief that cyber criminals will be brought to justice – In fact, they are most optimistic about it compared to their peers globally.

Interesting findings of Norton Cybercrime Report

• 8% Indians do not expect to be cyber-crime victims ever as compared to 3% globally and 10% Indians feel that they are completely safe online.
• 57% Indians feel that cyber criminals will NOT be brought to justice as compared to 79% globally.
• Once an individual has fallen prey to cybercrime, 58% of them change the way they conduct themselves online while very few individuals call Police or Banks to ensure safety!
• It takes average of 44 days and Rs. 5262 to resolve a cybercrime in India, while globally the average is 28 days and over USD 334 (Rs. 13500 approx.) !
• 55% of Indian online users have lied about their personal details as compared to 45% globally. 36% Indians have used fake online IDs (33% globally)
• 19% of Indian regret as to what they have done previously online and 41% believe that once your online reputation is ruined, nothing can be done about it.

There are 3 simple rules to follow which should help majority of cyber criminals to stay away –

• Never give out your passwords
• Keep your financial details safe and
• don’t open email / links from people you don’t know

Wedding bells are ringing again!

The Indian wedding season is round the corner and retailers are all set to bank on this opportunity once again. The shopping carnival has just begun for Indian customers.

Tuning in to this fervor are the retailers who look up to this time of the year as a big opportunity to get their cash registers ringing again. And this trend gets bigger every year with the market maturing to even a greater extent.

Retailers gear up for the D-Day 

The Indian wedding season generally runs from late August to September. The advent of the season means more business to every retailer. Every retailer awaits this wedding and the festive season to push in more and more business.

Like any other occasion, Gitanjali Jewels has come up with a number of exciting promotional offers to celebrate the forthcoming wedding season. Tamanna, one of the savings scheme started by the jewellery brand is every woman’s aspiration of turning her dream of owning her favorite piece of diamond jewellery into reality. Under this savings scheme, a consumer can manage his/her savings more efficiently and plan ahead to make that special purchase for a memorable occasion like that of a wedding.

The Bombay Store, on its part has introduced a range of exquisite evening bags in a wide selection of colours and styles. The Bombay Store has also introduced larger tote bags for the woman who needs more room to hold make up, jewellery and clothes for the wedding.  These tote bags dawn classy prints and add to the chic quotient. Come October and the Indian wedding extravaganza begins with great pomp and grandeur.  The lavish Indian weddings that have replaced the once conventional marriages have become a costlier affair.  Indians no longer keep a tight budget in hand while organising a wedding. It is during this time when people go on a shopping spree, without thinking about the returns.

Bullion sale scales up

More than anyone else, it is the bullion traders who benefit the most during this time. Despite the skyrocketing gold prices, the sale of gold ornaments rises as the wedding season draws closer. After occasions like Akshay Tritya and Dhanteras, wedding ceremonies account for the largest purchase of this shiny precious metal.  

Demand for gold in India increases every year at this time but reports have indicated that the rate at which consumers are buying this year are well above, as predicted by the Bombay Bullion Association. It is said that consumers are not only buying gold jewellery but the demand for investment coins have also gone up.

Finally...

The trend of splurging is nowhere going to stop for Indians. It is said that an Indian spends almost one fifth of his lifetime savings on a wedding ceremony and this means tremendous business opportunity for retailers. As the wedding season begins to wrap up by the end of December, the retailers begin stocking their stuff for the next year and come up with even more innovative ideas to lure more customers to their end.  

Toys Market

Toy market on a growth trajectory

The industry is growing at 30 per cent every year; more than 55 per cent of the Rs 6,000-crore Indian toy industry is still accounted for by imports, as projected by Toy Association of India, TAI.

Drivers

The burgeoning growth in organised retailing has helped domestic and international toys and games manufactures to target tier two and tier three cities and expand their market base deeper into India. The health hazards that cheap Chinese toys can pose has also made people aware and grow even more conscious. Both these factors helped domestic organised toy suppliers to grow in prominence in the Indian market through their innovative and quality toys and games. Also, the perception towards toys as a necessity for all round development of child will help in further driving this market. Growth in preschool, large population of children, increasing awareness of quality issues are other factors that is leading to the growth.

In 2010, the toys and games market was valued at INR 40 bn. The market is likely to grow with increased per capita income of Indians and the increased availability of world class toys. Health concerns associated with cheap materials are likely to reduce the popularity of cheaper imports and this is likely to help local toys manufacturers further.

Toy makers go green

Toy manufacturers in India have embarked on a green drive by initiating a recycling process and the use of non-toxic raw materials. In line with this green commitment TAI has recently launched its ‘We Care’ campaign. The campaign is designed to spread awareness among small toy manufacturers about the health hazards associated with using toxic materials in toys and also encouraging them to initiate recycling process.

A study by Delhi-based Centre for Science and Environment showed that 45 per cent of the toys made in India contain dangerous phthalates, a group of chemicals. Regular exposure to phthalates can cause asthma, skeletal defects, damage the male reproductive system and impair the lungs in children. Raw materials like high-density polyethylene (HDPE), styrene acrylonitrile (SAN) and acrylonitrile butadiene styrene (ABS) can be used instead which are less harmful.

The department of industrial policy and promotion (DIPP) is also coming up with guidelines for the industry in a month or two. “We are trying to create awareness among small manufacturers of this unorganised sector now. We have already urged all our 600-odd members to adopt non-toxic materials only and if possible, to recycle toys too,” said Raj Kumar, president of the Toy Association of India (TAI).

Looking ahead...

Growth in demand from relatively new sectors of toys and games such as video games, infant games and pre-school games is expected to steer the toy market in the years to come. Local manufacturers have to find out new means to tackle the Chinese challenge and build up more innovative products that will help grow this market. To do this, they are to do away with obsolete designs and old technologies.

Indian Insurance Industry: An Outlook

Insurance industry in India - Brief Introduction

The Indian insurance sector has witnessed significant growth - the number of life policies in force has increased nearly 12-fold over 2000-2010, and health insurance policies nearly 25-fold. Factors like better terms, availability of a wide variety of products (like unit-linked insurance products, whole life, maximum net asset value (NAV) guarantee etc), and government incentives have boosted the growth of the industry.

Data released by the Insurance Regulatory and Development Authority (IRDA) indicates that 23 life insurers registered Rs 18,282.86 crore (US$ 4.1 billion) by writing new policies during April-June 2011. State-owned Life Insurance Corporation (LIC) of India, collected premiums worth about Rs 13,341.97 crore (US$ 3 billion), while its private peers collected 4,940.89 crore (US$ 1.1 billion) as new first-year premium during the period.

In June 2011, industry collection stood at Rs 6,022.98 crore (US$ 1.35 billion). Revenue earned by selling new policies increased by 15.13 per cent in FY11, amounting to Rs 1,25,826.03 crore (US$ 28.24 billion) against 1,09,290.38 crore (US$ 24.53 billion) in FY10.

Insurance in India - Market Dynamics

Currently, the insurance industry, including life and non-life companies, has deployed a capital of about Rs 35,000 crore (US$ 7.8 billion) out of which Rs 26,000 crore (US$ 5.8 billion) comes from the life insurance segment. Foreign players have contributed about Rs 9,000 crore (US$ 2 billion).

General Insurance

The General insurance industry registered 22.35 per cent growth during the first quarter (April-June) of FY12 in terms of gross written premium.

Public sector player New India Assurance Ltd. grew 15.97 per cent during the first quarter of FY12 by collecting US$ 520 million through new policies.

Health Insurance

The second largest vertical under non-life insurance umbrella, health insurance is witnessing significant growth from the last two fiscals. The growth in premium is expected to continue at a compound annual growth rate (CAGR) of around 28.5 per cent during FY12-FY14. Rising healthcare costs and awareness, along with government support and incentives have attracted many private players in the sector. The huge demand supply gap in the industry provides large scope of growth and progress in the coming years.

Private and public players witnessed an increase of 33 per cent in terms of gross health insurance premium collected for FY11. Increase of insurance premium rates (in both retail and group insurance segments) by almost 30 per cent in last couple of years has boosted the industry growth, according to Sanjay Datta, Head of customer service for health and accidents, ICICI Lombard. Further, government-endorsed insurance schemes like Rashtriya Swasthya Bima Yojana and support from state governments have strengthened premium collections in the sector, as per Virendra Kumar, General Manager, health insurance, New India Assurance.

Indian Insurance Sector - Key Investments

• Hewlett-Packard (HP) owned IT services company Mphasis has acquired US-based software vendor Wyde Corporation. With this acquisition, Mphasis intends to align its applications and business process outsourcing (BPO) operations with Wyde’s insurance software platform Wynsure. The acquisition is the second one in insurance segment by Mphasis, which bought AIG’s captive unit in India in 2009.
• The Competition Commission of India (CCI) has given its nod to Reliance Industries Ltd. (RIL) to buy Bharti Group’s 74 per cent stake in each of Bharti AXA life and general insurance companies. Bharti Enterprises and French insurer AXA Group were in 74:26 joint venture (JV). While RIL will acquire 57 per cent of the pie, Reliance Industrial Infrastructure Ltd (RIIL) will buy the remaining 17 per cent held by Bharti in the two companies.
• India’s second largest public sector lender Punjab National Bank (PNB) is set to form a strategic alliance with insurance firm Metlife for its proposed life insurance business, wherein the bank would buy 30 per cent stake for an undisclosed amount. PNB also agreed to enter into a 10-year distribution tie-up with Metlife India. The deal is expected to close by the end of 2011.
• Cigna Corporation, American health insurance major, is planning to form a Joint Venture (JV) with an Indian company by August 2011 to mark its presence in the country's fast-growing health insurance sector.

Government Initiatives

IRDA has recently hinted at mandatory listing of insurance companies. Though the insurance Act doesn’t stipulate companies to go public, the regulator might make amendments to it to facilitate capital raising by the players. Initial Public Offer (IPO) guidelines for the insurance sector are also being worked upon. According to the draft guidelines released, only those players that have 10 years of operational experience and strong financial performance would be allowed access to the capital markets.

IRDA has also announced the release of much-awaited health insurance portability scheme across non-life insurance companies to be done on October 1, 2011. The proposed scheme would give policyholders discretion of moving to other insurer of their choice, whom they think is providing better product and service, while continuing with their policies. The launch of the scheme has been postponed from July 1 to October 1 so that the insurers are completely prepared to adopt the new concept.

Paving way for consolidation in general insurance sector, IRDA has notified merger & acquisition (M&A) guidelines for the players. The IRDA Scheme of Amalgamation and Transfer of General Insurance Business Regulations-2011 would apply with immediate effect to all private general insurance companies. Along with IRDA, the buyer would be mandated to receive nods from the Reserve Bank of India (RBI) and finance ministry, in case foreign direct investment (FDI) is involved. It would also require having approvals from the Securities and Exchange Board of India (SEBI) and CCI.

To improve the level of penetration in Indian markets, the sector regulator is contemplating allowing banks to sell products of two insurance companies each in life and non-life categories. The recommendation over bancassurance for such a move was made by a committee set up by IRDA itself. As per the current practice, a bank is allowed to sell products of one each in a life insurance company, a general and a health insurance firm.

Insurance in India - Road Ahead

India’s insurance industry is anticipated to reach US$ 350-400 billion in terms of premium income by 2020, making it among the top three life insurance markets, according to a report by a leading industry body and US-based Boston Consulting Group (BCG). India is expected to be one of the top 15 non-life insurance markets by 2020. The report further stated that penetration of the insurance industry, premium as percentage of the country's gross domestic product (GDP), has improved from 2.3 per cent in 2001 to 5.2 per cent in 2011.

(Exchange Rate Used: INR 1 = US$ 0.02244165 as on August 4, 2011)

References: IRDA publications, IBEF,press reports, media releases

Retailing

Retailing for Infants

Kids retailing in India has seen enormous growth, not just in urban areas but in rural areas also

The Indian retail industry is undergoing major revolutions. Retailing in India is gradually becoming the next boom industry. The consumer buying pattern and behavior are changing steadily. The growth of India's retail sector is not only limited to urban areas but also growing in rural areas. In the next five years, it is expected that, India's retail industry will expand more than 80 percent.

Organised retailing is slowly and steadily making its presence conspicuous in India and increasing its share as opposed to the unorganised retailing. With the coming of organised retail, various retail formats such as departmental stores, hypermarkets, supermarkets, malls, gaming zones, etc, have taken their market share. This segment is expected to touch an annual growth of around 35 percent. Hence, there is definitely considerable opportunity in this sector.

Understanding kids needs & demand

The trend for specialised retail is also growing in India. Today, there are many specialised retail stores taking care of specific needs of men, women, kids & infants exclusively. Kids’ retailing in India has seen enormous growth during the last decade. The scope of kids’ retailing is increasing as the industry expands phenomenally. Now it covers the entire gamut of apparel, sportswear, toys, eyewear, watches, stationery, footwear, perfumes and other accessories.

A close study of the evolution of the kids’ market shows that retailers dealing in juvenile products have an edge over their competitors, which eventually leads to a sustainable competitive advantage. Today, retailers are keener towards understanding the needs of kids than their parents.  Kids now have a wide range of branded merchandise. This allows them to add a wide range of flexibility to kids’ products in this market.

Players in the category

The kids wear retail market caters to kids aged up to 12 years. There is also a specialised market space for infants wear retail market segment that includes sales of garments for children between the ages of 0-2 years. Leading the kids' retail revolution is the apparel business, which accounts for almost 80 percent of revenue, with kids clothing in India following international trends. Some of the leading brands in kids apparel segment includes - Gini and Jony, Zapp!, Cinderella, Lilliput Kidswear, Raymond Apparel and Trent.

The recent entrant is PB Retail Ltd., a company in infant retail promoted by Pawan Agarwal. The company has opened their store in the brand name – My Mart, the first store of the company in the country which has an area size of 2000 sq.ft. My Mart caters to the children aged between newly born to five year olds. My Mart brings all the necessary goods for kids including apparel, footwear, accessories (bath and fashion), stationery, gifts and toys, Kids furniture etc.


Future growth

The kids retail industry is growing at a rate of 35 percent, which is a fairly good indicator of the promising prospect of this segment. As the market is still untapped, there is growth potential for new players to enter this segment. A more focused nature in understanding the changing demands, trends and growing needs of the kids segment and constant effort to better product will help retailer to become category leader.