The government of Singapore defines small and medium enterprises (SMEs) as businesses which have a total annual revenue of S$100 million or less or those which employ 200 employees or fewer. SMEs are a vital part of the economy of Singapore because they are the foundation of Singapore’s corporate and business scene. In fact, approximately 99% of all business enterprises which are based in Singapore can be defined as SMEs. According to the latest statistics, approximately 49% of the GDP of Singapore is generated by the country’s SMEs. SMEs also employ around 65% of all of the workers in Singapore.
There are many foreign employees who work in Singapore due to the many benefits which they may receive by working there. Today, foreign involvement in SMEs has been increasing at a more rapid rate than that of local involvement in SMEs. Many foreigners are also not content with merely working in an SME; they have plans to own an SME of their own. Such a move is not only possible and legally permissible, but also encouraged by the government of Singapore. This is because the government of Singapore welcomes the contributions that foreign entrepreneurs might make towards the economic growth and development of the country through their business activities. Ownership of an SME is one such activity.
Ownership of Singapore SMEs by Foreigners
Today, just under 15% of all the SMEs in Singapore are owned by foreigners. This number has been increasing with each passing year. This is an encouraging development because in most cases, it is easier for a foreign-owned SME to expand to a foreign country than it is for a locally-owned one to do so. Due to the fact that foreigners who own an SME would already have existing ties to their home country, it would therefore only be natural and expected for such foreigners to expand the SME abroad. This is important because in recent times, local SME owners in Singapore have been somewhat reluctant to expand their SMEs’ operations to other countries. The reasons for this reluctance range from a lack of funds to uncertainty over the chances of business success in other countries to unfamiliarity with foreign markets. This is a somewhat disheartening turn of events because the expansion of SMEs as well as other businesses to other countries benefits Singapore’s economy. Such is the case because the revenue generated abroad can be used for the benefit and development of the SME’s business activities which are conducted in Singapore.