Making money in Singapore

Singapore is a good place for Hungarian companies to make money locally and elsewhere in South-East Asia. Diplomacy&Trade asked Miklós Horváth, president of the Hungarian Foreign Trade Association (HFTA) how to prepare successful business deals in this city state.

Hungarian companies follow two strategies when seeking business in East Asia:

1. They either go to a less congested part of a country to avoid competition. For instance: in China instead of Beijing or Shanghai they go to another big regional city.

2. Or they find a good hub and cover a wider region from there.

Miklós Horváth suggests they choose the second option, he thinks there are three such hubs in South-East Asia: Singapore, Hong Kong and Taiwan.

These locales are very far away from Hungary which means it is not an option to travel a lot to and from to manage the business. It is better to establish a local company with a representative person or staff and coordinate the business from Hungary – he argues. He suggests businesses approach professional associations first and make direct contact with a given company later. In Singapore there are plenty of such organizations, they know their members and are able to provide orientation to a foreign company. Singapore Enterprise Federation is one of these associations, representing practically every major profession.

Exporting products to South-East Asian destinations is not an easy job but Singapore is an ideal gateway for Hungarian companies. There is an excellent logistic infrastructure, including professional distributors, based there and active in the region. However, the head of HFTA argues for services to export rather than compete with China or India on the production side.

„Hungarian IT companies can make good business deals in Singapore exporting their complex IT systems and softwares for corporate use. Companies in certain service sectors, such as MICE (Meetings, Incentives, Conferencing and Exhibitions) or pre-school education can also make a fortune there as they have excellent knowledge and experience.”, - ha added.

Asked about practical issues, concerning business negotiations, Horváth emphasized: „Time management is crucial. It is not really a problem to have several appointments in a single afternoon, local businessmen are used to that. They will come to your hotel's lobby for the first meeting. Good hotels are centrally located but expensive. However, do not forget they can serve as your temporary office as well. Apparel is also important, please take care about the appropriate cloths, because of the heat and humidity.”

Who will follow PATEC in Hungary?

Singaporean automotive components manufacturer PATEC established a plant in Miskolc seven years ago and announced its intention to extend that facility shortly. That is a good news for Hungary. Who will follow this company? We do not know yet. But there is a very effective state organization in Singapore, Enterprise International, which has a special program to support local companies start their investment in a foreign country. Tailored primarily to small and medium size companies, the Market Readiness Assistance program helps to conduct market research and provides the necessary business information on the country targeted. Experts say some of the manufacturers in the automotive and electronics sector may consider relocating their production to Europe in the future and Hungary can be on their shortlist too.