Prepare for overseas expansion during these volatile times, DPM Gan tells Singapore companies

SINGAPORE – Amid rising global uncertainty as the US-Israeli conflict with Iran drags on with no clear resolution in sight, Singapore companies should capitalise on the current volatility to start drafting plans for overseas expansion.

This was Deputy Prime Minister Gan Kim Yong’s advice to Singapore businesses in an interview with the media, ahead of his visit to Germany from March 25 to 28 to build bilateral relations and strengthen economic ties between the two countries.

DPM Gan urged companies to broaden their international strategies rather than retreating to safety and focusing solely on domestic operations.

“The current situation reminds us that our economy is still a very small one, and we are subject to a lot of external factors and uncertainties which could potentially rock our economy,” he said.

Singapore must thus strengthen the anchor of its small domestic economy by expanding beyond its borders.

DPM Gan, who is also Minister for Trade and Industry, cited Singapore’s investments in Latin America, China and the US as being crucial to its access to much larger economies. “This would create stability and allow Singapore to sail through this period of uncertainties in a stable manner.”

He added that an overseas expansion strategy is a long-term process that could take years, so companies would need to start identifying potential markets and competitive sources of supplies.

Having an eye on the future now gives companies a head start and puts them in a stronger position to expand once the global situation has recovered.

“We need to address the immediate crisis, no doubt about that, but we must not lose sight of the longer-term strategy. Otherwise, after the crisis is over, we realise we are back to square one. We will take two steps back and then we lose the opportunities,” DPM Gan cautioned.

He also noted that overseas expansions carry their own challenges, as companies could find it difficult to operate in a foreign environment and find local partners to develop their businesses further.

They can tap a “toolbox of schemes” by the Government to support their internationalisation needs end to end, DPM Gan said.

Overseas expansions and investments would not only strengthen companies based in Singapore with better job creation, but also open up opportunities for Singaporeans to work overseas.

In his Budget speech on Feb 12, Prime Minister Lawrence Wong, who is also Finance Minister, announced a slew of measures to help companies venture overseas, including higher levels of support for them to internationalise.

These include a 40 per cent rebate on corporate income tax; increased support for grant schemes that help companies go international; and the enhanced Market Readiness Assistance grant to support companies in accessing new markets and deepening activities in existing overseas markets.