Southeast Asia is now becoming a powerhouse in the Financial Technology (FinTech) scene. Due to the insufficient financial inclusion in the ASEAN market, it ripens the region for different FinTech products and services. In 2018, it exceeded the USD5.7 billion invested in 2017 by 20%-30% [Business Insider]. And with Singapore leading in the FinTech industry, it has become the hub for many start-ups and investments.
Given the fact that Singapore is positioned as the key area for business and finance, the government is committed to nurturing the industry. It pledged USD166 million to develop its FinTech industry, which is driving the success of the country’s financial innovation [TechinAsia].
Do note that the rise of online shopping comprises a large portion of the FinTech market in Singapore. E-commerce spending is projected to reach USD5.4 billion in 2025. Moreover, 96.4% of Singapore’s aged 15 above owns at least one bank account [TechinAsia]. These factors make the country an excellent place to set up and invest in different financial innovations.
So, why should foreign investors start venturing in Singapore’s financial technology market? Find out and see how to have a straightforward offshore company formation.
Bolstering Singapore’s Economy through FinTech Investments
Why is it essential for businesses to tap into the potential of various financial technologies?
Monetary transactions occur daily all over the globe. As such, it offers massive potential for growth and development. And by using financial technology, it can enhance different monetary transactions as a straightforward and convenient solution.
This potential did not go past the discerning eyes of the investors and the Singaporean government. The country’s highly-skilled workforce and exemplary business regulatory framework solidify its status as the ASEAN leader in FinTech [StraitsTimes].
Foreign investors and entrepreneurs who are looking to take part in Singapore’s thriving economy should invest in digital payments sector. Total transaction value in this area is expected an annual growth rate of 11.7% from 2019-2023. The total amount will reach USD19.192 million by 2023.
After receiving a record of USD222 million investment funds in 2018, Singapore’s FinTech firms has attracted the largest funding (48.5%) in the ASEAN region [Singapore Business Review]. Since 2016, the country’s government have placed initiatives and grants. That way, innovations and investments in this field will continue to spur. It provided banks and FinTech businesses to experiment on their technology in a secured manner.
Government offices were established to assist local and foreign investments with regards to FinTech company formation. One primary example is the FinTech Office which is an online portal that provides advice to startups. It contains the various government grants and schemes and regulatory requirements in this industry.
For foreign entrepreneurs who are looking to start an offshore company in Singapore, it is important to know about the different grants and schemes. So, here is a list of some of the grants entrepreneurs can avail in Singapore:
Enterprise Development Grant
This grant took into effect in the Q4 of 2018 and replaced the Capability Development Grant. Currently managed by Enterprise Singapore, the grant will support up to 70% of qualifying project costs.
FinTech Regulatory Sandbox
To promote financial technology innovations, the Monetary Authority of Singapore (MAS) established the regulatory sandbox. Financial institutions and FinTech stakeholders will be able to experiment with their products and services in a safe space and duration. This means that MAS will loosen up specific legal and regulatory requirements for these projects.
Financial Sector Technology and Innovation (FSTI)
This scheme has launched the MAS to spur innovations in the country. MAS’ committed a USD166 million (S$225 million) over a five-year period. It aims to attract different financial institutions to set up their innovation labs in Singapore. The POC (Proof of Concept) scheme under FSTI allows applicants to receive funding support up to a maximum of USD147,560 (S$200,000) for up to 18 months.
Seek Experts for Offshore FinTech Company Formation
Singapore is truly a financial hub in the ASEAN region. The country’s robust infrastructure and technologically-skilled workforce make it a haven for business. Plus, the government provides various grants to nurture investments and innovations in the country.
That’s why it is important to consult with company formation experts to benefit from these grants. Contact DesFran today for advisory solutions and guidance about foreign company formation.
FinTech in Singapore: The future of our money, Straitstimes.com
Singapore snaps up lion’s share of ASEAN FinTech funding at US$222m in January-October 2018, Sbr.com.sg
Setting up your FinTech Business in Singapore, Mas.gov.sg
How Singapore is powering Asia’s FinTech boom, Techinasia.com
Southeast Asia is the best market for fintech, Businessinsider.com