Overseas revenue now comprises more than 40% of total earnings for one in two Singapore companies, according to the Singapore Business Federation’s (SBF) 2024 National Business Survey (NBS). With resilience and optimism, Singapore businesses are looking to expand internationally, with 59% of them planning for overseas growth this year, a slight rise from 57% in 2023. ASEAN nations remain popular destinations, particularly Vietnam, Indonesia, and Thailand. Yet, there is also growing interest in newer markets, such as the United Arab Emirates (UAE), Saudi Arabia, and New Zealand, each showing notable gains in appeal. UAE interest has doubled, increasing from 7% to 14%, while Saudi Arabia and New Zealand both saw a 6% rise in interest.
Although markets like Malaysia and China are among the top three for existing overseas operations, there has been a decline in new interest for both. Malaysia’s appeal dropped from 29% to 19%, and China decreased from 22% to 17%. Despite this shift, Malaysia, Indonesia, and China still rank as the most prominent overseas markets for Singapore-based businesses.
Rising overseas revenue and investment plans
Singapore businesses are increasingly relying on overseas operations for revenue, with 32% reporting a rise in revenue from international markets, up from 22% last year. Additionally, 56% of companies expect to see further increases in revenue from foreign markets over the next 12 months, with only 6% predicting a potential decline.
When it comes to direct investments, 30% of businesses plan to increase their overseas investments, while just 1% intend to reduce them. However, almost half (45%) anticipate no major changes in their investment strategies. These findings are based on responses from 520 companies across diverse sectors, with small and medium-sized enterprises (SMEs) accounting for 87% of participants and large firms making up the remaining 13%.
Challenges and support needed for global expansion
While international growth remains a focus, Singapore businesses are also facing several obstacles. Uncertainty in demand (52%), geopolitical tensions (42%), and unstable operating conditions (38%) are cited as the top barriers to overseas expansion. To address these challenges, companies are seeking assistance in managing regulatory requirements (49%), access to a central source of internationalisation information (41%), and networking support for partnerships (41%).
In response, businesses are investing in their teams. Seventy-two per cent are prepared to dedicate resources to training employees with skills for roles abroad through workshops. In addition, 69% plan to take part in platforms and networking activities to secure partnerships.
Supply chain issues have become less of a concern for many companies, with only 22% reporting disruption this year, a decrease from 35% in 2023. However, logistics delays have emerged as a significant issue, with an increase from 47% to 57%, making it a more pressing concern than raw material shortages and price fluctuations, which have dropped from 65% to 46%. In response to supply chain challenges, 55% of businesses are diversifying their suppliers and markets, while 42% are focusing on price renegotiations and partnering with logistics companies to reduce delays.
Perspectives from business leaders
SBF’s Chief Executive Officer, Mr Kok Ping Soon, praised the resilience and adaptability of Singapore businesses, stating, “It is heartening that despite the uncertainties in the external environment, more businesses are considering overseas expansion and expect growth in sales in the next 12 months. It reflects the resilience of our businesses and their recognition that scaling internationally is critical for their growth.”
Mr Kok also highlighted SBF’s role in helping businesses navigate global markets, mentioning that SBF has a dedicated team of market and FTA advisors, Singapore Enterprise Centres in key ASEAN cities, and the Centre for the Future of Trade and Investment (CFOTI). These resources are intended to support businesses in overcoming regulatory and market challenges. In 2024, SBF organised over 12 business missions, issued 1,000 market/FTA advisories, and supported 150 overseas projects.
Adding to the conversation, Mr S.S. Teo, Chairman of the Internationalisation Action Committee (IAC), spoke about the importance of choosing sustainable markets. “As global business complexities grow, it’s crucial for Singapore businesses to identify key markets where they can offer strong value propositions on a sustainable basis.”
In 2025, the IAC plans to extend its support to countries including Canada, Italy, Spain, Sweden, and parts of Eastern Europe, aided by the Europe Enterprise Network. The IAC also plans to provide SMEs with focused sessions featuring business leaders and government officials, offering valuable networking and knowledge-sharing opportunities. These initiatives aim to support the “Scaled Internationally” agenda, assisting Singapore businesses in learning, generating leads, establishing partnerships, and adapting their offerings for new markets.
With these resources and partnerships, Singapore businesses are well-positioned to explore markets beyond ASEAN, aiming for sustainable international growth despite the challenges in a complex global landscape.
