CASE STUDY 3: Korean Enterprise Establishes Company in Singapore to Expand Regional Logistics Services

Company Overview

Company Z, a prominent South Korean logistics enterprise, specializes in providing transportation, warehousing, and global supply chain solutions to customers across various industries, from manufacturing and e-commerce to consumer goods. Company Z has a presence in numerous countries, but after researching and evaluating expansion opportunities in Asia, they decided to establish a company in Singapore to strengthen their presence and develop logistics services in ASEAN.

Challenges Before Establishing a Company in Singapore

• Difficulty Connecting with ASEAN Markets: Company Z recognized that providing efficient logistics services in Southeast Asian countries required a strategic hub in the region. The transportation, port, and warehousing systems in some ASEAN countries did not meet the efficiency and processing speed requirements of modern logistics services.
• Uneven Logistics Environment in the Region: Although countries like Thailand, Indonesia, and Malaysia have significant potential, the lack of uniformity in logistics infrastructure and legal regulations in each country made it difficult for Company Z to build an effective transportation and warehousing network.
• High Logistics Costs: Transportation and storage costs in ASEAN countries were sometimes suboptimal, especially when the company faced restrictive import-export regulations, taxes, and complex administrative procedures.

Solution: Establishing a Company in Singapore

After thoroughly researching investment location options in the region, Company Z decided to open an office in Singapore, considered a leading logistics hub with superior advantages for connecting with ASEAN markets.

1. Singapore - Leading Logistics Hub in Asia

Singapore has long been renowned for its modern and efficient logistics system, being one of the world's largest cargo transportation hubs. The Port of Singapore is one of the busiest and most developed ports globally, with the ability to handle diverse cargo, including containers and specialized goods. This helps Company Z save transportation costs and shorten delivery times, creating flexibility in cross-border logistics operations.

Additionally, Singapore has an advanced transportation and warehousing infrastructure network, helping Company Z optimize warehousing, distribution, and transportation processes in the ASEAN region. Having a major seaport, modern international airport, and road and rail systems connecting countries in the region makes it easy for Company Z to expand services to potential markets like Indonesia, Malaysia, Thailand, and Vietnam.

2. Logistics Support Policies and Tax Incentives

Singapore has developed a very business-friendly policy for international logistics enterprises. The Singaporean government continuously updates and improves infrastructure to serve the logistics industry, particularly in developing industrial and modern warehousing zones. The government also supports logistics businesses with funding programs and tax incentives, helping to minimize initial investment costs and improve operational efficiency.

Furthermore, Singapore has free trade agreements and double taxation avoidance agreements with many countries in the region and globally, which helps Company Z save costs incurred in import-export and international transactions.

3. Strategic Location to Connect with ASEAN Markets

With its strategic geographic location, Singapore becomes an important gateway connecting ASEAN markets with global markets. This is a crucial highlight for Company Z, as Singapore is not only a logistics hub for regional transactions but also helps the company access business development opportunities in emerging markets in the region.

Opening an office in Singapore also helps Company Z leverage efficient warehousing and transportation services to serve customers in neighboring countries. With a stable and transparent business environment, Singapore is an ideal destination for Company Z to deploy logistics services, ensuring reliability and high quality in every step of service provision.

Results After Establishing a Company in Singapore

• Rapid Growth in the ASEAN Region: After establishing a company in Singapore, Company Z quickly built a network of strategic partners in ASEAN countries. The company's logistics services have been strongly welcomed by customers in the region, helping the company expand its market and increase revenue.
• Reduced Logistics Costs: By optimizing the transportation and warehousing system in Singapore, Company Z has significantly reduced logistics costs while improving operational efficiency. Cross-border delivery services are performed quickly and accurately, increasing customer satisfaction.
• Expanded Customer and Partner Network: With advantages in infrastructure and tax incentives in Singapore, Company Z has expanded relationships with major partners in the logistics industry, including transportation, warehousing, and supply chain service providers. This helps the company strengthen its position and increase its presence in ASEAN markets.
• Sustainable and Long-Term Growth: Company Z has affirmed its position in the ASEAN region, not only with traditional logistics services but also in providing smart logistics solutions, supporting other industries such as e-commerce and manufacturing.

Conclusion

Establishing a company in Singapore has helped Company Z not only expand logistics services in ASEAN but also optimize costs, enhance operational efficiency, and build a strong partner network in the region. With strengths in modern logistics infrastructure, business support policies, and a strategic location connecting with ASEAN countries, Singapore has become a solid foundation for Company Z to develop sustainably in the global logistics industry.

SME HUB played a crucial role in supporting Company Z from the company establishment process in Singapore, providing in-depth consulting services on legal, tax, and business development strategies, helping the company achieve impressive results in the ASEAN market.