Mainland Firms Go Global Seizing Opportunities Tackling Challenges in SG - How to Stay Grounded?

In recent years, an increasing number of mainland Chinese companies have turned their eyes overseas-and Singapore, as a financial and business hub in Southeast Asia, has become the top destination for many making their first move abroad. From tech startups to cross-border e-commerce, from manufacturing firms to consulting services, it’s now common to see mainland enterprises setting up subsidiaries in Singapore. This trend is driven not only by strategic expansion goals but also by practical considerations amid shifting global dynamics. So why are so many mainland companies choosing Singapore? What challenges do they face along the way? And how can they truly succeed in establishing a strong foothold?

Let’s start with the numbers. According to the latest report from Singapore’s Accounting and Corporate Regulatory Authority ACRA, mainland China’s share of new business registrations in 2025 continues to rise-especially in sectors like fintech, artificial intelligence, and green energy. Meanwhile, well-known names such as ByteDance, Ant Group, and Xiaomi have already set up regional headquarters or local subsidiaries in Singapore, creating a noticeable clustering effect. This isn’t happenstance-it’s the result of careful, rational decision-making based on multiple advantages.

First, Singapore offers a highly attractive business environment. With its strong rule of law, competitive tax policies, free-flowing foreign exchange, and openness to foreign investment, it’s hard not to take notice. For example, Singapore’s corporate income tax rate stands at just 17%, and it operates under a territorial taxation system-meaning profits earned overseas aren’t taxed unless repatriated to Singapore. For mainland companies looking to go global while keeping tax costs low, this is a major win.

Second, there’s the geographical advantage. Sitting right at the heart of Southeast Asia, Singapore serves as a gateway to the broader Asia-Pacific region and especially the ten ASEAN countries. As the Regional Comprehensive Economic Partnership RCEP agreement takes deeper root, trade barriers within the region continue to fall. By establishing a presence in Singapore, companies can efficiently reach markets across Southeast Asia. A manager at a Shenzhen-based cross-border e-commerce firm put it simply After we set up our subsidiary here, logistics, customs clearance, and local operations became much smoother. Our response time to customers improved by at least 30%.

Third, talent availability plays a key role. Singapore boasts a deep pool of bilingual professionals fluent in both Chinese and English, with solid understanding of international standards-particularly in finance, law, and IT. This makes it easier for mainland companies to quickly build capable overseas teams. Plus, compared to Western markets, labor costs in Singapore offer better value for money without sacrificing quality.

But of course, opportunities come hand-in-hand with challenges. Many companies soon realize that registering a company is just the beginning-the real test lies in ongoing compliance and successful integration into the local landscape.

One major hurdle is legal and regulatory compliance. While Singapore’s overall business climate is transparent, its corporate laws, labor regulations, and tax filing requirements differ significantly from those on the mainland. For instance, all companies must submit audited financial statements annually and complete yearly renewals on time. Employers hiring locals also need to comply with the Central Provident Fund CPF system. Some small and medium-sized enterprises venturing overseas for the first time have ended up facing fines-or even damaged credit records-due to lack of awareness about these rules.

Then there’s the challenge of cultural differences in management. Even though language may not be a barrier, Singaporean workplaces prioritize efficiency and contractual accountability. Management styles tend to be flat and results-driven. Several companies have reported that relationship-based management approaches common on the mainland don’t translate well here. Employees in Singapore generally expect clear job responsibilities and regular performance feedback. Adapting leadership styles and building organizational structures that fit local culture has become a critical step for many incoming firms.

Competition should also not be underestimated. Despite its small size, Singapore hosts a dense concentration of multinational corporations and fast-growing startups from around the world. In high-demand sectors like fintech and logistics, the market is already crowded with established players. New entrants without a clear edge risk being pushed to the sidelines.

So how can mainland companies navigate these obstacles and truly establish themselves?

First, do your homework-don’t follow the crowd blindly. Setting up a company may seem straightforward, but the decision should align closely with your actual business model and long-term strategy. Are you doing it mainly for tax planning, or are you genuinely aiming to tap into Southeast Asian markets? If it’s the latter, you’ll need to research consumer behavior, regulatory frameworks, and competitors in advance.

Second, leverage professional service providers. Many companies partner with local law firms, accounting agencies, or business consultants to handle everything from company registration and bank account opening to tax registration. These experts help avoid costly mistakes and speed up the process. After all, when it comes to specialized tasks, leaving them to specialists usually pays off.

Third, focus on localization. Successful overseas expansion isn’t about copying your mainland playbook-it’s about adapting to the local context. Hiring local talent, respecting cultural norms, and engaging in community activities go a long way in helping your brand feel more at home. For example, one mainland edtech company gained quick trust among parents after launching a bilingual learning platform in Singapore-with curriculum co-designed by local teachers.

Fourth, adopt a long-term mindset. Expanding overseas isn’t a quick win. Returns might be slow at first, but if you’re moving in the right direction and stay committed, progress will come. As one entrepreneur who’s been operating in Singapore for three years put it The first two years felt like paying tuition. Only in the third year did I finally start getting it.

Setting up a subsidiary in Singapore is more than just a geographic shift-it’s a strategic move shaped by globalization and a true test of a company’s overall capabilities. It’s not just about changing office locations; it’s about upgrading management practices, mindsets, and even corporate culture. To seize the opportunity, companies must have the courage to take the first step. But to overcome the challenges, they need patience, preparation, and practical actions. Only then can they truly put down roots in this dynamic market-and grow further than ever before.