International Enterprise (IE) Singapore, a government agency promoting international trade, and United Overseas Bank (UOB) have established a partnership to boost trade and international expansion for Singaporean companies. This agreement, solidified in a memorandum of understanding (MoU), marks IE Singapore’s first strategic partnership with a Singaporean bank.
The collaboration between IE Singapore and UOB aims to support 200 Singaporean companies in expanding overseas within the next three years. Their focus is primarily on Southeast Asia, China, Japan, and Europe. Companies in various sectors such as consumer goods, business services, digital solutions, infrastructure, real estate, tourism, hospitality, logistics, and trade are expected to benefit.
UOB will offer guidance and solutions related to trade financing for Singaporean companies expanding globally, aligning with IE Singapore’s strategy to develop wholesale trade in Singapore. Both organizations will collaborate on innovative initiatives and financial tools to simplify internationalization, including piloting new fintech solutions for increased cross-border trade efficiency.
Singaporean companies will gain access to customized trade and financing solutions through this partnership. This includes enhanced access to in-market connections, business partners, and professional service providers across Asia, along with potential collaborations with UOB’s global clientele. UOB will provide financial solutions such as supply chain financing, cross-border financing, venture debt, cash management and settlement, in addition to professional services such as public listings, bond issuances, and corporate finance advisory.
UOB’s Foreign Direct Investment (FDI) Advisory Unit, particularly proficient in cross-border banking, especially within Southeast Asia, will play a key role. Having assisted over 1,700 companies in achieving regional growth since 2011, the unit will collaborate with IE Singapore to enhance connections with local government agencies, industry partners, and professional service providers.
Chua Taik Him, Deputy CEO of IE Singapore, emphasized that this collaborative approach to connectivity enables both IE Singapore and UOB to connect with a wider range of Singaporean companies. This provides enhanced market insights, business intelligence, and a broader selection of financial solutions. By strengthening cross-border business infrastructure, the initiative aims to propel the growth of wholesale trade and overseas expansion for Singaporean companies.
Frederick Chin, MD and Head of Group Wholesale Banking at UOB, highlighted UOB’s dedication to supporting companies in achieving their growth aspirations both domestically and internationally. This is accomplished by leveraging their unique blend of local presence, expertise, market insights, regional network, and seamless cross-border solutions. The partnership with IE Singapore further strengthens their ability to support Singaporean companies expanding globally.
Lee Ark Boon, CEO of IE Singapore, acknowledged the heightened economic uncertainty in 2016. He noted that weak external demand is impacting Singapore’s trade and competition has intensified as regional economies continue to develop. However, Asia remains a positive prospect with significant opportunities for Singapore-based companies.
Lee highlighted the significance of connectivity for Singapore’s prosperity, given its size and open economy. Beginning as a trading hub, Singapore has evolved into a highly connected nation, with connectivity underpinning trade and investment. Beyond the physical flow of goods, connectivity now encompasses the integration of physical trade, logistics networks, and emerging financial and digital innovations. This presents opportunities for companies to develop new business models, providing a competitive edge.
Lee illustrated this point by referencing the evolving Singaporean wholesale trade sector, which necessitates connectivity in electronic payments, e-marketplaces, and other value-added services. He stressed the importance of seamlessly integrating key business services such as finance, logistics, and professional services into the overall ecosystem to facilitate smoother business and trade flows to and through Singapore.
The collaboration leverages the growing potential of ASEAN, particularly in intra-regional trade. Intra-ASEAN trade has nearly doubled in the past five years, reaching US$600 billion in 2015, and is projected to reach US$1 trillion by 2020. The region’s expanding middle class, increasing connectivity, and e-commerce growth are expected to drive demand for goods and services, further boosting cross-border and B2B transactions.
Lee pointed out that this partnership combines complementary strengths to provide enhanced financial and professional services. It also facilitates market access through each other’s overseas networks, benefiting Singaporean companies aiming for regional expansion, particularly within ASEAN. He emphasized the importance of ASEAN as a key market for Singapore, citing a recent study by the Ministry of Trade and Industry (MTI). This study revealed that the ASEAN-5 economies (Indonesia, Malaysia, Philippines, Thailand, and Vietnam) have surpassed the US as the largest final demand market for Singapore.
As the ASEAN Economic Community strengthens, Lee anticipates further growth in intra-ASEAN investments and trade flows, fueled by the region’s expanding middle class and urbanization. With intra-ASEAN trade projected to reach US$1 trillion by 2020, ASEAN’s role as Singapore’s economic hinterland presents substantial opportunities.
Wee Ee Cheong, Deputy Chairman and CEO of UOB, emphasized the shared vision and commitment of both organizations to supporting the growth of Singaporean businesses. He acknowledged the global economic slowdown, volatility, and unpredictability, which also affects Asia. However, Asia’s strengths, including its demographics, intra-regional business flows, and rising middle class, work in its favor. He noted ASEAN’s economic value of over US$2.5 trillion and its growth outpacing the EU and US.
Wee highlighted connectivity initiatives such as One Belt One Road, the ASEAN Economic Community, the Regional Comprehensive Economic Partnership, and the Free Trade Area of the Asia Pacific. These initiatives, along with ongoing digitalization, are expected to bring markets closer. He believes that continuous engagement, a practical and measured approach, and learning from past experiences can unlock the collective potential of the region.
A recent UOB Asian Enterprise Survey indicated that limited growth in domestic markets is a major obstacle for Singaporean enterprises. The survey also revealed that Singaporean companies seek strong local business connections when engaging in trade and expansion overseas. Through this MoU, UOB and IE Singapore will collaborate to provide the necessary connectivity for these companies venturing abroad, especially in Southeast Asia, China, Japan, and Europe.
Wee emphasized that the partnership will explore innovative tools and initiatives, including fintech solutions, to enhance cross-border trade efficiency for Singaporean companies. UOB’s experience as a former SME provides valuable insights into the challenges of establishing, growing, and expanding a business both domestically and regionally. They understand the importance of establishing the right partnerships to facilitate growth and expansion.
This collaboration builds on UOB’s previous partnership with IE Singapore under the Internationalization Finance Scheme, which aimed to support overseas expansion.