Why Vietnamese Businesses Should Set Up a Trading Company in Singapore

Introduction

Vietnamese businesses are increasingly looking beyond their borders to expand operations, access international markets, and establish credibility with global partners. One of the most strategic moves for Vietnamese entrepreneurs is to set up a trading company in Singapore. Known for its business-friendly ecosystem, strong financial hub status, and international connectivity, Singapore provides Vietnamese firms with an ideal springboard into regional and global trade.

This article explores in detail why setting up a trading company in Singapore is a smart move for Vietnamese businesses, highlighting the benefits, opportunities, and long-term advantages.

1. Singapore as a Global Trade Hub

Singapore is consistently ranked as one of the world’s leading trading and logistics hubs. With a world-class port and airport, excellent shipping infrastructure, and strong connectivity to over 600 ports in 120 countries, the city-state is a natural base for trading activities.

For Vietnamese businesses, this global reach provides an opportunity to access not only ASEAN markets but also major economies in Europe, the Middle East, and the Americas. A trading company in Singapore can act as a central node to distribute Vietnamese goods—such as agricultural products, seafood, textiles, and electronics—to international buyers efficiently and reliably.

2. Political Stability and Transparent Legal Framework

Vietnamese entrepreneurs often face challenges in expanding internationally due to varying regulations and legal uncertainties in other countries. Singapore provides a stark contrast with its transparent, pro-business legal framework.

The country is known for its political stability, absence of corruption, and a strong rule of law. Contracts are enforceable, intellectual property is well protected, and foreign investors are given the same treatment as locals. This provides Vietnamese businesses the confidence that their investments and trading operations will be secure in the long run.

3. Strategic Location in Southeast Asia

Geographically, Singapore sits at the crossroads of major global shipping routes. Its location between the Indian Ocean and South China Sea makes it an essential hub for both East-West and intra-ASEAN trade.

For Vietnamese companies, having a trading presence in Singapore helps bridge access between the fast-growing ASEAN market of 650 million people and major global economies. Goods can be shipped from Vietnam to Singapore, consolidated, and then distributed worldwide with speed and efficiency.

4. Access to Free Trade Agreements (FTAs)

One of Singapore’s most compelling advantages is its extensive network of free trade agreements. It has signed over 27 FTAs with major economies, including the United States, European Union, China, Japan, India, Australia, and ASEAN.

For Vietnamese businesses, setting up a trading company in Singapore allows them to take advantage of preferential tariffs and market access that may not be available through Vietnam alone. This can significantly lower costs, improve competitiveness, and make Vietnamese products more attractive to global buyers.

5. Tax Benefits and Attractive Corporate Structure

Singapore’s tax regime is one of the most competitive in the world. The corporate tax rate is capped at 17%, with partial exemptions and incentives available for small and medium enterprises (SMEs). In many cases, effective tax rates are even lower.

Other benefits include:

• No capital gains tax

• No withholding tax on dividends

• Tax treaties with over 80 countries to avoid double taxation

For Vietnamese entrepreneurs, this creates a favorable environment to structure their trading operations efficiently. Profits earned through the Singapore entity can be reinvested into expansion or repatriated with minimal tax leakage.

6. Ease of Doing Business

Singapore consistently ranks among the top countries in the World Bank’s Ease of Doing Business index. Setting up a trading company is straightforward, with incorporation processes often completed within a few days.

Requirements are simple:

• At least one local director (can be fulfilled via professional corporate services)

• A registered local address

• Minimum capital requirement of just SGD 1

This accessibility allows Vietnamese entrepreneurs to establish their Singapore presence quickly, without burdensome red tape.

7. Strong Financial and Banking System

As a global financial hub, Singapore offers access to a wide range of banking and financing options. International banks, trade finance institutions, and fintech companies provide services tailored to trading companies, such as letters of credit, supply chain financing, and currency risk management.

Vietnamese businesses benefit from:

• Multi-currency accounts for handling international trade

• Strong foreign exchange facilities

• Access to venture capital and private equity investors

This financial infrastructure supports smoother global transactions and enhances credibility with international clients.

8. Reputation and Credibility for Global Trade

One of the challenges Vietnamese businesses face in international trade is building trust with overseas partners. A Singapore-registered trading company automatically enjoys a higher level of credibility.

Singapore’s reputation for integrity, compliance, and transparency helps businesses win contracts and negotiate better terms with buyers and suppliers. For instance, a Singapore-based entity trading Vietnamese coffee, seafood, or garments will often be perceived as more reliable and professional compared to operating solely out of Vietnam.

9. Gateway to ASEAN and Beyond

While Vietnam itself is an attractive manufacturing base, combining it with Singapore’s trading advantages creates a powerful synergy. Singapore is often seen as the corporate headquarters hub of ASEAN, where multinational corporations base their regional operations.

By establishing a Singapore trading company, Vietnamese firms can:

• Tap into regional supply chains

• Partner with MNCs operating in Singapore

• Leverage Singapore’s logistics for re-export to ASEAN, China, India, and beyond

This positions Vietnamese businesses as both local producers and regional/global traders.

10. Supportive Business Ecosystem

Singapore’s government actively supports foreign businesses through agencies like Enterprise Singapore, the Economic Development Board (EDB), and International Enterprise Singapore. These organizations provide advisory services, market insights, and funding assistance.

Vietnamese entrepreneurs can also benefit from a wide ecosystem of corporate service providers, legal firms, accountants, and consultants who specialize in helping overseas investors set up and scale operations smoothly.

11. Talent Pool and Workforce Availability

While a trading company may not require large manpower, Singapore provides access to a skilled and multilingual workforce. English is the official business language, while Chinese, Malay, and Tamil are also widely spoken—helping in communications with diverse trade partners.

Vietnamese companies can hire locally or bring in specialized staff under Singapore’s business-friendly employment pass framework, ensuring they have the right talent for growth.

12. Synergies with Vietnam’s Growing Economy

Vietnam is one of the fastest-growing economies in Asia, with strong manufacturing capabilities and an export-oriented economy. By pairing Vietnam’s production strength with Singapore’s trade infrastructure, businesses can maximize opportunities.

For example:

• Vietnamese seafood companies can use Singapore’s global logistics hub to expand exports to Europe and the U.S.

• Textile firms can base their distribution in Singapore to handle orders from global fashion brands.

• Tech startups can use Singapore’s legal and financial ecosystem to attract international investors.

This “Vietnam + Singapore” model is becoming increasingly popular as companies look to scale internationally.

13. Long-Term Growth and International Expansion

Setting up in Singapore is not just about immediate trade advantages—it is also about building a long-term platform for global expansion. A Singapore entity can easily set up subsidiaries in other countries, apply for trade licenses, and engage with global partners.

This creates flexibility for Vietnamese entrepreneurs to grow beyond ASEAN and establish themselves as credible global players.

Conclusion

For Vietnamese businesses aiming to expand internationally, setting up a trading company in Singapore offers a unique combination of advantages: global connectivity, political stability, tax efficiency, access to free trade agreements, and enhanced credibility.

Vietnam provides the production power, while Singapore provides the gateway to the world. Together, this combination enables Vietnamese entrepreneurs to reach new markets, build stronger partnerships, and secure long-term growth.

By leveraging Singapore’s business-friendly environment, Vietnamese companies are not only securing a stronger foothold in ASEAN but also establishing a launchpad for global success.