All eyes on Singapore
Why PNG businesses are setting up in the Lion City
Singapore is being taken seriously as a location for Papua New Guinean businesses. Last year, finance company Moni Plus announced a reverse takeover by Jaya Holdings that would see it listed on the Singapore Stock Exchange (SGX). The aim was to diversify the company’s shareholder base, according to managing director, David Kelso.
PNG’s biggest bank, Bank South Pacific, has also looked at listing on the SGX, although those plans have been shelved. Digicel, PNG’s biggest telco, relocated its regional headquarters from Sydney to Singapore.
Deloitte PNG managing partner, Benjamin Lee, says that Singapore plays a key role for companies attempting to explore business opportunities outside of PNG. He says it is also important for trade coming in and out of the country.
“Singapore’s geographical location allows it to play an important role in terms of origin of imports to Papua New Guinea and also exports from Papua New Guinea,” Lee says.
Director of PNG Economics, Paul Flanagan, says to expect an increase in Singaporeregistered companies with PNG linkages, as part of a globalising world.
“The key issue will be if Papua New Guinea’s growth rate in such registrations or linkages is growing faster or slower than other countries.
“This would be a partial metric to judge the hypothetical that Papua New Guinea could become a hub between Asia and the Pacific,” Flanagan adds.
Singapore’s free economy, with one of the lowest levels of taxes, makes the country an attractive option for companies setting up a base to invest in PNG, Lee says.
Singapore has become a global hub for businesses seeking to trade with multiple countries, including PNG, according to Westpac PNG managing director, Adrian Hughes.
“Several Singaporean businesses have shown a keen interest in investing in or starting new businesses in Papua New Guinea, and we’ve had many inquiries from new entrants trying to enter the Papua New Guinean market,” Hughes says.
The increasing number of Asianheadquartered multinationals opening operations in PNG shows interest in the region and will assist in providing sustainable economic growth for the country.
“While Singapore has been good for multinationals entering the Papua New Guinean market, it has also been critical for Papua New Guinean businesses offering maximum exposure through access to this global trading hub,” Hughes explains.
Foreign exchange shortages are a challenge for business in PNG and could be a driver for companies basing themselves in Singapore, Flanagan says.