A Singapore-based management consulting firm, Asia Financial Consulting, plans to set foot in Bangladesh. Founder and Managing Director Jonathan Sim; who has vast experiences in corporate finance and currently manages a pool of international clients, talked about Bangladesh’s economy and its entrepreneurs’ potentialities with the Dhaka Tribune (DT) during his recent trip to Bangladesh.
DT: Please say something about your company.
Jonathan: We are a management consulting firm that assists foreign clients in taking advantage of the Singapore business system to do business in the country. We aim to be clients’ preferred business and financial partner by offering them total financial solutions. From setting up business to financial structuring, we are also able to advise clients within the corporate finance scope.
DT: Why do you plan to penetrate into Bangladesh?
Jonathan: I was invited by a close friend to explore the business potentials in Bangladesh. As an emerging country, I believe opportunities are plentiful here.
DT: Can you tell us more about the ‘total financial solutions’ of Asia Financial Consulting?
Jonathan: On the outlook in Singapore, setting up a company is not difficult. The basics are corporate secretarial services, accounting services and tax services. Asia Financial Consulting is alone with no other parties involved. We assist in both debt financing through banks or equity financing through private equities, venture capitals or joint ventures. When a business comes of age, we assist them to exit through the listing in the stocks exchange or trade sale to potential buyers. Generally, clients know that when they come to us, we will walk with them throughout their corporate journey.
DT: What I am hearing that Singapore has a competitive edge over the rest of the world in terms of corporate loans and tax benefits. How do you think companies here can compete in the global market and build a brand name like Singapore?
Jonathan: The positioning of Singapore and Bangladesh is different. You cannot compare an apple with an orange. Singapore naturally has an advantage from its geographical position. It has no natural resources and the vast majority growth of the country today is based on professional services. In this sense, Singapore has become one of the best places in the world to set up your holding company. Bangladesh is different. It has natural resources. It is also known as the second largest garments manufacturing country after China. Be realistic! You cannot compete with China when it comes to manufacturing. Hence, it is an achievement to be known for garments manufacturing. Policy-makers may want to consider loosening a little on businessmen moving abroad for branding and corporate loans. It helps companies build their brand name in the foreign market and at the same time apply for lower cost of borrowings. Will these help economic development? If yes, then why not?
DT: Could you compare the banking facilities and tax incentives offered by Singapore with Bangladesh?
Jonathan: I cannot compare, but I can give an insight about the facilities and taxes in Singapore. For banking facilities, you only need to look at the interest rate which is about one of the lowest in the world. Whether it is overdraft, term loans or even trade facilities, banks in Singapore offer one of the most attractive rates in the world. As for taxes, Singapore is one of the leading countries that continue to reduce corporate tax rates and introduce various tax incentives to attract and keep global investments.
For example, for each of the first three years of a newly-incorporated company, there is a 0% tax on the first S$100k taxable income, 8.5% tax on the next S$300k taxable income and any amount above that will be on a normal rate of 17%. Based on current policies, there are several more incentives that cover tax treaties and double tax agreements as well as tax treatment of losses etc.
DT: What sectors of Bangladesh particularly to you have potentials to grow?
Jonathan: From the point I arrived at the airport, I can see lots of potentials to grow in the country. Construction in this case is no doubt one of the biggest in Bangladesh. Of course, many parts of Dhaka city alone as I travelled open up my eyes for development. Generally as a whole, I see the construction and energy sectors as crucial sectors that will continue to have the highest demand over the next 20 years.
DT: Do you have any idea about our entrepreneurs and how are they efficient?
Jonathan: I can see the extremely big businessmen prospering as well as the start-up entrepreneurs who are trying to grow their businesses. I somehow sense obstacles in front of these guys; especially the start-up entrepreneurs. A lot of these issues are due to policies I believe. The business world today has evolved. You need to internationalise to gain knowledge of what is happening in other parts of the world and also how others operate their business. It is more than money matters. The knowledge gain adds to your approach in managing or expanding your business.
