Silicon Southeast Asia: How Singapore became the region’s startup hatchery

SINGAPORE: A wave of high-growth startups from Thailand and Indonesia is leaving their home countries and choosing Singapore as their headquarters. This “Singapore drift” is more than just moving. It is a strategic decision shaped by the city-state’s exceptional business environment.

Consider Traveloka, the Indonesian online travel platform. Its move to Singapore represents more than a simple address change. It is a step into a stronger innovation scene. The platform now has immediate access to global investors, a stable regulatory climate, and an excellent foundation for entering international markets.

The appeal of Singapore is multifaceted. Unhindered by the bureaucratic hurdles one faces in Bangkok or Jakarta, a business can be launched in the city-state in three to five working days. It also gives investors security and confidence by permitting full foreign ownership, easy profit repatriation, and a transparent legal system.

Access to capital is a key advantage. According to research firm Pitchbook and government agency Enterprise Singapore, Singapore attracted 68% of startup funding in Southeast Asia in 2024. Sovereign wealth funds like Temasek and GIC provide a direct route to international investment rounds that are nearly absent in nearby markets. This financial setup turns Singapore into not just a location but a real driver of innovation.

Finding talent also boosts the city’s strong appeal. A diverse workforce and flexible work permit rules allow startups to create global teams easily. Multilingual professionals, excellent educational institutions, and an open immigration policy provide a rich and varied talent pool.

Singapore’s strategic location adds even more value. Its numerous free trade agreements and double taxation treaties create a smooth environment for regional and global growth. Startups can use the city as a strong launchpad into ASEAN markets and beyond, taking advantage of networks that would take years to establish elsewhere.

However, there are problems with this shift. Thailand and Indonesia could face significant brain drain, which threatens their developing innovation ecosystems. This loss of talent and resources may hinder future success.

Even with persistent regulatory challenges, limited funding options, and red tape in their home markets, Singapore remains appealing to foreign startups. Companies like Indonesia Traveloka and Thailand’s 2C2P highlight Singapore’s appeal as a destination for business internationalisation.

With Singapore’s finance centre representing a concentration of capital in the region, it also indicates a larger shift in Southeast Asian entrepreneurship—startups are no longer satisfied with local limits; they are now chasing environments that foster growth and advancement.