Woman being interviewed. Photo by Canva.
Singaporean businesses are facing a new external challenge that can no longer be ignored. With the United States recently imposing a 10% tariff on most goods imported from Singapore, many exporters are now grappling with how to remain competitive in their largest or fastest-growing market.
While some may try to absorb the cost or pass it on to customers, the smartest companies are rethinking their operational footprint—and acting fast.
The True Impact of a 10% Tariff
At first glance, 10% may not seem like a huge number. But in high-volume export industries, it adds up quickly.
- A company exporting $5 million USD worth of goods annually to the US now faces an additional $500,000 in cost—overnight.
- This isn’t being invested in innovation, quality, or expansion—it’s a pure cost drag.
- Margins shrink, pricing power erodes, and global competitiveness drops.
And with rising interest rates, inflation, and tighter capital markets, most businesses don’t have the cushion to absorb such hits for long.
Why a Singapore-Only Cost Model Is Now Risky
Singapore has built its reputation as a regional HQ hub and innovation centre, and rightly so. But it’s also no secret that:
- Labor costs are among the highest in Southeast Asia
- Real estate, utilities, and corporate expenses add up quickly
- Export competitiveness is heavily dependent on global trade conditions
Add a US-imposed tariff to this equation, and the cost structure of Singapore-based operations becomes much harder to justify—especially when lower-cost alternatives exist just next door.
Malaysia: A Smart, Strategic Solution
Offshoring or expanding operations to Malaysia isn’t a new concept—but today, it’s no longer just an option. It’s a strategic necessity for companies that want to remain cost-efficient and globally competitive.
Here’s why Malaysia is an ideal nearshore partner:
- 30–50% lower salary benchmarks for comparable roles
- A large, English-speaking, educated talent pool
- Pro-business environment with established infrastructure
- Deep trade ties with key global markets
- Culturally and geographically aligned with Singapore
Whether it’s backend operations, customer service teams, logistics functions, or even part of your manufacturing base—Malaysia offers immediate cost relief and long-term strategic value.
Enter EOR: Employer of Record = Low-Risk Expansion
The good news? You don’t need to incorporate a local entity, hire a legal team, or spend months setting up in Malaysia.
That’s where EOR (Employer of Record) solutions come in.
With an EOR partner, Singaporean companies can:
- Hire and manage Malaysian talent in weeks
- Stay 100% compliant with local laws and payroll regulations
- Enjoy full flexibility—scale up or down as needed
- Avoid the long-term commitment and cost of building physical presence
It’s the perfect bridge between reacting to change and future-proofing your business.
It’s Not About Leaving Singapore—It’s About Thinking Smarter
This isn’t about abandoning Singapore’s strengths. It’s about acknowledging that a single-location model is no longer the safest—or smartest—approach in a volatile world.
By integrating Malaysia into your operational strategy, you:
- Reduce cost pressure
- Diversify risk
- Unlock access to new talent
- Future-proof your growth against trade shocks
Partner with Elitez for Employer of Record
If you’re looking to hire top Malaysian talent with ease, our Employer of Record services can help. Contact us today to learn how we can support your hiring needs!
In addition to Employer of Record services, businesses can benefit from working with Elitez, the leading recruitment agency in Singapore. We offer the best talent sourcing and placement. For specialized or high-level positions, our executive search firm can help identify the best candidates to drive business success. Contact us for more information.
