Over 27 percent of Singaporean small and medium enterprises (SMEs) are operating in Vietnam, and have their revenues generated from the Southeast Asian country, according to a recently released survey by a Singaporean government agency.

According to survey results released by International Enterprise (IE) Singapore on Tuesday, Vietnam stands 4th among five Southeast Asian countries where SMEs from the city-state have chosen to set up production bases or expand production.

Malaysia tops with 64 percent of firms, followed by Indonesia with 44 percent, Thailand (35 percent), Vietnam (27 percent) and the Philippines (23 percent).

In the global market, Malaysia still tops the list of foreign locations for Singaporean SMEs, followed by China and Indonesia.

The survey is conducted annually by an information and credit bureau, DP Information Group, under IE Singapore for local SMEs. 

Of the 2,836 Singaporean enterprises who participate in this survey, 51 percent said they had revenue from overseas operations, and they will expand their operations overseas in the next 12 months, higher than the 46 percent rate in last year’s survey.

According to the survey results, revenue from overseas operations of SMEs in Singapore this year decreased compared to last year.

The number of small and medium enterprises with more than 70 percent of revenue coming from overseas operations this year dropped to 21 percent, compared to 26 percent last year.

Meanwhile, the number of enterprises with foreign sales accounting for less than 30 percent of total revenue increased from 43 percent last year to 53 percent this year.

Mr. Chen Yew Nah, Managing Director of DP Information Group, said that SMEs have been changing the way they do business in order to overcome the difficulties caused by pressure on production costs and limited labor resources, and the biggest change is directed towards overseas operations and increased production capacity.

This year's survey shows that up to 49 percent of SMEs have difficulty recruiting staff, 48 percent encountered difficulties due to high labor costs and 31 percent had difficulty with high rent.

To overcome these difficulties, 54 percent of businesses said they would make full use of their manpower, while 28 percent of surveyed enterprises said they would apply automated technology.

International Enterprise (IE) Singapore, under the Ministry of Trade and Industry, is tasked by the government to drive Singapore’s external economy by spearheading the overseas growth of Singapore-based companies and promoting international trade.

As of the end of September this year, foreign direct investment (FDI) capital sourced from Singaporean firms stood 4th in Vietnam, with around $1.07 billion, including both newly registered capital and additional capital, accounting for 9.6 percent of the total investment in Vietnam.