November 2004 - Association of Dutch Businessmen

adb.org.sg

November 2004 - Association of Dutch Businessmen

The best food

in town

November 2004

MITA 373/03/2001


PROLOGUE

Dear Members,

Wim Samlal

After the presentation from SingTel’s CEO, Mr Lee Hsien Yang, in October, ADB’s next event

for November is a company visit. The number of attendants at Mr Lee’s presentation was

very encouraging, and confirms ADB’s strategy regarding speakers/presentations: “go for

quality even if it is at the expense of quantity”. What this means is that whenever we can’t

come up with a high-quality key-note speaker, we would skip the event for that month

rather than to search for a “second-rank” speaker just for the sake of having one event

every month.

On Tuesday 09 November, PSA (Port of Singapore Authority) has been so kind to host a visit

to one of their container terminals, preceded by an introduction at their head office (PSA

building). Singapore is not only one of the largest container ports in the world, but also one

of the most advanced in terms of automation and high-tech applications. This is, therefore,

certainly one of the company visits you don’t want to miss. Since the number of participants

is limited, I would advise you to register asap to ensure your attendance. Having worked

for the container division of Nedlloyd for a number of years, I can personally recommend

this visit to anyone, irrespective of your background, and I look forward to see many ADB

members on the 9th.

As the end of the year 2004 approaches, I have almost completed my first year as Board

member of ADB (I took up the position at the start of this year). This first year has been

very exciting to me personally. Despite the fact that all of us on the ADB Board are quite

busy with their work, travelling, and family, I was pleasantly surprised by the amount of

energy and enthusiasm that each of the Board members puts into the ADB. Last but not

least, this more so applies to all the members of the ADB committees to whom I personally

want to express my gratitude for their good work. I want to end this month’s prologue by

calling upon all ADB members to help us in doing our job, be it by giving feedback and

suggestions for new/improved activities, or simply by attending the monthly events.

Kind regards,

Wim Samlal

ADB Board member

Charlotte Ruegg

Nick van Holstein Ruud Lantinga Jeroen Keunen Frans van de Bospoort Bram Steenks

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Vol.14 • No. 11 • November 2004


A monthly publication of the

Association of Dutch Businessmen

ADB BOARD

Bram Steenks

President

Nick van Holstein Vice-President

Charlotte Ruegg Honorary Secretary

Wim Samlal

Honorary Treasurer

Jeroen Keunen

Member

Ruud Lantinga

Member

Frans van de Bospoort

Member

Contents

PROLOGUE 1

EDITORIAL COMMITTEE

Sascha Roosen

Olaf Botermans

Dorien Knaap

Brigitte Velema

Carolien Timmerman

Michael van Ommeren

Walter Moone

Mark Tilstra

SECRETARIAT

Carolien Timmerman

Mailing Address:

22 Camden Park, Singapore 299814

Telephone: 9790 5261 Fax: 6467 2639

email: adb@pacific.net.sg

REVIEW

SingTel, 125 years of History 3

SINGAPORE

A brief history of Tanjong Pagar 5

INTERVIEW

In the footsteps of Hamel

Frans Hampsink, president of the European

Chamber of Commerce in Korea 8

ASIAN FOOD

Orchard Road Car Park Hawker 10

DUTCH NEWS 12

Website : www.adb.org.sg

Email : webmaster@adb.org.sg

Editorial contributions for the next issue

may be sent or handed over to the ADB

Secretariat, before or on the day of the

monthly ADB meeting. The contents of

this magazine are partly based on information

received from third parties. The

Committee does not take responsibility

for the correctness of the articles.

Subscription/member fee: 100 S$ yearly.

Registration at the ADB Secretariat.

Produced by MCN Creative Associates Pte Ltd

Printed by Khoo Sun Printing Pte Ltd

MITA 373/03/2001

EDUCATION & SINGAPORE

A Singapore Adventure 14

BOOK REVIEW

Bill Bryson - A Short History of Nearly Everything 15

SPORTS

Wooden Shoe Hockey Tournament 2004 16

BIZZ AGENDA 17

KNOW YOUR TAX

Transfer pricing 18

POP & DROP A QUESTION

The importance of having nine lives,

and not being a Seagull 19

ASSOCIATION INFO 20

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Vol.14 • No. 11 • November 2004


REVIEW

SingTel, 125 years of History

By Michael van Ommeren

On October 4 th , the ADB audience had the honour to welcome Mr. Lee Hsien

Yang, President and CEO of SingTel. Mr. Lee spoke about the development of

SingTel from a Singapore national telephone company to Asia’s leading

communications group with operations and investments in more than 20 countries.

The invitation for Mr. Lee’s presentation was extended to the whole Dutch community in Singapore

and more than ninety people made their way to the Dutch Club.

Mr. Lee started his speech by making reference to the well known

Dutch business community in Singapore and Dutch companies often

leading the way. As a matter of fact a Dutch man, Pieter Winsemius

helped to establish the blue print for the Singapore economy.

The history of SingTel goes back to 1879 when the first

switch board was installed in Singapore,

part of the British Empire at that time.

Until the mid-1950s, telephone services

SingTel Group Structure

in Singapore were managed by British

interests. In 1955, the Singapore SingTel is majority owned by

Telephone Board (STB) was incorporated Temasek Holdings. Temasek has

as a statutory board with exclusive rights

an aggregate (direct and deemed)

to operate telephone service within

interest of 64.93% in SingTel’s

Singapore. This was followed by the

merger of STB and Telecommunications issued share capital. The Capital

Authority of Singapore (TAS) in 1974. Up until that time, STB was responsible Group Companies hold 4.99%

for local services, while TAS provided international services. In 1988, a while the rest of the shares

subsidiary Singapore Telecom International was formed. This marked the

are in public hands.

beginning of SingTel’s expansion into overseas markets. The corporatisation

of SingTel in 1992 was followed by its Initial Public Offering a year later.

Mr. Lee, who joined SingTel in 1994, stressed the success of the company and it’s revenue generating

capabilities culminating in a record turn over of S$ 12 billion for the year ending 31 March 2004. SingTel,

still the largest IPO ever on the main board of the Singapore Stock Exchange, forms around 10% of the

market capitalisation of the exchange. The company

employs currently 20.000 people of which more than 10.000

in Australia alone. Together with its regional partners,

SingTel is Asia’s largest multi-market mobile operator,

serving more than 52 million customers in six markets –

Australia, India, Indonesia, the Philippines, Singapore and

Thailand. The company is adding more than one million

new customers per month to its impressive client base.

SingTel is not purely a Singapore company anymore and

with a dual listing in Singapore and Sydney, it operates

in full compliance with the disclosure rules on financial

and management information.

Mr. Lee continued with the success stories of oversees

investments. One of the first ventures was an investment

in Mauritius, in a telephone company with about 1000

clients. He added “it was too expensive to have a

board meeting, as the cost of flying the board over would

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Vol.14 • No. 11 • November 2004


REVIEW

SingTel

acquired

Australia’s Optus

for 13 billion

Singapore

dollars. It turned

out that the

company was

bleeding 600

million dollars a

year but within

two years, a

positive cash

flow of one

billion dollars

was generated.

wipe out all profits”. Staying focussed

on core competencies – providing

telecommunication services – has proven

to be key to SingTel’s success. With this

approach, SingTel turned investments in

Netcom (Norway) and Belgacom (Belgium)

into a success with huge profit margins.

Mr. Lee seemed particularly proud on the

successful Belgacom IPO in 2004. Despite

ex-KPN’s Ben Verwaayen’s judgement

that SingTel was overpaying for the

Belgian company, the average Internal

Rate of Return in the period 1995 – 2004

was 17%!

SingTel has always steered their own

course when investing in other businesses

and that often requires patience and

Steenks thanking Mr. Lee

building up good relationships. Especially

as Mr. Lee added “if you are dealing with

Chinese Business men. They are generally superstitious and believe in the power of lucky numbers”.

This makes it hard to predict the outcome of their decisions as the Chinese often consult their own

‘experts’ to determine the best day to close a deal. Interestingly, SingTel makes a lot of money by

selling ‘lucky’ telephone numbers. That SingTel sometimes needs some luck as well is demonstrated by

the Optus deal in 2001. SingTel acquired Australia’s Optus for 13 billion Singapore dollars. It turned out

that the company was bleeding 600 million dollars a year but within two years, a positive cash flow of

one billion dollars was generated. Had the Australian dollar not appreciated so much, Mr. Lee would not

have been sure of his top job today as he added with a smile. Looking ahead, no one had expected the

cellular business to become as big as it is today. In 1993, the industry experts said that CT2 1 was going

to be the next thing. Nowadays people can watch video on their mobile phone. Mr. Lee has confidence

in the future, “SingTel maintains a very conservative balance sheet and with the rise of Asian countries

in the 21 st Century, I am confident that SingTel will remain a leading player in the future”.

When Mr. Lee finished his presentation, an interactive session with questions and answers followed.

One of the first questions taken from the audience was to shed some light on SingTel’s road map for

the next ten years. Mr. Lee’s vision is that SingTel will maintain a strong focus on the

region. As an example he mentioned the increased share that SingTel and the Ayala

family from the Philippines took in Globe Telecom when Deutsche Telecom wanted

to divest their share. He anticipated that the company will be taking more risk in

the future. Another interesting question was to get a view from Mr. Lee on convergence

from media and telecoms. Basically, the Optus deal in Australia demonstrated

that acquiring and owning content is a loss making business. Out of the 600

million dollar cash drain he spoke about earlier, 400 million was caused by

Optus’ Pay TV business. He was very firm in saying that SingTel “would not

want to produce and own content”. Asked what his view on VoIP 2 is and if this

poses a threat to IDD calls, Mr. Lee answered that less than 10% of the

total revenues comes from IDD calls and the cost of providing IDD is

also dropping. He added, “Providing long distance calls is a sunset

industry as the average collection rate per minute continues to

decline”.

1

CT2 is a second generation cordless telephone system for public networks that allows users to send but not to

receive telephone calls.

2

Voice over IP, telephone calls that are routed over the Internet

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Vol.14 • No. 11 • November 2004


SINGAPORE

A brief history of Tanjong Pagar

by Dorien Knaap

Tanjong Pagar has a very colourful history. Its location between the

harbour and Chinatown has always attracted people to live there. First,

there were the European settlers, founding their estates in the hilly

environment. In the second half of the 19th century, Tanjong Pagar became

the gateway for the immigrants in Singapore. A vibrant social life and

street culture developed in the neighbourhood, where many trades and

professions could be found. Craftsmen mingled with opium smokers,

rickshaw pullers, port workers, and, not to forget, the ‘ladies of the night’.

Tanjong Pagar

in Malay means

‘cape of stakes’

a name that

reflects it

origins as a

fishing village

situated on

a former

promontory.

Tanjong Pagar in Malay means ‘cape of stakes’

a name that reflects it origins as a fishing

village situated on a former promontory. Located

immediately south of Chinatown, the area, which

eventually became identified with the name

Tanjong Pagar originally, was made up of some small

hills and undulating countryside. In the early

years, after the founding of Singapore in 1819,

European settlers in search of country estates

quickly took up the hills, prized for elevated ground

en panoramic views. In 1824, the landowners built

Tanjong Pagar Road to improve movement to and

from their estates. Later, in the 1830s, soaring

market prices world-wide of nutmeg set off a

‘mania’ to plant nutmeg in Singapore. After it

turned out that the spice was successfully

cultivated on Fort Canning, the hills

of Tanjong Pagar were soon covered

with nutmeg plantations. European

planters, whose names still linger in

the area, such as Duxton, Guthrie,

Everton, Spottiswoode and Raeburn,

owned most of these. The success

of the nutmeg-plantations was

short-lived as prices suddenly

dropped and a destructive disease

wiped most crops and most

plantations were left deserted.

In the second half of the century of the 19th

century, the development of what eventually to

become Keppel Harbour provided the major

impetus for the economic growth of Tanjong Pagar.

The opening of the Suez Canal in 1869 elevated

Singapore’s pre-eminence as an entrepôt. The

traffic of ships passing through Singapore increased.

The Singapore River was no longer adequate to

meet shipping demands, as the arrival of large

steam could not find docking at the river. In the

earlier days, interests in a new harbour off the

coast at Tanjong Pagar had surfaced from time to

time. In 1864, plans were put into action with the

incorporation of the Tanjong Pagar Dock Company

Limited and a line of docks and wharves were

developed. Tanjong Pagar benefited form the

growth of both areas. Land values rose as Tanjong

Pagar began attracting the attention of wealthy

Chinese and Arab landowners and developers such

as Khoo Cheng Cheok, Look Yan Kit, Tan Cheng Tuan,

and the Aljunied, Alkaff and Alsagoff families.

Some of these families have left their marks in

the landscape in the form of street-names.

At the end of century, the area had become

increasingly urbanised. Hills, such as Mount Wallich

and Mount Palmer were levelled and roads were

laid to improve access to town. More and more

commercial and housing properties emerged. By

1892, the area between Neil Road and Tanjong

Pagar road was heavily built up with rows of two

and three storey shophouses. Some owners of these

houses were well-to-do residents, especially on

Duxton Hill, where many of the houses had a stable

for the horse carriage below.

The further development of the docks had a

significant social impact on the population profile

and character of Tanjong Pagar. In the early days,

Malays formed the bulk of the total

dockforce. In the 1870s, they were

replaced by the immigrant Chinese

labouring classes. Later, as Chinese

labour dried up, the Indians came

in. Tanjong Pagar functioned as the

‘gateway’ through which newly

arrived immigrants passed. The

area served as a clearing-house

for coolies as well as the initial

destination of many Chinese

immigrants. Indentured coolies

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Vol.14 • No. 11 • November 2004


SINGAPORE

lived in licensed coolie depôts established along

Tanjong Pagar, Anson and Neil Roads. Many others

lived in tenements and lodging houses, working

as dockhands, artisans, and hawkers or

in other occupations within the port

economy. The occupations were often

divided along bang (dialect) lines.

The Cantonese were mainly

warfingers, the Hakkas, blacksmiths

and the Hokkiens specialised in coal

handling. Another important niche in

the urban economy was the rickshaw

pullers, drawn mainly from the Hokkien,

Henghua and Hockchia bangs. The significance of

the rickshaw as a means of transportation was

underlined by the erection of the Jinrikisha Station

at the junction of Tanjong Pagar and Neil Road in

1904. At the turn of the

century, there was also a

Another important niche in the growing Indian presence

urban economy was the rickshaw comprising mainly port

pullers, drawn mainly from the workers employed by the

Dock Company. They lived

Hokkien, Henghua and Hockchia bangs.

in lodging houses in the

The significance of the rickshaw as a

Anson area and along

means of transportation was underlined Tanjong Pagar Road. As

by the erection of the Jinrikisha Station their numbers grew, the

at the junction of Tanjong Pagar area was nicknamed ‘Little

and Neil Road in 1904.

India’.

With the influx of the

large numbers of labourers,

Tanjong Pagar began to acquire a working class

character. Housing conditions worsened as a

result of overcrowding and poor sanitation. The

predominant feature became the coolie-lodging

house. Consequently, the wealthy Peranakan

Chinese families moved out to new suburban areas

such as Katong and Bukit Timah. Tanjong Pagar

became a place where immigrants lived, but also

a place of work and business. The shophouses

carried on a bustling retail in food and other

everyday necessities, and house small

industries, specialising in paper bags,

bicycle parts, rag and bone collection

and so forth. Alongside coolie lodging

houses and shops were brothels

and opium dens which provided

the coolies, mainly single men, with

a means to while away their spare

time. The notorious red light

districts within Tanjong Pagar included

Banda Street, Jiak Chuan, Keong Saik,

New Bridge and Teck Lim Roads. Opium dens

equipped with back rooms with raised platforms

and a range of opium-smoking paraphernalia were

a familiar sight in Duxton Road even after the

Second World War.

Streetlife in Tanjong Pagar was brisk and

raucous. Hawkers and peddlers plied their

wares along the five-foot-ways, treading their way

around obstruction such as shopkeepers’

merchandise on display and reclining coolies

smoking opium openly, while the streets teemed

with rickshaws, hackney carriages and after the

1920s, motor vehicles.

By the Second World War, Tanjong Pagar was

a predominantly working class area made up

essentially of a Hokkien Chinese majority and a

significant Indian minority. The neighbourhood

was a quiltwork of professions, comprising

craftsmen mingled with opium smokers, rickshaw

pullers, port workers and ‘ladies of the night’.

As a place which thrived within the ambit of both

the harbour and Chinatown, the area developed

a vibrant social life and street culture which drew

vigour from social institutions, racial, communal,

and clan-based ties as well as the seedier

elements of coolie culture.

Source: Portraits of Places. History, Community and Identity in Singapore (1995) and Singapore. A Pictorial

history 1819-2000 (1999).

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Vol.14 • No. 11 • November 2004


INTERVIEW

In the footsteps of Hamel

Frans Hampsink, president of the European Chamber of

Commerce in Korea By Walter Moone

In 1653 the Dutch ship “ de Sperwer “ shipwrecked

off the coast of Chejudo. One of the survivors

was the Dutchman Hendrik Hamel. On his return

to the Netherlands thirteen years later he wrote

a journal about his stay in Korea. This journal

was the first written document on Korea ever

published in Europe and it was also the first time

the West learnt more about the Korean society

and its culture. Hamel’s arrival also symbolises

the beginning of the Korea-Netherlands relations.

Today, another Dutchman works on the

relationships of Korea and the West. Dutchman

Frans Hampsink was recently appointment for his

second term as president of the European

Chamber of Commerce in Korea (EUCCK). The

EUCCK plays an important role in attracting

foreign investment to Korea. In a spirit to broaden

its capabilities it also opened a Corresponding

Office in Pyeongyang and a Liaison Office in

Brussels. Like Hamel, Hampsink plans to

strengthen the relationship between Europe

and Korea: ´I will speak with a louder voice,

expressing our needs just a little bit stronger´.

How long have you been working in Korea and

what has been your involvement with the

European Chamber?

I have been living in South Korea for over 10 years,

of which 9 years being an active member of the

EUCKK. I am the president of the Seoul based

company UTS/R&L Worldwide Movers Korea. In my

first year with the EUCCK I was chairman of the

committee and in my second year became vicepresident.

After being VP for 7 years I became

president of the EUCKK for the first time and did

this for six months. After a short sabbatical from

the EUCKK I was appointed for a second term as

president in May this year.

What is the role of the European Chamber in

Korea?

The EUCKK is already quite influential in South

Korea. We get a lot of publicity and authorities

are willing to listen. In my capacity as president

of the EUCKK I have recently been appointed as

one of the members of the advisory group to the

Blue House (the equivalent of the US White House)

on Investment and Economic affairs and we have

access to the highest political levels, including

the president. Each year we publish a book of

trade issues and without exception we have

received a timely and thorough response from

South Korean authorities on the issues raised.

However, the Korean still lean towards the

American business community. With the recent

expansion of the EU to 25 countries Europe is

becoming even more important to Korea. Europe

is the future for Asia and Asia is the future for

Europe. That is why I will speak with a louder

voice and make some changes to become more

effective. We will express our needs just a little

bit stronger.

How do EU companies perceive investing in

South Korea and what are the main challenges

they face when coming to Korea?

EU companies already invested heavily in Korea.

The Netherlands is one of the biggest investors,

although this picture is bit distorted. A lot of big

companies that are not from Dutch origin are

registered in the Netherlands and as such counted

as a ´Dutch´ enterprise.

On the second issue of challenges I would say

that when you come well prepared and organised

establishing a business in Korea is not difficult.

The government is offering a lot of incentives,

especially when a company will be located in one

of the Free Trade Zones. It is however important

to follow the right track. It is the European

Chamber’s role to facilitate this process, not only

facilitating European companies, but also the local

governments in dealing with these companies.

Regional governments often don’t have enough

expertise in marketing within the European

context and frequently give up. This is why we

signed MoU´s with specific regions in Korea to

assist the regional governments to target specific

European companies within specific industries, be

it banking, IT or logistics. We plan to support their

foreign investment activity since with us they can

learn how to negotiate and market themselves.

Korean culture is often perceived as ´closed´

and difficult for outsiders to become part of.

Does this obstruct foreign investment?

When I came to Korea in 1994 the gap was indeed

quite big and it took me some time to adjust and

find my way in the Korean culture. However,

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Vol.14 • No. 11 • November 2004


INTERVIEW

traditions change and Korea is gradually opening

up. Where in the past people were not willing to

adjust to foreigners, nowadays people are willing

to adjust themselves and move your way. The

younger generation also speaks much better

English.

The European Chamber has been stressing that

a favourable living environment for expatriates

is vital for foreign investment. The Korean

government understands this and launched a

few good programmes, including establishing

international schools, medical care for foreigners,

etc. Some regions or cities give special incentives

for employees of certain industries. For instance

Busan, the big container hub in the East, targets

and facilitates logistics companies.

Talking about a hub, what is your view of Korea’s

ambition of becoming the Northeast Asian hub?

Korea can be a hub, provided they execute all

the ambitious plans they have presented in the

past. A few years ago, drastic reforms were

announced that would restructure certain

industries and facilitate the hub concept.

However, a lot of these reforms have been

obstructed and were never executed. In a way

this has contributed to the fact that foreign

investment in Korea is not at the level it should

be to become a business hub of Northeast Asia.

In addition, it is important for South Korea to

focus. At the moment Korea wants to be a hub

for just about everything. This will never happen.

In my view, South Korea can succeed in being a

hub by focusing on logistics, IT services, R&D and

automotive industry.

What is the EUCCK´s position towards North

Korea?

The EUCCK regards the Korean peninsula as a

single entity when it comes to generating business.

We have had a number of delegations visiting

North Korea and recently opened a corresponding

office in Pyeongyang. Marked changes have

occurred in the political climate on the peninsula

over the last 10 years as evidenced by the Sunshine

Policy of former president Kim Dae-Jung toward

the North and its continuance by current president

Roh Moo-Hyun. Accordingly, there has been an

increase in interest on the part of EU companies

in getting information on the North Korean

market. Also more and more European countries

open embassies in Pyeongyang. Currently, many

of the 25 EU member states have diplomatic

relations with North Korea.

How attractive is North Korea for foreign

investors and will it open up for foreign entry?

North Korea is now at a cross road where it can

Frans Hampsink meeting President Roh Moo-Hyun at the Blue House

choose to open up to the foreign market or where

it will become completely isolated. In my opinion

the North Korean government will choose for the

first option. Therefore, I feel that the concern

that is often expressed in Europe over the North

Korean issue is not appropriate.

If, or rather when North Korea will open up,

this will give an enormous boost to the South

Korean economy. It will provide an even better

access to the Chinese market, which I regard more

as an opportunity than a threat to the South

Korean economy. South Korea has great know-how

and quality products that give it a huge advantage

towards the Chinese market.

Recently South Korea has been in the news with

the impeachment procedure against president

Roh and the Constitutional Court ruling that

scuttled Roh’s ambitious plan to relocate the

country’s capital out of Seoul. This doesn’t

appear to be a nice and stable environment for

foreign investment.

Indeed, the negative publicity created by

South Korea itself does not help its economic

development. President Roh experiences a lot

of opposition, obstructing him to implement his

ambitious reforms. However, I think a process has

been started that is irreversible. The previous 10

years have shown a process of democratisation

that will continue to accelerate. The younger

generation has a new refreshing vision on the

future of Korea that will awaken the full

potential that Korea – both North and South –

has to offer.

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Vol.14 • No. 11 • November 2004


ASIAN FOOD

Orchard Road Car Park Hawker

By Mariken Berns

Popularly known then as “Gluttons Square”, the car park was well

known for the street hawkers who used to gather there and the great

variety of good local food. However, by 1979 all stalls ceased operations

there, under the Government’s policy to re-site hawkers into hawker

centres for health and environmental reasons.

This vibrant and nostalgic scene was brought back during the month

of July last year by the Singapore Tourism Board and in response to

positive feed back, the operation is extended till 28 February 2005.

The stalls offer some of the distinctive and tasty

Singaporean dishes, so that locals and visitors

alike can enjoy Singapore’s must-try dishes in

an authentic and truly unique way. But what is

Singapore food? Briefly, it has its origin in Malaysia,

Indonesia, China and India. Many claim that there

is no such thing as Singapore food for that reason.

They are only partially right. You’ll still find the

most authentic and tastiest of each of the cuisines.

What has been happening to the various cuisines

since their first arrival a century or so ago is what

we now proudly call Singapore Food.

Fatman Satay - Started along Beach

Road just outside the Alhambra

Theatre in the 1940s and was

later relocated to the now

defunct Satay Club by the

Esplanade some 20 years ago.

They now have stalls in the Old

Airport Road food centre and at

the Lau Pa Sat satay club. While

traditional satay uses cut meat, the

folks here popularized the use of minced

meat. It is much softer to the bite and takes the

marinade (turmeric, lemon grass and ginger) more

evenly. Their peanut sauce is smooth with a fine

peanut texture

Casuarina Curry - Casuarina is a top Indian

street food restaurant in Singapore. They serve a

south Indian classic staple pancake from Chennai.

Simple flavoured dough is flipped, stretched and

folded into shape to contain air traps before pan

frying. The resultant crispy on the outside and

lightly soft on the inside, roti prata, is best eaten

with a fish or meat curry dip or dhal.

Bak Kut Teh - Literally, Bak Kut Teh refers to

Pork Ribs Tea. Tender pieces of pork back ribs are

boiled, flavoured and served in a clear soupy

stock of garlic and pepper with a dash of spices

like cloves, coriander roots and red dates. This

combination of spices is believed to boost immunity

and improve health. Accompanied by a bowl of

white rice and chilli dip, it is customary to wash

this meal down with cups of Chinese tea.

Oyster Omelette -‘Or Luak’ a South China

street staple that became an icon here. Sweet

potato flour and stock mixture is fried with eggs

till it’s both crispy yet soft. Then fresh

oysters, which are lightly coated with

that same sweet potato flour and

stock batter, are quickly rolled

over the hot wok and served as

a topping with a sprinkling of

coriander and spring onions. It

often comes with a tangy chilli

sauce to balance the heaviness

of the dish.

Fried Kway Teow & Fried Hokkien Prawn

Noodles - Fried Kway Teow is cholesterol on a

platter or noodles and rice pasta wok tossed in a

symphony of chopped garlic, stock and black sweet

soy sauce, textured with bean sprouts, chye sim

(mustard green) and prawns. It is served with a

fresh topping of shellfish sashimi. Legend says that

the Hokkien noodles emerged from the old Chinese

Fujian sailors here (who traditionally eat noodles

as a staple food) moonlighted as hawkers by frying

the excess factory noodles that were not sold by

day’s end along Rochor Road. As it was close to

the seaside markets, fresh seafood was readily

10

Vol.14 • No. 11 • November 2004


ASIAN FOOD

available as a natural ingredient. A

Fried Hokkien Noodle craft of sorts

evolved.

Bak Chor Mee - Bak Chor is minced

meat in Hokkien. Bak Chor Mee are

wheat noodles cooked slightly al-dente

and swathed in specially cooked chilli paste,

flavoured oils, a dash of soy sauce, black vinegar

and topped with minced/sliced meat, fish cakes,

lettuce or fish balls. The soup version has these

ingredients all sitting in a pork broth.

Carrot Cake (Chye Tow Kueh) - This ‘cake’ is

made by steaming a doughy mix of flour, stock and

grated radish. The soft cake is then cut into pieces

and fried with eggs, chopped pickled radish and

garlic. The blackened and slightly sweet savoury

version has black sweet soy sauce fried in for extra

taste. Rumour has it that local gangsters do not

consume it as white radish slows down the body’s

healing process, and being gangsters, there’s

plenty of need for quick healing.

Chicken Rice & Teochew Fish Porridge -The

Singapore Hainanese Chicken rice is not originally

found in Hainan, China. The uniqueness lies in that

the grains are firstly fried in flavoured oils and

garlic before boiling in chicken stock. The chilli

sauce must have a spicy and zingy tang

to it and the fowl must be stock boiled

for flavour and immediately ice

dunked for texture. This technique

firms the skin, locks the juices and oils

and keeps the flesh moist and soft.

Porridge is steamed rice simmered in a clear

and light fish broth. Fresh mackerel fish slices top

the porridge with leaves of lettuce. Usually a

sprinkling of dried seaweed, fried shallots, spring

onions and coriander is added for a lift to this

South China Teochew classic.

BBQ Seafood - Take fresh seafood, grill it or

hot pan sear it with a secret recipe chilli sambal

chutney or sauce.

Nasi Lemak – Nasi means rice in Malay and

lemak means rich. The rice is boiled in light coconut

milk, wrapped in a banana leaf and flavoured with

a tinge of pandan leaves and stock. Add a stinging

chilli sambal or chutney and top it with your

favourites like fried chicken wing, fried fish, eggs,

cucumber and/or fried anchovies and peanuts

etc, it becomes a national culinary staple, eaten

around the clock everyday.

More info about Singapore food, ingredients and

recipes can be found on: www.makantime.com

11

Vol.14 • No. 11 • November 2004


DUTCH NEWS

2004, Dutch Media/Newspapers

Netherlands ranked 10th least

corrupt country

The Netherlands was ranked 10th in the list of the least corrupted countries in

2004, according to the Corruption Perceptions Index (CPI) 2003 of anti-corruption

organisation Transparency International (TI).

The annual CPI reflects perceived levels of corruption among politicians and

public officials in 146 countries. TI has included 13 new countries in its 2004

index. Until 2003 the CPI list consisted of 133 countries. CPI was first launched

in 1995.

The Netherlands scores 8.7 out of a clean score of 10 in 2004. The Netherlands

occupied the 10th position in the 2002 CPI. In 2003 the country occupied the

seventh position with a score of 8.9.

Finland, with a score of 9.7, is the least corrupted country in the world for

the fifth consecutive year in 2004.

Bangladesh, with a score of 1.5, is the most corrupted country in 2004,

unchanged from 2002. In 2004 however, it shares this position with Haiti.

In the top 10 of the least corrupted countries in 2004 are New Zealand,

Denmark, Iceland, Singapore, Sweden, Switzerland, Norway and Australia.

A total 106 out of 146 countries score less than 5.0 against a clean score of 10

in 2004. Sixty countries score less than 3.0 out of 10, indicating rampant corruption.

Corruption is perceived to be most acute in Bangladesh, Haiti, Nigeria, Chad,

Myanmar, Azerbaijan and Paraguay, all of which have a score of less than 2.0.

Netherlands loses

sexual, reproductive

health leading position

1994-2003

The Netherlands has lost its international

leading position in terms of sexual and

reproductive health since 1994, the Dutch

national centre for sexual and reproductive

health Rutgers Nisso Groep reported

The number of Dutch infected with

sexually transmitted diseases such as

gonorrhoea and chlamydia has doubled and

the number of syphillis patients has increased

four-fold since 1994. A total 747 Dutch were

registered as HIV positive in 2003.

The number of abortions performed to

women living in the Netherlands increased

to 30,000 from 20,000 in 1994. The abortion

rate was especially high among teenagers

and immigrant women.

In the meantime, the Dutch government

has passed laws, which give more rights to

homosexuals and prostitutes.

The average number of sexual

intercourses reported by Dutch has

decreased to 103 times a year, according

to the results of the condom maker Durex

Global Sex Survey 2004.

Northern provinces

protest inclusion of

Wadden shallows in

world heritage list

Representatives of the Noord-Holland,

Friesland en Groningen provinces protested

against the proposition of the Agriculture

Minister Cees Veerman to include the

Wadden shallows in the world heritage list

because it will drive away the potential

investors in the region, the director of the

Friesland Chamber of Commerce said.

Currently, the Wadden shallows islands

and the coast strip provide some 40,000 jobs.

Prevously, Veerman has asked for the

opinion of all concerned parties. The

municipalities, in which the Wadden

shallows are located will also give their

opinion on the issue by the end of 2004.

The final decision on the Wadden shallows

nomination for the world heritage list is

expected in one year, when the minister

will hold a special conference. Germany

and Denmark will also take part in the

conference. The Danish government

expressed a negative opinion on the issue

in 2001 and opinions in Germany are quite

varied.

Employers prefer east

European immigrants

to non-European

Dutch employers prefer to hire native

Dutch or east European employees than

immigrants of non-European origin, the

half-year survey of Dutch market research

company Motivaction showed.

Three fourths of the surveyed managers

said that non-European immigrants were

not motivated employees. Some 26 pct of

the managers said that east Europeans

were more motivated. According to the

survey, half of the Dutch managers of

companies, employing between 20 and

500 people, have a poor opinion of non-

European employees and especially of

young Turks and Moroccans. Some 38 pct

of the managers said they needed to know

better the background of non-European

immigrants and 16 pct were interested

in information about consumers of non-

European origin.

The trend shows that few non-European

immigrants will fill the vacancies, which

will open due to the ageing of the Dutch

population in the coming years. Currently,

1.6 million immigrants of non-western

origin live in the Netherlands.

Dutch companies

lose 1.5 bln euro

annually due to

stress leave

Companies lose 6.0 mln euro per day

and 1.5 bln euro per year due to

stress-related sick leave, a research

by Dutch magazine for personnel

managers PW showed.

A total 357 personnel managers

and 140 company doctors took part

in the research. The personnel

managers attribute a total 12 pct of

the sick leave cases to stress, while

the company doctors blame stress

in well over 35 pct of the cases.

The employees of 95 pct of Dutch

companies suffer from stress, caused

mostly by working pressure and bad

planning. One out of three companies

take measures against the stress

leave.

12

Vol.14 • No. 11 • November 2004


DUTCH NEWS

2004, Dutch Media/Newspapers

Number of female

managers in

Netherlands increases

The number of female managers in the

Netherlands has been continuously

increasing in the last few years, the

Dutch Central Bureau of Statistics (CBS)

said.

A total 14 pct of the managers in

the Netherlands were female in 1995.

This percentage increased to 25 pct in

2002.

Most of the managers in the

healthcare sector are women. A relatively

big number of high-skilled women are

working also in education, CBS added.

The total number of female

managers in the country stood at 44,000

in 2002, CBS said. They are mainly

working in the non-commercial services

sector. A total 36 pct of the managers

in this sector were women in 2002

while this percentage was 13 pct in the

corporate sphere.

Website provides

anonymous help to

alcoholics

Dutch organisation providing help to

addicted Tactus will launch a website

providing anonymous help to alcohol

addicted Dutch.

The website www.alcoholdebaas.nl

will give advice to alcohol addicted people

on how to decrease alcohol consumption

or quit drinking. Tactus relies especially on

the anonymity of the process, as people

are expected to be more open.

Tactus currently is able to access only

10 pct of the people with drinking

problems, but aims to increase their

percentage by means of the new website.

The website is also expected to reach

people at an earlier stage of the drinking

problem, compared to the actual situation,

when people ask for help after an average

of seven years of drinking.

Nearly 1,800 Dutch died due to alcoholrelated

diseases in 2002. Some 27,000

alcohol addicts were registered in the

Netherlands in 2003. A total 1.1 million,

or 9.0 pct of the Dutch population aged

over 18 have drinking problems.

FNV warns for more protest actions

Trade union federation FNV’s chairman Lodewijk de Waal has warned for more protest

actions against the savings policy of the Dutch Government in the near future.

FNV, Netherlands’ largest trade union with 1.2 million members, organised a

demonstration against the government’s plans in Amsterdam on October 2, 2004. According

to De Waal, this demonstration was expected to be the biggest one in the last 10 years.

De Waal expected 100,000 protesters to take part. FNV, the trade union CNV and leftist

politicians have formed a coalition against the social plans of the government. The protests

are mainly against the abolishment of the pre-pension regulations and the social policy of

the government. De Waal expects also work stoppages and long-term strikes in the public

and transport sectors, as well as in strategic regions, such as the port of Rotterdam.

According to entrepreneurs, the 24-hour work stoppage at Rotterdam’s port a week ago,

cost dozens of millions of euro.

Pim Fortuyn murder most important

event in postwar history

A total 46 pct of the Dutch consider the murder of right-wing politician Pim

Fortuyn in 2002 as the most important event in the country’s postwar history,

a poll by historical magazine Historisch Nieuwsblad (HN) showed.

The economic crisis from the early 1980s and the discovery of natural gas

reserves in Slochteren, northern Netherlands, in 1958 were considered by 17

pct of the polled as the most important event. Some 4.0 pct ranked the loss

of former Dutch India in 1949 as the most significant event in postwar history.

According to the poll, 79 pct of the respondents consider the Dutch a

down-to-earth people, 48 pct thrifty, 48 pct easy-going, 40 pct entrepreneurial

and 36 pct tolerant.

A total 638 respondents took part in the poll, which HN carried out on

the occasion of the week of history, organised by HN and the Anno.

Careless employees

cause damages in

corporate sector

The damages in the Dutch corporate

sector, caused by careless employees, are

continuously increasing, insurance company

Interpolis said.

More than 50 pct of the damages in

the corporate sector could be prevented

if employees were more careful on their

workplace. The avoidable mistakes vary

from fires, caused by welding work, to overturn

or damage of tools due to clumsiness.

According to Interpolis director A.

Wiechmann, the mistakes on the workplace

are mainly a result of the increased time

pressure for the employees.

Groningen to reduce

workforce by 10 pct

Dutch northern municipality of Groningen

will reduce its workforce by 10 pct,

according to the Groningen municipal budget.

According to the budget, the municipality

must take severe cost saving measures

within its own organisation, including 350

job cuts, in the next several years.

The Groningen municipality has already

sent a letter to its employees, informing

them about the job cuts. At the same time,

a new employee from Shell will start in

Assen in December. Mr. Olaf Botermans

will increase the workforce of the Assen

municipality significantly with his knowledge

of ancient hunnebedden.

13

Vol.14 • No. 11 • November 2004


EDUCATION & SINGAPORE

A Singapore Adventure

By Joost de Kruijff

Setting up a business in The

Netherlands is one thing, doing

business in an unknown culture is

something completely different. I

soon realized that communication

between people is a skill that had

to be learned the hard way.

In September I arrived

in Singapore as a

trainee. My adventure

started with a simple

e-mail asking for a

special “stage” (trainee)

opportunity within

a small business in

Singapore, preferable a start-up company. The

reason for this unusual request is that I managed

to obtain the certificate of “International

Entrepreneurial License” before I started the HEAO

“Small Business and Retail Management” in Breda.

I was very lucky because Hollandia Home

Services Pte. Ltd., an one-stop-shop home services

company founded only one year ago in Singapore

by three Dutch managers, could use somebody

on the ground, so to speak,

for business development

and delivery.

My school, the Avans

Hogeschool, was exited

about the kind of work

Hollandia Home Services

Pte Ltd could offer. The

company gives me the

opportunity to practice the

tactical and operational

aspects of business. Dealing

in home services improved

my communicational and

negotiations skills significantly.

Setting up a business in The Netherlands is

one thing, doing business in an unknown culture is

something completely different. I soon realized

that communication between people is a skill that

had to be learned the hard way. One of our service

providers spoke only one language, which I was

not able to speak, at least that is what I thought.

How wrong was I when it became clear that my

“trainee coordinator” could communicate with him

without problems, of course in English!!

For companies it can be very difficult to

find the right trainee at the right position in the

company. This problem is increased by the fact

that students have difficulties with giving a clear

overview of themselves and their main strengths.

In general many students classify themselves as

‘team player’ and ‘employee of the year’, hoping

the companies want them because of these

capabilities. I think not these competences are

the most important assets, far more important

are perseverance, creativity and a basic drive for

responsibility. These features combined with some

professional experiences could succeed a trip in a

foreign country. I am quite very sure students will

drop out if they miss one of these competences.

The unprejudiced view at doing business by

inexperienced people (like students), could

probably open doors in some business cases. When

these people also are supported by a coordinator

who really wants to share his knowledge and

experiences, the benefits for the company can

be bigger than expected. Fortunately, I have this

privilege at Hollandia Home Services Pte Ltd and

I hope I can give the company the same process

as I am in at the moment.

A vital issue in the preparation of a traineeship

for a company is to apply for a Training pass (TVP).

This must be done at least one month before the

start of the training program. The student and

company need to fill in one combined application

form that needs to be accompanied by the proposed

training program and a letter from the University/

College to confirm (amongst others) the training

is part of the course requirement. This application

needs to be submitted to the Ministry of Manpower

of Singapore (MOM) and the costs are S$40 dollars

only.

During my traineeship I have to develop a sales

strategy for certain market segments. Once I have

done that I also have to implement this strategy

and measure what the results are. After evaluation

of the strategy I will have time to improve it and

re-implement if required. Unique from a business

point of view is the fact that I really have a direct

result from what I have developed myself.

For me Singapore is a unique country and

totally different from The Netherlands, but also

totally different from the reputation it has in

The Netherlands. There is much more to see and

to do then what the perception “back home” is.

And the food is something else; I cannot imagine

to have this kind of quality for S$3-5 in Breda.

On behalf of many more trainees to come

to Singapore, I do thank organizations for the

opportunity provided; it can be seen as a mutual

beneficial experience.

Regards Joost de Kruijff

Business Development

H/P 98286274

www.hollandiahomeservices.com

14

Vol.14 • No. 11 • November 2004


BOOK REVIEW

Bill Bryson - A Short History of

Nearly Everything by Dorien Knaap

Bill Bryson has made a career writing

hilarious travelogues. His latest book is

more of the same, except that this time

Bryson hikes through the world of

science. In A Short History of Nearly

Everything, he sets outs to put his stamp

on all things under the sun. As he states

at the outset, this is a book about life,

the universe and everything, from the

Big Bang to the ascendancy of Homo

Sapiens. “This is a book about how

it happened,” the author writes. “In

particular how we went from there

being nothing at all to there being

something, and then how a little of

that something turned into us, and also

what happened in between and since.”

Bryson’s interest is not simply to discover

what we know but to find out how we know it.

How do we know what is in the centre of the earth,

thousands of miles beneath the surface? How can

we know the extent and the composition of the

universe, or what a black hole is? How can we know

where the continents were 600 million years ago?

How did anyone ever figure these things out?

This resulted in a brick of a volume (a daunting

500-plus pages) in which Bryson takes on, well,

everything. From the components of the atom to

the size of the universe to the age of the Earth,

Bryson describes the history behind scientific

discovery. He relies on some of the best material

in the history of science to have come out in recent

years. He uses hundreds of sources, from popular

science books to interviews with luminaries in

various fields. His challenge is to take subjects like

geology, chemistry, palaeontology, astronomy, and

particle physics and see if there isn’t some way

to render them comprehensible to people, like

himself, made bored (or scared) stiff of science

by school.

To this end, Bryson apprenticed

himself to a host of the world’s most

profound scientific minds, living and

dead. On his travels through space

and time, Bill Bryson encounters

a splendid gallery of the most

fascinating, eccentric, competitive,

and foolish personalities ever to ask

a hard question. In their company, he

undertakes a sometimes profound, sometimes

funny, and always supremely clear and entertaining

adventure in the realms of human knowledge.

It is amazing how much we know and how we

found it out. It is astounding, however, how much

we have yet to learn. Sometimes mystified, often

admiring, Bryson regales readers with the follies

and feats in science. Bryson’s essential selling point

is making science less intimidating, as he explores

an atom; a cell; light; the age and fate of the

earth; the origin of human beings. The layout of

the book is historical and Bryson’s prose is heavy

on humanising anecdotes about the pioneers of

physics, chemistry, geology, biology, evolution and

palaeontology, or cosmology.

Though it covers the same material as every

science book before it, it reads something like a

particularly detailed novel (albeit without a plot).

To read Bryson is to travel with a memoirist gifted

with wry observation and keen insight that shed

new light on things we mistake for commonplace.

To accompany the author as he travels with the

likes of Charles Darwin on the Beagle, Albert

Einstein or Isaac Newton is a trip worth

taking.

About the Author:

Bill Bryson’s books include A Walk in the

Woods, I’m a Stranger Here Myself, In A

Sunburned Country, Bryson’s Dictionary of

Troublesome Words, Bill Bryson’s African

Diary. He lives in Norfolk, England.

Bryson’s

essential selling

point is making

science less

intimidating,

as he explores an

atom; a cell; light;

the age and fate

of the earth; the

origin of human

beings. The layout

of the book is

historical and

Bryson’s prose

is heavy on

humanising

anecdotes about

the pioneers of

physics,

chemistry,

geology, biology,

evolution and

palaeontology, or

cosmology.

Sources: Reed Business Information Inc., Amazon and Booklist

15

Vol.14 • No. 11 • November 2004


SPORTS

Wooden Shoe

Hockey Tournament 2004

The men’s B-team

His

Excellency

Ambassador

van Pech

salutes to a

successful

tournament

On the 16th of October, the hockey section of the Hollandse Club

organized the 13 th edition of the Akzo Nobel Wooden Shoe Hockey

Tournament, a friendly family sporting event, combined with good

food, live music, and a swinging party.

This one-day sport event has been held on the

grounds of the Ceylon Sports Club. The tournament

aims to promote multi-cultural integration among

the various communities in Singapore. Among the

16 participating teams the Hollandse Club was well

represented by 1 ladies team and 2 men’s

teams. This year’s tournament was

won by the Singapore Recreation

Club in the men’s competition

and by the Singapore Police

Force in the women’s

competition.

We would like to use this

The NUS team is stretching before the game

opportunity to highlight the

contribution of the many

companies present in Singapore and especially the Dutch

business society. A special thanks goes to our Event Sponsor

Akzo Nobel, to our Gold Sponsor Philips, to our Silver Sponsors

Heineken, ING, KLM Cargo, Oiltanking, to our Bronze Sponsors,

TNT, Fortis, Bluewater and Stephenson Harwood who trough

their loyal support and generous contributions have made this

year’s tournament a successful event.

Akzo Nobel Wooden Shoe Committee 2004

16

Vol.14 • No. 11 • November 2004


BIZZ AGENDA

Singapore Motorshow 2004

AUTOMOBILES/AUTOMOTIVE ENGINEERING

305 Suntec Singapore

11-21 November 2004

Start Time: (First Day)1130 - 2200 hrs (Weekdays)

(Other Days)- 1030 - 2200 hrs (Weekends)

(Last Day) - 1030 - 2100 hrs

7th International Exhibition of Automobile, Motorcycles,

Accessories and Services.

http://www.motorshow.com.sg


ENCE

SUCCESSFUL CUSTOMER SERVICE PRACTICES

Swissötel Merchant Court

23-24 November 2004

Gaining the Knack for Customer Service to Increase Profit

and Market Share.

Key Issues to be covered:

• Excellent Service Management Strategy

• Winning Approaches in Service Recovery

• How to Create the Service Drive within Employees

• Transforming Call Centres into Profit Centres

• Delivering Maximal Satisfaction through E-Service Delivery

• ROI Measurement in Customer Service

www.conferences.com.sg


Family Festival 2004

OTHERS

Suntec Singapore

26-28 November 2004

Start Time: 10:00

Presenting the largest ever consumer event in Singapore,

Family Festival promises to bring together a gamut of exciting

events and activities all under one roof! Family Festival will

have something for everyone with a wide range of activities

for the whole family including leisure, lifestyle and recreation.

The exhibit profile includes:

• HomeMakers

• Family Entertainment

• Just for Kids

• Woman’s Favourite

• Family Heath

HomeMakers 2004 (An attraction within

Family Festival 2004)

INTERIOR DESIGN-COMMERCIAL/DOMESTIC

Suntec Singapore

29 November 2004 - 5 December 2004

Start Time: 12:00

Singapore’s longest running home show – a household name

synonymous with quality home furnishings, furniture, interior

design and electrical appliances that has generated an average

of S$5 million worth of sales at past events.

http://www.familyfestifal.com.sg


OSEA2004

OIL/GAS

Suntec Singapore

7-10 December 2004

The 15th International Oil & Gas Industry Exhibition &

Conference

Since 1976

Incorporating:

- RLPAsia2004

The 7th International Refining, LNG & Petrochemical

Technology Exhibiton & Conference

http://www.osea-asia.com


Women’s Affair

RETAIL

Suntec City Exhibition Hall 401

15-19 December 2004

Start Time: 12:00-22:00

An event where all women of today find their needs and wants

all under one roof with irresistible bargains. There will be a

whole myriad of products and services ranging from manicure,

beauty services, health products to fashion. With exciting daily

shows, contests and lucky draws, you’ll not wait another year

to witness this event.

www.motherhood.com.sg

http://www.familyfestival.com.sg

17

Vol.14 • No. 11 • November 2004


KNOW YOUR TAX

In previous articles, we discussed the

‘at arm’s length’ principle (most

recently, with respect to Dutch

financing and licensing companies).

Questions which came up after the

article gave reason to belief that some

readers might be interested in a further

clarification of the fundamentals of this

principle and the approach taken in

practice by multinational companies and

tax authorities.

Most of you will recall from economics

class that the market determines the price

(value) of the supply of goods and services

etc. The market price will be the price at

which supply meets demand, provided

suppliers seek the highest price and

consumers seek the lowest price.

Transfer pricing

Loyens & Loeff, Singapore

Pieter de Ridder and Olaf Botermans

Tel: +65 6532 3070

In the situation that the supplier and the

consumer belong to the same group of

companies, the impulse to seek the highest

respectively lowest price may no longer

apply. After all, from a group perspective,

there is no profit to be reported.

Furthermore, if these group companies are

located in different countries, suddenly

another factor emerges which affects the

price setting; the domestic tax rates in the

respective countries may vary significantly.

For instance, Japan has a high tax rate

(approx. 40%), while Hong Kong has a low

tax rate (17.5%). If a group company in

Japan acquires goods / services from a group

company in Hong Kong at a price above

market price, the costs may be deducted

against Japan’s higher tax rate, while the

profits will be taxed at the lower HK rate.

Where the correct price for the supply

of goods and services is relatively easy to

determine, the price setting for the use of

intellectual property (royalties) and debt

financing (interest) is not always that

easy to determine. Taking into account that

these types of income / expenses provide

multinationals with flexible means of

introducing tax deductible expenses.

By tinkering with the prices charged

between group companies, a multinational

would be able to shift profits from high

tax jurisdictions to low tax jurisdictions.

Please note that the at arm’s length

principle is not limited to the supply of

goods and services. It also applies to

royalties (remuneration for intellectual

property (brand names etc.) and interest

(remuneration for debt financing).

The ‘at arm’s length principle’ aims at

avoiding the shifting of profits from high

tax to low tax countries. On the basis of this

principle, group companies should always

apply terms and conditions which would

have been applied if they would not have

belonged to the same group. In other words,

these group companies should operate as

if both seek to maximise their profits.

This principle is obviously easier

described in theory than applied in

practice. How to go about determining the

appropriate transfer prices? One solution

is to look at what non-related companies

in a similar position would actually charge.

If HK company would for instance also

supply goods or services

to other, non related

customers, the price

charged to them should

also apply in related

parties’ transactions.

However, the difficulty

with this (Comparable

Uncontrolled Price)

method is that hardly any transaction is

ever the same. For instance, what if

HK Company provides warranties to

its non-related customers, but does

not extend this warranty to Japan

Company? Or, to what extent can

brand A be compared to brand B?

In general terms, a transfer

pricing study should take the

following into account.

1. Industry analysis; understanding

the general business.

2. Functional analysis; what is

the function of the company

supplying the goods / services, what are

the risks involved, responsibilities,

assets employed etc.

3. Typical profitability; what is, given

the foregoing, the typical profitability

for such company.

The profitability is typically applied

by means of a cost plus method (the

remuneration comprises the costs incurred

and a profit margin) for companies

rendering services to related companies. A

resale minus method is typically applied in

those situations where purchases are made

from related companies (purchase price is

set at the sales price to third parties minus

a profit margin).

The US tax authorities were among

the first to recognise the practical aspects

of transfer pricing (i.e. determining the

appropriate at arm’s length pricing).

Section 482 US regs. provides the

fundamentals for the determination of

the appropriate transfer prices. The

Organisation for Economic Co-operation and

Development (OECD) borrowed heavily

from these US regulations when drafting its

report on transfer pricing.

In Asia, a focus on transfer pricing is a

relatively recent phenomenon. Malaysia,

Korea, India, and Thailand have published

transfer pricing regulations over the past

few years. These regulations are all more

or less based on the OECD transfer pricing

guidelines. As is often the case with transfer

pricing matters, the implementation and

the practical approach taken by the tax

authorities is the most relevant aspect for

taxpayers in the region. Due to the newness

of these regulations, the local tax

authorities are not that familiar yet with

the concept of transfer pricing. In Thailand,

for instance, the tax authorities are trying

to build up a database (other taxpayers) to

support any claim that a price adjustment

would be justified. It is not yet known, but

seems unlikely, as to whether the tax payer

would also be given access to such database

to support its case. In such event, it would

be an uphill battle for the taxpayer to

justify the prices charged.

In some Asian countries,

the authorities have opened up the

possibility to discuss the price setting

in advance. By means of a ruling,

the taxpayer and the tax authorities

will determine in advance what price

setting should apply to a specific

transaction.

In some Asian countries, the authorities

have opened up the possibility to discuss

the price setting in advance. By means

of a ruling, the taxpayer and the tax

authorities will determine in advance what

price setting should apply to a specific

transaction.

However, such certainty in advance may

not always be available for a number of

reasons. For those situations, companies in

Asia transacting with group companies

should maintain sufficient documentation

justifying the prices charged. A study

providing the underlying basis for the

price setting should at least assist in any

discussion which might arise. It would then

be up to the tax authorities to challenge

these price setting assumptions.

The above is to provide you with a

general idea of the tax developments in

South East Asia. Please contact our office

in case you have any further queries.

18

Vol.14 • No. 11 • November 2004


POP & DROP A QUESTION

The Importance of Having Nine Lives,

And Not Being a Seagull

Question to Jos Birken

Singapore wants to stimulate

entrepreneurship, to further strengthen

Singapore’s economy. Our previous

writer Nick van Holstein would like to

ask Dutch entrepreneur, Jos Birken who

runs his own company from Singapore,

how it is to have your own business here

in Asia, and how it compares to doing

business in Europe/NL.

Answer

In fact these are not two, but three questions:

about setting up your own business, about doing

business, and about comparing the latter to doing

it in Europe.

Let’s start with setting up. I still remember how

easy this was compared to Holland. I already had

experience incorporating back home, and it used

to be one of my main frustrations. You have to

pass your Articles of Incorporation before a notary

– or rather, a notaris, which is worse, and more

expensive too. Notarissen in Holland form a

brotherhood – I’m not making this up – and it shows.

Not only do Dutch notaries charge hideous amounts

of money, they also cost time, although in that

respect they’re saints compared to the Ministry of

Justice, which needs to issue a Verklaring van

geen bezwaar. Foam still forms at the corner of

my mouth when I’m reminded of that one. It’s a

statement that says the Dutch Government doesn’t

object to the company, nor to you being a Director

of it. It’s supposedly to prevent criminals setting

up money laundering operations or the like, but I

can’t imagine it has ever prevented one from being

set up. Theoretically your application should spend

exactly 15 minutes on some guy’s desk in the

Ministry but experience says he’ll leave it sitting

there for anywhere between six and fourteen

32-hour work weeks.

So you can imagine my pleasant surprise when I

set up business in Singapore, and had it done within

of two days. That was 1999. Nowadays you do it

on the Internet and it costs you a couple of hours!

Doing business in Asia, on the other hand, could

not be further removed from setting up in

Singapore. At first it seemed easy going, as many

people were interested in what I was bringing to

the continent. But very soon, things started to slow

down to a crawl. Brain-picking is the national sport

in Asia, I found out, and you can grow old being

subjected to it.

However, after a while a nice thing started

to happen: people realized I was still there. This

is an important moment in the career of a newly

arrived entrepreneur in Asia. Because one of the

most important things of doing business in Asia is

not being perceived as a seagull: a bird that flies

in screaming loudly, shits all over the place, and is

gone again before you know it.

We Dutch like to think of ourselves as patient

business people. We think we’re so good at it that

we even have a saying for it: ‘staring the cat out

of the tree’. But Chinese, Koreans, Japanese, all

have one thing in common: they stare at the cat

longer than we do. In fact, it needs all of its nine

lives to survive being stared at.

Once you’re accepted, though, things become

a lot like back in

Europe. There are many

parallels, such as doing

business across many

different cultures: it’s

always interesting,

and it keeps you on

your toes. But some

differences remain.

One of them is payment

procedures, which tend

to be lengthy and

complicated. Notable

exceptions are the Japanese, who in my experience

are the fastest bill payers on the planet. I wonder

if Nick, who works for a Japanese company, can

echo that.

New question to Johannes

Hartmann, Head of Market

Research, Unilever Bestfoods

“After all the research you’ve done into

cooking and eating habits across the whole

Asia-Pacific region, you must’ve reached some

conclusions, ‘what did you discover about

cooking and its meaning for women in different

Asian cultures? How is it different or similar

against Western views.

19

Vol.14 • No. 11 • November 2004


ASSOCIATION INFO

New Members

Cees van de Sande, Stahl Asia Pte Ltd,

Application Manager Permuthane Division

Koen Mouthaan, National University of

Singapore, Project Management Teaching

& Research

Ivo van der Linden, DSM

Gene Kwee, PricewaterhouseCoopers,

HR Services

Lim Tai Djoe, Rabobank International,

BusinessManager Asia, Supporting

new Head of Asia

Femke Tewari

Gerard Aben, Oce Singapore, Manager

International Procurement Office

Leaving Members

Joan Schutte, Sara Lee Asia Pacific

The Board cordially invites you to a company visit to

PSA

PSA is a global leader in the ports and terminals business with

investments in 17 port projects in 11 countries - Singapore, Belgium,

Brunei, China, India, Italy, Japan, Netherlands, Portugal, South Korea

and Thailand. In 2003, PSA handled 28.7 m TEUs of containers at all

its ports around the world, including 18.1 million TEUs in Singapore.

PSA is headquartered in Singapore where its flagship Singapore

Terminals operates the world’s largest transhipment hub.

Date: Tuesday 9 November

Limited seats available! Register only by email on or before Friday

29 October, mentioning Name-Company-Designation-Passport No-

Date Of Birth. Cancellation is possible till Wednesday 3 November.

Jobseekers

We are two 4th year students at the University of Twente and we are looking for an

internship in Singapore. This internship would preferably be during a period of 4

months, in the period of February till August 2005. We both join the MSc course in

Industrial Engineering & Management at the Faculty of Technology & Management.

Daan has the specialisation Logistics and Marion has the specialisation Financial

Engineering.

We prefer an internship in a production company or in a logistics company.

At the university of Twente it’s very common to do an internship assignment

with two students because it can deliver great value for a company to look at a

problem from two different viewpoints. Besides that, it seems very interesting to

us to do an assignment together and get familiar with a foreign work culture. Off

course we don’t want to rule out the possibility of doing two assignments, one in

Logistics and one in Finance.

In our internship we would like to focus on a logistics problem with some

financial aspects in it. Some possibilities for an assignment could be:

• Setting up a purchasing management system

• Optimisation of order quantities

• Inventory planning and control

• Calculation of expenses

• Return on investment calculations for new asset attractions

• Optimisation of maintenance of machinery

• Improvement of distribution processes

• Sequencing and routing for internal transport

• Inventory valuation

Besides our specialities we have knowledge in mathematics, operational

research, business administration, information technology and marketing. We both

work very precise and we can work very well together.

We can be contacted by e-mail (mariondaan@hotmail.com) or by phone at

+31 618806218.

Together with my partner I will travel to

Singapore and settle down for a period of

24 months. Although the employer of my

partner will use his effort and network

to supply me a job, I also do my best to

find a job myself, therefore I would

like to inform the Association of Dutch

Businessman as well.

I studied dutch law at the Univerity

of Utrecht and graduated last april. I

specialized in Labour law and social policy

and Economic public- and business law.

During my study I took the opportunity

to do a student internship at a law firm

and worked at the Citizen’s legal advice

bureau Utrecht. After my graduation I

joined the juridicial division at the

Teaching Hospital in Amsterdam.

In Singapore I am looking for a

reasonable job that brings me any

international work experience. I realize

and will accept that finding a job that

fits closely to my specialization will not

be easy. Anything close will make me feel

comfortable.

I am most willing to provide more

information about myself or about my

stay in Singapore. Please note that my

stay in Singapore will start in the first

week of January 2005. Femke Rethans

E-mail:femke@rethans.com Phone:+31

(6) 48564283.

20

Vol.14 • No. 11 • November 2004

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