Cains, an offshore commercial law firm incorporated in the Isle of Man, recently announced it would open an Asia-Pacific regional office in Singapore by mid-2008, to service existing clients and build a regional business on-the-ground. The move highlights the growing competition in the Asian offshore legal market.

In the past, Singapore has not been a popular option for offshore firms in Asia. They have instead favored Hong Kong, with five of the bigger offshore firms having offices in the SAR of China, and only Conyers Dill & Pearman boasting a Singapore presence. Both Harney's and Ogier chose to enter the Hong Kong market only last year.

Conyers has done well out of its position in Singapore since establishing a presence in 2001. The firm's office head Tan Woon Tiang gladly accepted ALB's Offshore Law Firm of the Year award in Singapore in 2007, its second year running, winning out over fellow nominees Appleby Global and Maples and Calder. This was thanks to its continued role in helping Chinese companies list on the Singapore Stock Exchange (SGX) - since the firm opened in 2001, it has listed over $1bn worth of businesses on the SGX. Much of the firms practice though consists of general corporate advice and funds work.

But the competition on the ground is set to increase. Cains, with experience in the fields of banking and financial services, capital markets, mutual funds and asset finance, has already been active in Asia, particularly in asset finance and capital markets transactions. While only advising on Isle of Man law, Cains has advised Asian companies and funds on flotations including on the main board of the Singapore Stock Exchange. Andrew Corlett, Cains' managing director, said Asia (and Singapore) is an evolutionary step. "Our work with clients in Asia, particularly in India, has seen the business case for us to have an on-the-ground presence gather strength and momentum."

Conyers Dill & Pearman Singapore office head Tan Woon Tiang said the firm had an office in Hong Kong for a number of years before opening in Singapore, but decided a Singapore presence would allow the firm to be more responsive to clients there. "It allows us to have a better understanding of local conditions and requirements," he said. As the jurisdiction competes with Hong Kong, the number of Singapore clients has also been on the up, meaning offshore firms are increasingly looking toward Singapore.

So does Conyers feel the competition is increasing?  "We know who our competitors are, and they frequently make trips to Singapore and are fairly well known here," he said. "But in sense, I think we have a slight advantage over them," he said. What about Cains? "We would consider everybody a competitor, big or small, but each of us have our different areas," Tan said. "For example, we are not advising on Isle of Man law, so we are not direct competitors (with Cains), but we compete on jurisdictions as well."

With China the main focus of activity in the region, Hong Kong will continue to be the favorite for offshore firms setting up in the region. However, for players looking for a niche, Singapore still holds untapped opportunity. Appleby reveals that of its fund clients, Singapore is second biggest source behind Hong Kong, and that fund clients are increasingly choosing to set up in Singapore due to cost and speed advantage.