Sir Stamford Raffles announced the establishment of Singapore as a British trade post, later to become a full-fledged colony, on Feb. 6, 1819. Singapore's location at the opening of one of the great ocean seaports in the world made, and continues to make, it one of the strategic islands in the world for trade and commerce.
In the early 1800's, the competition between England and Netherlands for trade partners and access to goods was intense. The Dutch were extremely influential and the East Indies area was the source of many highly desirable products. When Raffles was able to confirm that the Dutch had not established any kind of presence on the island, he completed a treaty with the local chiefs of the native governments in the area. The development of Singapore as an English port of trade was an enormously important step in creating the British trade empire of the 1800's.
There are 4 reasons why Raffles founded Singapore: The Dutch Monopoly, Failure of Penang and Bencoolen as trading ports, Strategic location and Natural Advantages.
The Dutch controlled most parts of the Malay Archipelago, with ports in the Straits of Melaka (Melaka) and the Sunda Straits (Batavia). The British ships passing by had to pay high taxes and fly a Dutch flag. The British were unhappy about this, thus they set about finding the third port: Singapore to break. Hence, Raffles came along and founded Singapore.
Also, the two British ports: Penang and Bencoolen, proved unsuitable. Penang was located too far up the Straits of Melaka and could not protect the British ships due to its position. Bencoolen whereas was located on the wrong side of the Island of Sumatra and experienced heavy monsoons at a certain time of the year. Hence, Raffles set about looking for the third port, located at the tip of the Malay Peninsular, Singapore. Hence, he founded Singapore.
Thirdly, Singapore was located strategically. At the tip of the Malay Peninsular, it had a commanding position as was located in the middle of the India-China trade route frequented by the British. This China trade was important as it garnered 23 million dollars worth of opium trade for the British. This was a huge sum at that time. Also, Singapore was located near the Spice Islands where high profits can be earned due to the demand for spices to preserve food as there weren't any refriegerators then. Therefore, they needed Singapore.
Lastly, Singapore had its own natural advantages. Not only did it have a deep harbour to dock big ships, it also had plenty of fresh and clean water for traders to use. Singapore was located in the tropics and had 12 hours of daylight and had a constant temperature and high rainfall, this made it suitable to grow crops, unlike the dry seasons of their home country where there might have been crop failure. Thus, Raffles came along and founded Singapore.
These 4 reasons are why Raffles founded Singapore.
Raffles set up a free port and made a town plan to make Singapore an orderly place to live in.