Singapore: Investing

FDI in Figures

Singapore has based its economic development on a proactive strategy of attracting FDI and trade openness. According to the World Bank, Singapore tops the ranking on Ease of Doing Business. Favorable lending to foreign investors, simple regulatory system, tax incentives, high-quality industrial real estate park, political stability and absence of corruption make Singapore an attractive destination for investment.

According to the UNCTAD, Singapore leads the list of the most attractive countries in the world, together with the United States, but the performance of its City is comparatively low in terms of receiving FDI. United States is by far the biggest investor, followed by Japan, Europe, China and India. Following the global recession, FDI flows decreased in 2009 and then more than doubled in 2010. They shrank in 2011 and might be affected by the unfavorable international situation in 2012.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	10,912	15,279	38,638
FDI Stock (million USD)	326,790	343,599	469,871
Performance Index*, Ranking on 141 Economies	50	18	-
Potential Index**, Ranking on 141 Economies	2	-	-
Number of Greenfield Investments***	295	309	-
FDI Inwards (in % of GFCF****)	20.8	27.1	-
FDI Stock (in % of GDP)	173.6	194.0	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2010, in %
The Netherlands	11.1
The United States	10.3
Japan	9.1
United Kingdom	8.8
Switzerland	4.2

Main Invested Sectors	2010, in %
Financial and Insurance Services	41.8
Manufacturing	21.8
Wholesale & Retail Trade	17.2
Transport and Storage	6.6
Professional & Technical, Administrative & Support Services	6.5
Real estate, rent and leasing	2.6

Source: Statistics Singapore - Last Available Data.

Form of Company Preferred By Foreign Investors: Private limited company is generally preferred because of its easier tax status and incentives.
Main Foreign Companies: There are more than 7000 foreign MNCs and around 10000 foreign SMEs from around the world which have set up base in Singapore. For more details, visit: International Enterprises Singapore .
Sources of Statistics: Statistics Singapore
International Entreprise Singapore

Why You Should Choose to Invest in Singapore

Strong Points: Singapore is the easiest country in which to do business, according to the Doing Business 2009 World Bank report. Singapore has excellent telecommunication, financial,and transport infrastructures, and its strategic location at the crossroads of maritime routes and proximity to the big markets is an advantage. The country offers tax concessions and easy loan conditions as part of investment incentives.
Weak Points: The lack of transparency in administrative incentives and the non-internationalization of the Singaporean dollar are investment hindrances. Despite being a free port, tariff protection for industrial firms is not provided. The dominant role of semi-public companies could hinder investments in some sectors.
Government Measures to Motivate or Restrict FDI: Singapore is open to foreign investment and offers tax incentives to companies after they register with Economic Development Board. However, the country continues to maintain monopolies in certain sectors (financial services, professional services, media and telecommunications). Government linked corporations play a dominant role in the domestic economy and to a large extent, on investment.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Singapore: Singapore has signed investment promotion and protection agreements with a wide range of countries. These agreements mutually protect nationals or companies of either country against war and non-commercial risks of expropriation and nationalization for an initial period of 15 years and continue thereafter unless otherwise terminated.
Visit: Singapore 's FTA Network
International Controversies Registered By UNCTAD: Singapore has no laws that force foreign investors to transfer ownership to local interests and as such no disputes are pending with UNCTAD.
Organizations Offering Their Assistance in Case of Disagreement: SIAC , The Singapore International Arbitration Center
SMC , Singapore Mediation Center
Member of the Multilateral Investment Guarantee Agency: Yes

Country Comparison For the Protection of Investors

	Singapore	East Asia & Pacific	الولايات المتحدة	Germany
Index of Transaction Transparency*	10.0	5.2	7.0	5.0
Index of Manager’s Responsibility**	9.0	4.5	9.0	5.0
Index of Shareholders’ Power***	9.0	6.3	9.0	5.0
Index of Investor Protection****	9.3	5.3	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Guaranteed
Acquisition of Holdings: Possible. A majority stake in the capital of a local company is legal in Singapore.
Obligation to Declare: It is obligatory to declare if the proposed company name includes a trademark or patent name or the name of another company/business already existing in any other country.
Competent Organization For the Declaration: Monetary Authority of Singapore (MAS)
Accounting and Corporate Regulatory Authority
Requests For Specific Authorizations: Though country's legal framework and governmental policies does not require any specific authorization to invest in the country; but certain limits exist in sectors like telecommunications, broadcasting, domestic news media, financial and some professional services. For these sectors, the Articles of Incorporation may include shareholding limits that restrict ownership in corporations by foreign persons. Moreover, Finance Ministry approval is required for acquisition of local bank when exceeding the specified share limit.

Office Real Estate and Land Ownership

Possible Temporary Solutions: Guide for investors

Singapore Expatriates Relocation Specialist
The Possibility of Buying Land and Industrial and Commercial Buildings: Yes
Risk of Expropriation: Singapore has no law forcing foreign investors to transfer ownership locally and has not expropriated any property till date.

Investment Aid

Forms of Aid: Founders of a new business in Singapore can request assistance from certain institutions or national organizations. Generally, aids or incentives are negotiated before the company's registration. Investors can contact the Singapore Trade Development Board (STDB), which mainly aims at promoting foreign investments and exports. Moreover, the Economic Development Board (EDB) is in charge of increasing foreign setting ups in Singapore by granting different forms of subsidies.
Privileged Domains: The government gives preference to investments in high value-added manufacturing and services activities as part of its strategy to replace labor-intensive, low value-added activities that have migrated offshore, particularly China.
Privileged Geographical Zones: The free-trade zones (FTZs) in Singapore may be used for storage and repackaging of import and export cargo and goods transiting for subsequent re-export. Manufacturing is not carried out within the zones. Foreign and local firms have equal access to the FTZ facilities.
Free Zones: Singapore has five free trade zones, out of which, four are for seaborne cargo and one for airfreight.
Organizations Which Finance: Credit Bureau of Singapore Ltd (CBS)

Credit Scan

Investment Opportunities

The Key Sectors of the National Economy: Services, construction, manufacturing.
High Potential Sectors: Aircraft and parts, oil trading and refining.
Privatization Programs: Privatization is being enforced in sectors like Telecommunications, Airlines which are dominated by public companies.
Tenders, Projects and Public Procurement: Ministry of Finance, Government Procurement Opportunities
Tenders Info, Tenders in Singapore
Asian Development Bank, Procurement Plans in Asia
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Telecommunications
Sectors in Decline: Manufacturing.

Finding Assistance For Further Information

Investment Aid Agency: Economic Development Board (EDB)
Other Useful Resources: Singapore Business Federation
Doing Business Guides: The Lexmundi Guide, Doing Business in Singapore
Singapore Commercial Guide 2010 - Buy USA
Deloitte International Tax and Business Guide

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