FDI in Singapore

Overview by Globlatrade.net:

FDI in Figures

Singapore has based its economic development on a proactive strategy to attract FDI and trade openness. According to the World Bank, Singapore is the country where it is easiest to do 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 have decreased and are expected to recover slowly in the coming years.

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 35,778 10,912 16,809
FDI Stock (million USD) 322,978 326,790 343,599
Performance Index*, Ranking on 141 Economies 7 50 18
Potential Index**, Ranking on 141 Economies 2 2 -
Number of Greenfield Investments*** 251 295 309
FDI Inwards (in % of GFCF****) 89.3 20.8 27.1
FDI Stock (in % of GDP) 188.3 173.6 194.0

Source: UNCTAD

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 2008, in %
The U.S.A. 11.0
UK 11.0
The Netherlands 10.4
Japan 10.4
Switzerland 6.5
Main Invested Sectors 2008, in %
Financial and Insurance Services 39.8
Manufacturing 22.7
Wholesale & Retail Trade, Hotels & Restaurants 18.0
Transport and Storage 7.5
Professional & Technical, Administrative & Support Services 5.2
Real estate, rent and leasing 4.2

Source: Statistics Singapore

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

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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.

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  • Healy Consultants

    Company Incorporation, Singapore