Singapore

Executive Summary

Singapore maintains an open, heavily trade-dependent economy that plays a critical role in the global supply chain. The government utilized unprecedented levels of public spending to support the economy during the COVID-19 pandemic. Singapore supports predominantly open investment policies and a robust free market economy while actively managing and sustaining Singapore’s economic development. U.S. companies regularly cite transparency, business-friendly laws, tax structure, customs facilitation, intellectual property protection, and well-developed infrastructure as attractive investment climate features. Singapore actively enforces its robust anti-corruption laws and typically ranks as the least corrupt country in Asia. In addition, Transparency International’s 2020 Corruption Perception Index placed Singapore as the fourth-least corrupt nation globally. The U.S.-Singapore Free Trade Agreement (USSFTA), which entered into force in 2004, expanded U.S. market access in goods, services, investment, and government procurement, enhanced intellectual property protection, and provided for cooperation in promoting labor rights and environmental protections.

Singapore has a diversified economy that attracts substantial foreign investment in manufacturing (petrochemical, electronics, pharmaceuticals, machinery, and equipment) and services (financial, trade, and business). The government actively promotes the country as a research and development (R&D) and innovation center for businesses by offering tax incentives, research grants, and partnership opportunities with domestic research agencies. U.S. direct investment (FDI) in Singapore in 2020 totaled $270 billion, primarily in non-bank holding companies, manufacturing, finance, and insurance. Singapore received more than double the U.S. FDI invested in any other Asian nation. The investment outlook was positive due to Singapore’s proximity to Southeast Asia’s developing economies. Singapore remains a regional hub for thousands of multinational companies and continues to maintain its reputation as a world leader in dispute resolution, financing, and project facilitation for regional infrastructure development.

Singapore is poised to attract future foreign investments in digital innovation, pharmaceutical manufacturing, sustainable development, and cybersecurity. The Government of Singapore (hereafter, “the government”) is investing heavily in automation, artificial intelligence, integrated systems, as well as sustainability, and seeks to establish itself as a regional hub for these technologies. Singapore is also a well-established hub for medical research and device manufacturing.

Singapore relies heavily on foreign workers who make up 34 percent of the workforce. The COVID-19 pandemic was initially concentrated in dormitories for low-wage foreign workers in the construction and marine industries, which resulted in strict quarantine measures that brought the construction sector to a near standstill. The government tightened foreign labor policies in 2020 to encourage firms to improve productivity and employ more Singaporean workers, and lowered most companies’ quotas for mid- and low-skilled foreign workers. During the COVID-19 pandemic, the government introduced more programs to partially subsidize wages and the cost to firms of recruiting, hiring, and training local workers

Singapore plans to reach net-zero by or around mid-century but faces alternative energy diversification challenges in setting 2050 net-zero carbon emission targets. Singapore launched its national climate strategy – the Singapore Green Plan 2030 – in February 2021, and focuses on increased sustainability, carbon emissions reductions, fostering job and investment opportunities, and increasing climate resilience and food security.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 4 of 180 http://www.transparency.org/research/cpi/overview
Global Innovation Index 2021 8 of 132 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2020 270,807 https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2020 54,920 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

 

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD) 2021 $373,346 2020 $339,998  

 

www.worldbank.org/en/country

 

 

Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2020 $370,115 2020 $270,800  

BEA data available at https://apps.bea.gov/international/factsheet/

Host country’s FDI in the United States ($M USD, stock positions) 2020 $26,668 2020 $27,300  

BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data

Total inbound stock of FDI as % host GDP 2020 449.6% 2020 545.7%  

UNCTAD data available at

https://unctad.org/topic/investment/world-investment-report

* Source for Host Country Data: https://www.singstat.gov.sg/ 

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 1,465,070 100% Total Outward 727,627 100%
United States 370,090 25% Mainland China 106,406 15%
Cayman Islands 172,690 12% Netherlands 73,272 10%
British Virgin Islands 114,520 8% India 46,240 6%
Japan 97,930 7% United Kingdom 45,413 6%
United Kingdom 88,900 6% Indonesia 44,589 6%
“0” reflects amounts rounded to +/- USD 500,000.
Investment Climate Statements
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