Executive Summary

Singapore maintains an open, heavily trade-dependent economy, characterized by a predominantly open investment regime, with strong government commitment to maintaining a free market and playing an active management role in Singapore’s economic development. In identifying attractive features of Singapore’s business and investment climate, U.S. companies cite transparency and lack of corruption, business-friendly laws and regulations, tax structure, customs facilitation, and well-developed infrastructure. The World Bank’s 2017 Doing Business report ranked Singapore as the world’s second-easiest country in which to do business. The Global Competitiveness Report 2016-2017 by the World Economic Forum ranked Singapore as the second-most competitive economy globally. Singapore typically ranks as the least corrupt country in Asia and one of the least corrupt in the world, and actively enforces its robust anti-corruption laws. The country’s high ranking in various international indicies is also reflected in the decision of many multinational and foreign firms to choose Singapore as their headquarters for the Asia-Pacific region. The U.S.-Singapore Free Trade Agreement (USSFTA), which came into force on January 1, 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.

U.S. direct investment in Singapore in 2015 reached USD $228.7 billion, primarily in non-bank holding companies, manufacturing (especially computers and electronic products), and finance and insurance – an increase of 10.5 percent from the previous year.

Singapore continues to strengthen its anti-money laundering/counter-terrorism financing regulatory framework, and established an anti-money laundering unit within the Monetary Authority of Singapore in November 2016. Singapore is also in the process of implementing Organisation for Economic Co-operation and Development (OECD) standards to counter tax evasion, aligning its tax system with OECD Base Erosion and Profit Shifting project guidelines, and implementing disclosure requirements in line with Common Reporting Standards on automatic exchange of information from January 2017.

In recent years, the government has tightened policies restricting the number of foreign workers in favor of employment of Singaporean nationals. The Ministry of Manpower introduced measures in 2016 to put companies on a watch list and suspend work pass privileges for firms found not to have a “healthy Singaporean core.” As of March 2017, approximately 250 companies have been placed on the watch list.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2016 7 of 175 http://www.transparency.org/
World Bank’s Doing Business Report “Ease of Doing Business” 2017 2 of 190 doingbusiness.org/rankings
Global Innovation Index 2016 6 of 128 https://www.globalinnovationindex.org/
U.S. FDI in Partner Country ($M USD, stock positions) 2015 USD228,666 http://www.bea.gov/
World Bank GNI Per Capita 2015 USD52,090 http://data.worldbank.org/

Policies Towards Foreign Direct Investment

Singapore maintains a heavily trade-dependent economy. It is characterized by an open investment regime, with some restrictions in the financial services, professional services, and media sectors. The World Bank’s Doing Business 2017 report ranked Singapore as the world’s second-easiest country in which to do business after New Zealand. The 2016-2017 Global Competitiveness Report ranks Singapore as the second-most competitive economy globally. The 2004 U.S.-Singapore Free Trade Agreement (USSFTA) 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 the environment.

The Government of Singapore (GOS) is strongly committed to maintaining a free market, but it also takes a leadership role in actively planning Singapore’s economic development, including through an extensive network of government-linked corporations (GLCs). As of February 2016, the top four Singapore-listed GLCs accounted for about 13.7 percent of total capitalization of the national stock exchange, the Singapore Exchange (SGX). Some observers have criticized the dominant role of GLCs in the domestic economy, arguing that it has displaced or suppressed private sector entrepreneurship and investment.

Singapore’s legal framework and public policies are generally favorable toward foreign investors. Foreign investors are not required to enter into joint ventures or cede management control to local interests, and local and foreign investors are subject to the same basic laws. Apart from regulatory requirements in some sectors detailed below in this section, the government screens investment proposals with the purpose of determining eligibility for various incentive regimes. Singapore places no restrictions on reinvestment or repatriation of earnings or capital. The judicial system, which includes international arbitration and mediation centers and a commercial court, upholds the sanctity of contracts, and decisions are transparent and effectively enforced.

Exceptions to Singapore’s general openness to foreign investment exist in telecommunications, broadcasting, the domestic news media, financial services, legal and accounting services, ports and airports, and property ownership. Under Singapore law, Articles of Incorporation may include shareholding limits that restrict ownership in corporations by foreign persons.


Since 2000, the implementation of the Telecoms Competition Code has allowed foreign and domestic companies seeking to provide facilities-based (fixed line or mobile) or services-based (local, international, and callback) telecommunications services to apply for licenses to operate and deploy telecommunication systems and services. Singapore Telecommunications (SingTel) — a GLC which is currently 51 percent owned by Temasek Holdings (Temasek), a state-owned holding company with the Singapore Minister for Finance as its sole shareholder – faces competition in all market segments. However, its main competitors, M1 and StarHub, are also GLCs. In December 2016, Australian telco TPG Telecom became the first foreign-based mobile network operator and non-GLC to be awarded spectrum rights to provide nationwide mobile coverage. As of February 2017, Singapore has 65 facilities-based (group) and 257 services-based (individual) operators. Since 2007, SingTel has been exempted from dominant licensee obligations for the residential and commercial portions of the retail international telephone services. SingTel is also exempted from dominant licensee obligations for wholesale international telephone services, international managed data, international IP transit, leased satellite bandwidth, terrestrial international private leased circuit, and backhaul services.

In April 2017, Singapore held a General Spectrum Auction for mobile airwaves, the largest such auction in 16 years, to allocate additional blocks of spectrum to accommodate increasing demand for mobile data services. Telcos Singtel, Starhub, M1, and TPG paid a combined total of USD $1.1 billion (SGD $1.6 billion) in this heavily-bid auction for additional frequency bands, many of which were previously used for 2G services, which will be shut down in Singapore in April 2017. GOS will use the auction proceeds to assist infocomm media companies to go digital and for workforce training.

Citing the convergence of the information and communication technology (ICT) and media sectors, combined with a desire to expand the reach of the digital economy to more people, the Infocomm Development Authority of Singapore (IDA) and the Media Development Authority of Singapore (MDA) were restructured to become the Info-communications Media Development Authority (IMDA) and the Government Technology Organization (GTO) in November 2016. IMDA will conduct industry regulation and promotion activities for the info-communication and media sectors, while GTO will be the tech agency to implement government digital initiatives. In March 2017, it was announced that GTO will be placed under a new division in the Prime Minister’s Office, the Smart Nation and Digital Government Office (SNDGO).

IMDA conducts public consultations on major policy reviews and provides decisions and grounds on policy changes to companies concerned.


The local free-to-air broadcasting, cable, and newspaper sectors are effectively closed to foreign firms. Section 44 of the Broadcasting Act restricts foreign equity ownership of companies broadcasting to the Singapore domestic market to 49 percent or less, although the Act does allow for exceptions. Individuals cannot hold more than five percent of the ordinary shares issued by a broadcasting company without the government’s prior approval. The Newspaper and Printing Presses Act restricts equity ownership (local or foreign) to five percent per shareholder and requires that directors be Singapore citizens. Newspaper companies must issue two classes of shares, ordinary and management, with the latter available only to Singapore citizens or corporations approved by the government. Holders of management shares have an effective veto over selected board decisions.

Singapore comprehensively regulates content across all major media outlets. The government also controls the distribution, importation and sale of any foreign newspaper, and significantly restricts freedom of the press, having curtailed or banned the circulation of some foreign publications. Singapore’s leaders have also brought defamation suits against foreign publishers. Such suits have resulted in the foreign publishers issuing apologies and paying damages. Seventeen publications remain prohibited under the Undesirable Publications Act, which restricts the import, sale and circulation of publications that the Government considers contrary to public interest. Examples include pornographic magazines and publications by banned religious groups.

Singaporeans generally face few restrictions on the internet. However, IMDA has blocked various websites containing objectionable material, such as pornography and racist and religious hatred sites. Online news websites which report regularly on Singapore and have a significant reach are individually licensed, which requires these sites to submit a bond of USD $40,000 (SGD $50,000) and to adhere to new requirements to remove prohibited content within 24 hours of notification from IMDA. Some view this regulation as a way to censor online critics of the government. In a high-profile case in 2016, the government charged and sentenced to 10 months imprisonment a foreign operator of an online media news site for sedition on the grounds of generating ill-will and hostility.

MCI announced in January 2017 that the Broadcasting Act, which covers licensing, ownership, and content regulation, of broadcasting companies, services, facilities and equipment, will be reviewed in 2017. MCI indicated that the review will focus on content regulation of overseas content providers to ensure that content is in line with community values and that ratings on streaming sites are in line with Singapore norms. GOS has pledged to consult businesses and the public on any proposed changes.


MediaCorp TV is the only free-to-air TV broadcaster; the government via Temasek owns 100 percent of it. Pay-TV providers StarHub Cable Vision (SCV) and SingNet are wholly-owned subsidiaries of StarHub and SingTel, respectively. Free-to-air radio broadcasters are mainly government-owned, with MediaCorp Radio Singapore being the largest operator. BBC World Services is the only foreign free-to-air radio broadcaster in Singapore.

To rectify the high degree of content fragmentation in the local pay-TV market, and to shift the focus of competition from an exclusivity-centric strategy to other aspects such as service differentiation and competitive packaging, the MDA implemented cross-carriage measures in 2011 requiring pay TV companies designated by MDA to be Receiving Qualified Licensees (RQL) – currently SingTel and StarHub — to cross carry content subject to exclusive carriage provisions. Correspondingly, Supplying Qualified Licensees (SQLs) with an exclusive contract for a channel are required to share that content with other pay TV companies. Content providers consider the measures an unnecessary interference in a competitive market that would deny content holders the ability to negotiate freely in the marketplace, and an interference with their ability to manage and protect their intellectual property. More common content is now available across the different pay-TV platforms, and the operators are beginning to differentiate themselves by originating their own content, offering subscribed content online via PCs and tablet computers, and delivering content via fiber networks.


The Monetary Authority of Singapore (MAS) regulates all banking activities as provided for under the Banking Act. Singapore maintains legal distinctions between foreign and local banks, and the type of license (i.e., full service, wholesale, and offshore) held by foreign commercial banks. As of March 2017, 29 foreign full service licensees, 56 wholesale licensees, and 37 offshore licensees operated in Singapore. An additional 32 merchant banks are licensed to conduct corporate finance, investment banking and other fee-based activities. Offshore and wholesale banks are not allowed to operate Singapore Dollar (SGD) retail banking activities. Full banks may provide the whole range of banking business, but are subject to restrictions on the number of places of business, ATMs and ATM networks. Additional “Qualifying Full Bank” (QFB) licenses may be granted to a subset of full banks, which provides greater branching privileges and greater access to the retail market than other full banks. As of March 2017, there are 8 banks operating QFB licenses.

Except in retail banking, Singapore laws do not distinguish operationally between foreign and domestic banks. However, all banks in Singapore are required to maintain a Domestic Banking Unit (DBU) and an Asian Currency Unit (ACU), separating international and domestic banking operations from each other. Transactions in Singapore dollars can be booked only in the DBU whereas transactions in foreign currency are typically booked in the ACU. The ACU is an accounting unit, which the banks use to book all their foreign currency transactions conducted in the Asian Dollar Market (ADM). This enables additional prudential requirements to be imposed on bank’s domestic businesses in Singapore, while at the same time, avoiding undue restrictions on the offshore activities of banks. In September 2015, MAS concluded a consultation round which proposed for the removal of the requirement for two distinct accounting units as well as changes in the associated regulatory framework. No formal policy announcements following the recommendations have been made.

The government initiated a banking liberalization program in 1999 to ease restrictions on foreign banks and has supplemented this with phased-in provisions under the USSFTA, including removal of a 40-percent ceiling on foreign ownership of local banks and a 20-percent aggregate foreign shareholding limit on finance companies. The Minister in charge of the Monetary Authority of Singapore must approve the merger or takeover of a local bank or financial holding company, as well as the acquisition of voting shares in such institutions above specific thresholds of 5 percent, 12 percent or 20 percent of shareholdings. Although the GOS has lifted the formal ceilings on foreign ownership of local banks and finance companies, the approval of controllers of local banks ensures that this control rests with individuals or groups whose interests are aligned with the long term interests of the Singapore economy and Singapore’s national interests. Of the 29 full service licenses granted to foreign banks, four have gone to U.S. banks. U.S. financial institutions enjoy phased-in benefits under the USSFTA. Since 2006, U.S.-licensed full service banks that are also QFBs have been able to operate at an unlimited number of locations (branches or off-premises ATMs) versus 25 for non-U.S. full service foreign banks with QFB status. U.S. and foreign full-service banks with QFB status can freely relocate existing branches and share ATMs among themselves. They can also provide electronic funds transfer and point-of-sale debit services, and accept services related to Singapore’s compulsory pension fund. In 2007, Singapore lifted the quota on new licenses for U.S. wholesale banks.

Locally and non-locally incorporated subsidiaries of U.S. full-service banks with QFB status can apply for access to local ATM networks. However, no U.S. bank has come to a commercial agreement to gain such access. Despite liberalization, U.S. and other foreign banks in the domestic retail banking sector still face barriers. Under the enhanced QFB program launched in 2012, MAS will require QFBs it deems systemically significant to incorporate locally. If those locally incorporated entities are deemed “significantly rooted” in Singapore, with a majority of Singaporean or permanent resident members, Singapore may grant approval for an additional 25 places of business, of which up to 10 may be branches. Local retail banks do not face similar constraints on customer service locations or access to the local ATM network. As noted above, U.S. banks are not subject to quotas on service locations under the terms of the USSFTA. Holders of credit cards issued locally by foreign banks or other financial institutions sometimes cannot access their accounts through the local ATM networks. They are also unable to access their accounts for cash withdrawals, transfers or bill payments at ATMs operated by banks other than those operated by their own bank or at foreign banks’ shared ATM network. Nevertheless, full-service foreign banks have made significant inroads in other retail banking areas, with substantial market share in products like credit cards and personal and housing loans.

In February 2017, MAS announced upcoming regulatory changes under the Finance Companies Act to enhance finance companies’ role in small and medium enterprise (SME) financing. This includes relaxation of business restrictions on payment and banking services, easing of loan limits, and liberalization of shareholding policy. MAS will liberalize its existing policy of not allowing a foreign takeover of a finance company. This will accord finance companies greater flexibility to explore strategic partnerships and innovative business models that can strengthen their SME financing business, including with foreign partners. MAS is prepared to consider an application for a merger or acquisition, if the prospective merger partner or acquirer commits to maintaining SME financing as a core business of the finance company. In addition, the merger partner or acquirer must be able to demonstrate expertise in SME financing and present proposals to enhance the finance company’s SME lending activities with new technologies, methodologies or business models.

There are two MAS-recognized consumer credit bureaus in Singapore, Credit Bureau (Singapore) Pte Ltd and DP Credit Bureau Pte Ltd.

Singapore has no trading restrictions on foreign-owned stockbrokers. There is no cap on the aggregate investment by foreigners regarding the paid-up capital of dealers that are members of the SGX. Direct registration of foreign mutual funds is allowed, provided MAS approves the prospectus and the fund. The USSFTA has relaxed conditions that foreign asset managers must meet in order to offer products under the government-managed compulsory pension fund (Central Provident Fund Investment Scheme).

Legal Services

The Legal Services Regulatory Authority (LSRA) under the Ministry of Law oversees the regulation, licensing, and compliance of all law practice entities and the registration of foreign lawyers in Singapore. Legal firms with a licensed Foreign Law Practice (FLP) may offer the full range of legal services in foreign law and international law, but cannot practice Singapore Law, except in the context of international commercial arbitration. To practice Singapore law, Foreign Law Practices require either a Qualifying Foreign Law Practice (QFLP) license, a Joint Law Venture (JLV) with a Singapore Law Practice (SLP), or a Formal Law Alliance (FLA) with a SLP. The vast majority of Singapore’s 130 foreign law firms operate FLPs, while QFLPs, JLVs and FLAs each number in the single digits.

The QFLP licenses allow Foreign Law Practices (FLPs) to practice in permitted areas of Singapore law, which excludes constitutional and administrative law, conveyancing, criminal law, family law, succession law, and trust law. As of March 2017, there are nine QFLPs in Singapore, including five U.S. firms.

A Joint Law Venture is a collaboration between a Foreign Law Practice and Singapore Law Practice, which may be constituted as a partnership or company. The Director of Legal Services in the Legal Services Regulatory Authority (LSRA) will consider all the relevant circumstances including the proposed structure and its overall suitability to achieve the objectives for which Joint law Ventures are permitted to be established. Currently, there are two U.S. law firms with Joint Law Ventures in Singapore. U.S. and foreign attorneys are allowed to represent parties in arbitration without the need for a Singapore attorney to be present. There is no clear indication on the percentage of shares that each JLV partner may hold in the JLV.

With the exception of law degrees from a handful of designated U.S., British, Australian, and New Zealand universities, no foreign university law degrees are recognized for purposes of admission to practice law in Singapore. Under the USSFTA, Singapore recognizes law degrees from Harvard University, Columbia University, New York University, and the University of Michigan. Singapore will admit to the Singapore professional bar- a citizen or permanent-resident law school graduates of those designated universities who are ranked among the top 70 percent of their graduating class or have obtained lower-second class honors (under the British system).

Engineering and Architectural Services

Engineering and architectural firms can be 100 percent foreign-owned. Engineers and architects are required to register with the Professional Engineers Board and the Architects Board, respectively, to practice in Singapore. All applicants (both local and foreign) must have at least four years of practical experience in engineering or architectural works, and pass written and oral examination set by the respective Board.

Accounting and Tax Services

The major international accounting firms operate in Singapore. Registration as a public accountant is required for appointment as an auditor of financial statements in Singapore, although registration as a public accountant is not required to provide other accountancy services, such as accounting, tax and corporate advisory work. All entities that provide public accountancy services must be under the control and management of partner(s) who are public accountants residing in Singapore. If the firm has two partners, at least one must be a public accountant. If the firm has more than two partners, two-thirds of the partners must be public accountants residing in Singapore. Only public accountants who are members of the Institute of Singapore Chartered Accountants (ISCA) of Singapore and registered with Accounting and Corporate Regulatory Authority may practice in Singapore.


Singapore completed efforts to liberalize its gas market with the amendment of the Gas Act and implementation of a Gas Network Code in 2008, which were designed to give gas retailers and importers direct access to the onshore gas pipeline infrastructure. However, key parts of the local gas market, such as town gas retailing, domestic gas pipelines and access to offshore gas pipelines, remain controlled by incumbent Singaporean firms. Singapore has sought to grow its supply of Liquefied Natural Gas (LNG), and BG Singapore Gas Marketing Pte Ltd (acquired by Royal Dutch Shell in February 2016) was appointed in 2008 as the first aggregator with an exclusive franchise to import LNG to be sold in its re-gasified form in Singapore.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and local entities may readily establish, operate, and dispose of their own enterprises in Singapore, and there is no overarching screening process for foreign investment. A foreigner who wants to set up a company in Singapore is required to appoint a locally resident director. The foreigner can continue to reside outside Singapore. Foreigners who wish to incorporate a company and be present in Singapore to manage its operations are strongly advised to seek approval from the Ministry of Manpower (MOM) before registration. Except for representative offices (where foreign firms maintain a local representative but do not conduct commercial transactions in Singapore), there are no restrictions on carrying out remunerative activities.

GOS maintains close and continuous engagement with investors through the Economic Development Board (EDB), which includes specialized offices within four clusters (consumer, engineering, enterprise, and new businesses) across multiple sectors. EDB is the lead investment promotion agency that facilitates foreign investment into Singapore (https://www.edb.gov.sg ), assists companies in setting up business in Singapore, and provides incentives including grants, allowances, awards, tax exemptions, and reduced tax rates for investments in certain sectors or categories (https://www.edb.gov.sg/content/edb/en/why-singapore/ready-to-invest/incentives-for-businesses.html ).

There are no general, economy-wide limits on foreign ownership or control. All businesses in Singapore must be registered with the Accounting and Corporate Regulatory Authority. Foreign investors can operate their businesses in one of the following forms: sole proprietorship, limited partnership, limited liability partnership, incorporated company, foreign company branch or representative office. Stricter disclosure requirements were passed in March 2017 which require foreign companies registered in Singapore to maintain public registers of their members, while locally incorporated and foreign companies will be required to maintain registers of controllers (individuals or legal entities with more than 25 percent interest or control of the company), aimed at preventing money laundering.

Exceptions to Singapore’s general openness to foreign investment exist in telecommunications, broadcasting, the domestic news media, financial services, legal services, public accounting services, ports and airports, and property ownership. Under Singapore law, Articles of Incorporation may include shareholding limits that restrict ownership in corporations by foreign persons.

Other Investment Policy Reviews

Singapore underwent a trade policy review with the World Trade Organization (WTO) in July 2016. No major policy recommendations were raised. This is its only investment policy review in the past three years. Additional information on the review is available on the WTO website (https://www.wto.org/english/tratop_e/tpr_e/tp443_e.htm ).

Business Facilitation

Singapore’s online business registration process is clear and efficient, and allows foreign companies to register. All businesses must be registered with the Accounting & Corporate Regulatory Authority (ACRA) through the website (https://www.acra.gov.sg/home/ ), including any individual, firm or corporation that carries out business for a foreign company. Applications are typically processed immediately after the application fee is paid, but may take between 14 days to 2 months if the application needs to be referred to another agency for approval or review. The process of establishing a foreign-owned limited liability company (LLC) in Singapore is among the fastest of the countries surveyed by IAB and the fastest among IAB countries in the East Asia and the Pacific region. A step-by-step guide to registering a business or company in Singapore is provided at the SME Portal (formerly known as the EnterpriseOne Portal): https://www.smeportal.sg/ . Additional information on registering a branch of a foreign company is available through the Singapore’s EDB.

Foreign companies may lease or buy privately or publicly held land in Singapore, though there are some restrictions on foreign ownership of property. Foreign companies are free to open and maintain bank accounts in foreign currency. There is no minimum paid-in capital requirement, but at least 1 subscriber share must be issued for valid consideration at incorporation.

The International Arbitration Act (IAA) regulates international arbitration in Singapore. Domestic arbitration is regulated by the Arbitration Act (AA). The IAA is heavily based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law, although with a few significant differences. Arbitration agreements must be in writing, and oral agreements and arbitration agreements that can be inferred through conduct are not enforceable. The Singapore International Arbitration Centre is the major arbitral institution and its increasing caseload reflects Singapore’s policy of encouraging the use of alternative modes of dispute resolution, including arbitration. On average, it takes around 8 weeks to enforce an arbitration award rendered in Singapore, from filing an application to a writ of execution attaching assets (assuming there is no appeal), and 7 weeks for a foreign award.

Outward Investment

Singapore places no restrictions on domestic investors investing abroad. The host government promotes outward investment through International Enterprise (IE) Singapore, a statutory board under the Ministry of Trade and Industry. It provides market information, business contacts, and financial assistance and grants for internationalizing companies. While it has a global reach and runs overseas centers in major cities across the world, a large share of its overseas centers are located in major trading and investment partners and regional markets like China, India and the nine other countries in the Association of Southeast Asian Nations (ASEAN) region.

Singapore has 35 bilateral investment treaties (BIT) currently in force. These agreements mutually protect nationals or companies of either economy against war and non-commercial risks of expropriation and nationalization. It has signed an additional eight BITs which have yet to be implemented.

Singapore has 12 bilateral and 9 regional free trade agreements (FTA) currently in force. Singapore has signed free trade/economic cooperation agreements that include investment chapters with Australia, China, the European Free Trade Association (Switzerland, Norway, Liechtenstein, and Iceland), India, Japan, New Zealand, Panama, Peru, South Korea, Costa Rica, the United States, and Chinese Taipei. Singapore also has agreements with Jordan and the Gulf Cooperation Council (comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), but these agreements do not contain investment chapters. Singapore is a member of ASEAN and the ASEAN Free Trade Area, which has in force FTAs with Australia and New Zealand, China, India, South Korea, and a Comprehensive Economic Partnership Agreement with Japan. Singapore also has a Trans-Pacific Strategic Economic Partnership Agreement with Brunei, Chile, and New Zealand.

Singapore has completed negotiations with the European Union and Turkey and is negotiating FTAs with Canada, Mexico, Pakistan, Ukraine, and Sri Lanka. ASEAN is currently negotiating FTA extensions with India and Japan to cover services and investments, as well as the Regional Comprehensive Economic Partnership (RCEP), which includes ASEAN members plus Australia, China, India, Japan, New Zealand, and South Korea.

Singapore has signed Avoidance of Double Taxation Agreements with 82 countries, but not with the United States. U.S. financial regulations do not restrict foreign banks’ ability to hold accounts for U.S. citizens. Anecdotal evidence suggests, however, that U.S. citizens may be constrained in their ability to open bank accounts at some institutions, as some Americans have been turned away by banks, or required to meet a higher deposit threshold, reportedly as a result of the additional reporting requirements associated with the U.S. Foreign Account Tax Compliance Act (FATCA) and other U.S. financial regulations. The U.S. Embassy routinely encounters U.S. citizens with complaints about difficulty in opening accounts or not being allowed to open accounts. There have also been cases of U.S. citizens with existing accounts who have been asked by their banks to close them. U.S. citizens are encouraged to alert the nearest U.S. Embassy of any practices they encounter with regard to the provision of financial services. No other tax disputes have been reported.

Recent major changes to the tax regime include the implementation of OECD’s Common Reporting Standards (CRS), as well as updates to tax incentives and regimes in line with Base Erosion and Profit Shifting minimum standards. Under the CRS, which has been in effect since January 1, 2017, Singapore-based Financial Institutions are required to establish the tax residency status of all their account holders, collect and retain CRS information for all non-Singapore tax residents in the case of new accounts, and report to tax authorities the financial account information of account holders who are tax residents of jurisdictions with which Singapore has a Competent Authority Agreement (CAA) to exchange the information. This will facilitate the automatic exchange of information between Singapore and CAA partners on account numbers, account holder details, account balances on reportable accounts, as well as details of interest, earnings, and proceeds from asset disposals on custodian accounts. As of March 15, 2017, Singapore has concluded 20 bilateral CAAs, but is not a signatory to the Multilateral Competent Authority Agreement .

Transparency of the Regulatory System

The government establishes clear rules that foster competition and the U.S.-Singapore FTA enhances transparency by requiring regulatory authorities to consult with interested parties before issuing regulations, and to provide advance notice and comment periods for proposed rules, as well as to publish all regulations. Singapore’s legal, regulatory, and accounting systems are transparent and consistent with international norms.

Notices of proposed legislation to be considered by Parliament are published, including the text of the laws, the dates of the readings, and whether or not the laws eventually pass. The government has established a centralized Internet portal (www.reach.gov.sg) to solicit feedback on selected draft legislation and regulations, a process that is being used with increasing frequency. There is no stipulated consultative period, but public consultations typically last for four weeks, with results usually consolidated and published on relevant websites. As noted in the “Openness to Foreign Investment” section, some U.S. companies, in particular, in the telecommunications and media sectors, are concerned about the government’s lack of transparency in its regulatory and rule-making process. These mechanisms also apply to investment laws and regulations.

The Parliament of Singapore website publishes a database of all bills introduced, read and passed in Parliament in chronological order, from 2006. The contents are the actual draft texts of the proposed legislation/legislative amendments. However, there is no centralized online location where key regulatory actions are published. Regulatory actions are published separately on websites of Statutory Boards (https://www.parliament.gov.sg/publications/bills-introduced ).

Industry self-regulation occurs in several areas, including advertising and in corporate governance. Advertising Standards Authority of Singapore  (ASAS), an advisory council under the Consumers Association of Singapore, administers the Singapore Code of Advertising Practice, which focuses on ensuring that advertisements are legal, decent and truthful. Singapore has a private sector-led Council on Corporate Disclosure and Governance to implement the country’s Code of Corporate Governance. Compliance with the Code is not mandatory but listed companies are required under the Singapore Exchange Listing Rules to disclose their corporate governance practices and give explanations for deviations from the Code in their annual reports. The stock exchange, SGX, plays the role of a self-regulatory organization (SRO) in listings, market surveillance, and member supervision to uphold the integrity of the market and ensure participants’ adherence to trading and clearing rules. There have been no reports of discriminatory practices aimed at foreign investors.

Rule-making authority is vested in the Parliament to pass laws that determine the regulatory scope, purpose, rights and powers of the regulator and the legal framework for the industry. Regulatory authority is vested in Government Statutory Boards, which are organizations that have been given autonomy to perform an operational function by legal statutes passed as Acts in parliament, and report to a specific Ministry. Local laws give regulatory bodies’ wide discretion to modify regulations and impose new conditions, but in practice agencies use this positively to adapt incentives or other services on a case-by-case basis to meet the needs of foreign as well as domestic companies. Acts of Parliament also confer certain powers on a Minister or other similar persons or authorities to make rules or regulations in order to put the Act into practice, and are known as subsidiary legislation. Singapore’s legal and accounting procedures are transparent and consistent with international norms, and they rank highly in international comparisons (http://worldjusticeproject.org/rule-of-law-index ). Singapore’s prescribed accounting standards (Financial Reporting Standards or FRS) are aligned with those of the International Accounting Standards Board. Companies can deviate from these standards when required to present a true and fair set of financial statements. Singapore-incorporated, publicly-listed companies can use certain alternative standards such as International Accounting Standards (IAS) or the U.S. Generally Accepted Accounting Principles (U.S. GAAP) if they are listed on foreign stock exchanges that require these standards. They do not need to reconcile their accounts with FRS. All other Singapore-incorporated companies must use FRS unless the Accounting and Corporate Regulatory Authority exempts them.

International Regulatory Considerations

Singapore is part of ASEAN, which is working towards the 2025 ASEAN Economic Community (AEC) blueprint aimed at achieving a single market and production base, with a free flow of goods, services, and investment within the region. While ASEAN is working towards regulatory harmonization, no regional regulatory systems are planned or in place, and agreements and regulations are enacted through national regulatory systems.

WTO’s 2016 trade policy review notes that Singapore’s guiding principle for standardization is to align national standards with international standards, and is an elected member of the ISO and IEC Councils. Singapore encourages the direct use of international standards whenever possible. Singapore Standards (SS) are developed when there is no appropriate international standard equivalent, or when there is a need to customize standards to meet domestic requirements. As at end-2015, Singapore had a stock of 553 SS, about 40 percent of which were references to international standards. SPRING Singapore, the Agri-Food and Veterinary Authority and the Ministry of Trade and Industry are the three national enquiry points under the TBT Agreement. There are no known reports of omissions in reporting to TBT.

A non-exhaustive list of major international norms and standards referenced or incorporated into the country’ regulatory systems include Base Erosion and Profit Shifting (BEPs) project, Common Reporting Standards (CRS), Basel III, EU Dual-Use Export Control Regulation, 27 International Labor Organization (ILO) conventions on labor rights and governance, UN conventions, and WTO Agreements.

Legal System and Judicial Independence

Singapore’s legal system has its roots in English common law and practice, and is enforced by courts of law. The current judicial process is procedurally competent, fair and reliable. In the 2016 Rule of Law Index by World Justice Project, it is ranked overall ninth in the world, ranked first on order and security and regulatory enforcement, second in absence of corruption, fourth on civil and criminal justice, 20th on constraints on government powers, 24th on open government, and 36th on fundamental rights. Singapore’s legal procedures are ranked second in the world in World Bank’s 2016 Ease of Doing Business contract enforcement sub-index measuring speed, cost, and quality of judicial processes. The judicial system remains independent of the executive branch and the executive does not interfere in judiciary matters.

Laws and Regulations on Foreign Direct Investment

Singapore strives to promote an efficient, business-friendly regulatory environment. Tax, labor, banking and finance, industrial health and safety, arbitration, wage and training rules and regulations are formulated and reviewed with the interests of both foreign investors and local enterprises in mind. Starting in 2005, a Rules Review Panel, comprising senior civil servants, began overseeing a review of all rules and regulations; this process will be repeated every five years. A Pro-Enterprise Panel of high-level public sector and private sector representatives examines feedback from businesses on regulatory issues and provides recommendations to the government.

Major legislative amendments over the past year include amendments to the Companies Act and Limited Liability Partnerships Act, which went with effect in March 2017, aimed at improving transparency, reducing the regulatory burdens of business, and improving debt restructuring processes in Singapore. The Judicial Management (bankruptcy proceedings) process has been tweaked to allow companies to apply for judicial management when the company is unlikely to pay its debts; the Court will be given an overriding power to grant a judicial management order even if a secured creditor objects, and additional rescue financing provisions will be included

The Monetary Authority of Singapore (MAS) has also tightened enforcement of money laundering provisions. It set up an anti-money laundering unit in November 2016, and has stepped up enforcement and pressed unprecedented jail terms on private bankers associated with the 1Malaysia Development Bhd (1MDB) case. MAS also fined several banks for lapses in internal controls, and ordered the closure of Falcon Bank and BSI bank, which were closely associated with the transactions.

Competition and Anti-Trust Laws

The Competition Commission of Singapore (CCS) is a statutory board under the Ministry of Trade and Industry and is tasked to administer and enforce the Competition Act. The Act contains provisions on anti-competitive agreements, decisions, and practices; abuse of dominance; enforcement and appeals process; and mergers and acquisitions. The Competition Act was enacted in 2004 in accordance with the U.S-Singapore FTA commitments, which contains specific conduct guarantees to ensure that Singapore’s government-linked corporations (GLCs) will operate on a commercial and non-discriminatory basis towards U.S. firms. GLCs with substantial revenues or assets are also subject to enhanced transparency requirements under the FTA.

Expropriation and Compensation

Singapore has not expropriated foreign owned property and has no laws that force foreign investors to transfer ownership to local interests. 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. The USSFTA contains strong investor protection provisions relating to expropriation of private property and the need to follow due process; provisions are in place for an owner to receive compensation based on fair market value. No significant disputes are pending.

Dispute Settlement

ICSID Convention and New York Convention

Singapore is party to the Convention on the Settlement of Investment Disputes (ICSID convention) and the convention on the Recognition and Enforcement of Foreign Arbitration Awards (1958 New York Convention). Singapore passed an Arbitration (International Investment Disputes) Act to implement the ICSID in 1968. The New York Convention is enacted into Singapore law in the IA Act and is annexed to the IA Act as the Second Schedule. This allows the enforcement of arbitral awards from the other signatories to the New York Convention. (http://www.lexology.com/library/detail.aspx?g=3f833e8e-722a-4fca-8393-f35e59ed1440 )

Investor-State Dispute Settlement

Singapore acceded to the New York Convention of 1958 on August 21, 1986, and subsequently re-enacted most of its provisions in Part III of the IAA. By acceding to this Convention, Singapore is bound to recognize awards made in any other country which is a signatory to the Convention. Singapore is a member of the Commonwealth of Nations and, under the Reciprocal Enforcement of Commonwealth Judgments Act (RECJA), recognizes judgments made in the United Kingdom, as well as jurisdictions that are part of the Commonwealth and which Singapore has reciprocal arrangements with for the recognition and enforcement of judgments. The Act lists the countries with which such arrangements exist, and of the 54 countries that are members of the Commonwealth, nine have been listed. (http://www.lawgazette.com.sg/2001-8/Aug01-focus4.htm )

Singapore has had no investment disputes with U.S. persons or other foreign investors in the past 10 years which have proceeded to litigation. Any disputes settled by arbitration/mediation would remain confidential. There have been no claims made by U.S. investors under the USSFTA. There is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Alternative dispute resolution (ADR) institutions include the Singapore International Arbitration Centre (SIAC), Singapore Mediation Centre (SMC), Maxwell Chambers, Asia’s first integrated dispute resolution complex, and the Singapore Chamber of Maritime Arbitration. Singapore’s extensive arbitration centers have contributed to its development as a regional hub for alternative disputes mechanisms. Arbitral awards in Singapore, for either domestic or international arbitration, are legally binding and enforceable in Singapore domestic courts, as well as in jurisdictions which have ratified the 1958 New York Convention. Domestic arbitration is governed by the Arbitration Act (AA). The AA is also primarily based on the UNCITRAL Model Law.

Bankruptcy Regulations

Singapore has bankruptcy laws, with both debtors and creditors able to file a bankruptcy claim. Singapore is ranked number 29th of 190 countries globally for resolving insolvency in the World Bank’s 2016 Doing Business index. While Singapore performed well in rankings for recovery rate, time and cost of proceedings, it did not score highly in the creditor participation sub-index. In particular, the insolvency framework does not require approval by the creditors for sale of substantial assets of the debtor or approval by the creditors for selection or appointment of the insolvency representative. Amendments to the Companies Act passed in March 2017 include additional disclosure requirements by debtors, while increasing debtor protections and cram-down provisions that will allow a scheme to be approved by the court even if a class of creditors oppose the scheme, provided the dissenting class of creditors are not unfairly prejudiced by the scheme. Bankruptcy is not criminalized in Singapore.

Investment Incentives

The GOS offers numerous investment incentives across various sectors for which foreign investors are eligible. A number of broad-based tax incentives, such as the Automation Support Package, Pioneer Incentive Scheme, Development and Expansion Incentive, and the Investment Allowance Incentive are also available to manufacturing industries. Singapore provides research funding under the Research Innovation Enterprise plan. Singapore’s EDB sponsors a Research Incentive Scheme for Companies (RISC) to award government grants to develop research and development capabilities in strategic areas of technology. The scheme targets businesses registered in Singapore, including foreign firms, and encourage companies to set up research and development centers in Singapore.

Foreign Trade Zones/Free Ports/Trade Facilitation

Singapore has ten free-trade zones (FTZs) in five geographical areas operated by three FTZ authorities, PSA Corporation Limited, Jurong Port Pte Ltd, and Changi Airport Group (Singapore) Pte Ltd. The FTZs, which include port facilities, air cargo terminals, and logistics areas, may be used for storage and repackaging of import and export cargo, and goods transiting Singapore for subsequent re-export. Manufacturing is not carried out within the zones. Foreign and local firms have equal access to the FTZ facilities.

Performance and Data Localization Requirements

Performance requirements are applied uniformly and systematically to both domestic and foreign investors. Singapore has no forced localization policy requiring domestic content in goods or technology. The government does not require investors to purchase from local sources or specify a percentage of output for export. There are no rules forcing the transfer of technology. There are no requirements for foreign IT providers to turn over source code and/or provide access to encryption.

Singapore does not have a data localization policy. The industry regulator is IMDA, a statutory board under the Ministry of Communications and Information (MCI). Personal data is protected under the Personal Data Protection Act (PDPA) of 2014, covering electronic and non-electronic data, and includes provisions that requires companies to ensure that the recipient of data transferred to another country is legally bound by “enforceable obligations” to provide to the transferred personal data a standard of protection that is at least comparable to the protection under the Act.

Real Property

Property rights and interests are enforced in Singapore. Residents have access to mortgages and liens, with reliable recording of properties. In the 2017 World Bank Doing Business Report, Singapore ranks second in the world in enforcing contracts and 19th in registering property.

Foreigners are not allowed to purchase public housing (HDB) in Singapore, and prior approval from the Singapore Land Authority is required to purchase landed residential property and vacant residential land. Foreigners are allowed to purchase private sector housing (condominiums or any unit within a building) without the need to obtain prior approval, however they are not allowed to acquire all the apartments within a building or all the units in an approved condominium apartment without prior approval.

There are no restrictions on foreign ownership of industrial and commercial real estate. In December 2011, the GOS enacted an additional effective 10 percent tax, or Additional Buyer’s Stamp Duty (ABSD), on foreigners who purchase homes in Singapore. In January 2013, the GOS further raised the ABSD to 15 percent; however, U.S. citizens are accorded national treatment under the FTA, meaning only second and subsequent purchases of residential property will be subject to 7 and 10 percent ABSD, the same as Singaporean citizens.

Intellectual Property Rights

Singapore has developed one of the stronger intellectual property rights (IPR) regimes in Asia and has brought its IPR laws in line with international standards. However, some concerns remain in certain areas such as business software piracy, online piracy, and enforcement.

The USSFTA ensures that government agencies will not grant approval to patent-violating products, but Singapore does allow parallel imports. Under the amended Patents Act, the patent owner has the right to bring an action to stop an importer of “grey market goods” from importing the patent owner’s patented product if the product has not previously been sold or distributed in Singapore.

The USSFTA ensures protection of test data and trade secrets submitted to the government for product approval purposes. Disclosure of such information is prohibited for a period of five years for pharmaceuticals and ten years for agricultural chemicals. Singapore has no specific legislation concerning trade secrets. Instead, it protects investors’ commercially valuable proprietary information under common law by the Law of Confidence. U.S. industry has expressed concern that this provision is inadequate.

Singapore is a member of the WTO and a party to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It is a signatory to other international copyright agreements, including the Paris Convention, the Berne Convention, the Patent Cooperation Treaty, the Madrid Protocol, and the Budapest Treaty. The World Intellectual Property Organization (WIPO) Secretariat opened offices in Singapore in 2005 (http://www.wipo.int/about-wipo/en/offices/singapore/ ). Amendments to the Trademark Act, which took effect in January 2007, fulfill Singapore’s obligations in WIPO’s revised Treaty on the Law of Trademarks.

Singapore ranked 8th in the world in the international IP index conducted by the U.S. Chamber of Commerce’s International IP Index. The index noted that Singapore’s key strengths included an advanced national IP framework, life sciences IP rights, a patent enforcement legal framework that is adequate and generally applied, and copyright framework strengthened in the past several years.

Singapore does not publicly report statistics on seizures of counterfeit goods, and does not score highly on seizure data availability in the U.S. Chamber of Commerce global counterfeiting report, with “no” to all four data transparency questions. It ranked 7th out of 17 countries surveyed in Asia in the European Chamber of Commerce’s 2016 Illicit Trade index, due to low ratings for free trade zone governance and government cooperation with stakeholders in countering illicit goods trade. Singapore is not listed in the U.S. Trade Representative’s (USTR) Special 301 report, or the notorious market report. (http://illicittradeindex.eiu.com/ECC%20Illicit%20trade%20paper%20V9_Oct12.pdf )

Capital Markets and Portfolio Investment

The government takes a favorable stance towards foreign portfolio investment, fixed asset investments in particular. While it welcomes capital market investments, the government has introduced macro-prudential policies aimed at reducing foreign speculative inflows in the real estate sector since 2009. The government promotes Singapore’s position as an asset and wealth management center, and asset under management grew 9 percent to USD $1.8 trillion (SGD $2.6 trillion) in 2015 – the latest year for which data are available.

GOS facilitates the free flow of financial resources into product and factor markets, and the SGX is Singapore’s stock market. An effective regulatory system exists to encourage and facilitate portfolio investment. Credit is allocated on market terms and foreign investors can access credit, U.S. dollars, Singapore dollars (SGD), and other foreign currencies on the local market. The private sector has access to a variety of credit instruments through banks operating in Singapore. The government respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions.

Money and Banking System

Singapore’s banking system is sound and well-regulated by the Monetary Authority of Singapore (MAS), and it serves as a financial hub for the region. Banks have a very high domestic penetration rate, and according to World Bank Financial Inclusion indicators, 96.4 percent of persons held a financial account in 2014 (latest year available). According to a 2014 McKinsey Asia Personal Financial Services Survey, the average number of banking products held by the customer is 5.72, while 94 percent of respondents used internet banking via PC or smartphone. Local Singapore banks are relatively small by regional standards, but are reasonably profitable and have stronger capital levels and credit ratings than many of their peers in the region. Banks are statutorily prohibited from engaging in non-financial business. Banks can hold 10 percent or less in non-financial companies as an “equity portfolio investment.” As of 2016Q4, the non-performing loans ratio (NPL ratio) of the three local banks averaged 1.4 percent, up from the NPL ratio of 1.1 in 2015Q4. The World Bank records Singapore’s banking sector overall NPL ratio at 1.068 in 2016.

Foreign banks require licenses to operate in the country. The tiered licenses, for Merchant, Offshore, Wholesale, Full Banks and Qualifying Full Banks (QFBs) subject banks to further prudential safeguards in return for offering a greater range of services. Only Full Banks and QFBs can operate Singapore dollar retail banking activities, but are subject to restrictions on the number of places of business, ATMs and ATM networks. U.S. financial institutions enjoy phased-in benefits under the USSFTA. Since 2006, U.S.-licensed full service banks that are also QFBs have been able to operate at an unlimited number of locations (branches or off-premises ATMs) versus 25 for non-U.S. full service foreign banks with QFB status.

Under the OECD Common Reporting Standards (CRS) which has been in effect since January 2017, Singapore-based Financial Institutions (SGFIs) – depository institutions such as banks, specified insurance companies, investment entities and custodial institutions – are required to establish the tax residency status of all their account holders, collect and retain CRS information for all non-Singapore tax residents in the case of new accounts and report to tax authorities the financial account information of account holders who are tax residents of jurisdictions with which Singapore has a Competent Authority Agreement (CAA) to exchange the information.

U.S. financial regulations do not restrict foreign banks’ ability to hold accounts for U.S. citizens. Anecdotal evidence suggests, however, that U.S. citizens may be constrained in their ability to open bank accounts at some institutions, as some Americans have been turned away by banks reportedly, or required to meet a higher deposit threshold, as a result of the additional reporting requirements associated with the U.S. Foreign Account Tax Compliance Act (FATCA) and other U.S. financial regulations. The U.S. Embassy routinely encounters U.S. citizens with complaints about not being allowed to open accounts. There have also been cases of U.S. citizens with existing accounts who have been asked by their banks to close them. U.S. Citizens are encouraged to alert the nearest U.S. Embassy of any practices they encounter with regard to the provision of financial services.

Foreign Exchange and Remittances

Foreign Exchange

The USSFTA commits Singapore to the free transfer of capital, unimpeded by regulatory restrictions. Singapore places no restrictions on reinvestment or repatriation of earnings and capital, and maintains no significant restrictions on remittances, foreign exchange transactions and capital movements.

Singapore’s monetary policy has been centered on the management of the exchange rate since 1981, with the primary objective of promoting medium term price stability as a sound basis for sustainable economic growth. There are three main features of the exchange rate system in Singapore. MAS operates a managed float regime for the Singapore dollar with the trade-weighted exchange rate allowed to fluctuate within a policy band. The Singapore dollar is managed against a basket of currencies of its major trading partners. The exchange rate policy band is periodically reviewed to ensure that it remains consistent with the underlying fundamentals of the economy.

Remittance Policies

There are no time or amount limitations on remittances. No significant changes to investment remittance was implemented or announced over the past year.

Sovereign Wealth Funds

Singapore’s reserves are managed by three entities. GIC Private Limited (GIC) is the sovereign wealth fund in Singapore that manages GOS’ substantial investments, fiscal, and foreign reserves, with the stated objective to achieve long-term returns and preserve the international purchasing power of the reserves. Temasek is a holding company wholly-owned by the Singapore Minister for Finance. The MAS, as the central bank of Singapore, manages the Official Foreign Reserves, and a significant proportion of its portfolio is invested in liquid financial market instruments.

GIC does not publish the size of the funds under management, but some industry observers estimate its managed assets exceed USD $300 billion. GIC does not invest domestically, but manages Singapore’s international investments, which are generally passive (non-controlling) investments in publicly-traded entities. The United States is its top investment destination, accounting for 34 percent of GIC’s portfolio as of March 2016, while Asia ex-Japan accounts for 20 percent, the Eurozone 12 percent, Japan 11 percent and UK 7 percent. Investments in the United States are diversified and include industrial and commercial properties, student housing, power transmission companies, and financial, retail and business services. Although not required by law, GIC has published an annual report since 2008.

Temasek began as a holding company for Singapore’s state-owned enterprises, now GLCs, but has since branched to other asset classes, and often holds significant stake in companies. As of March 2016, Temasek’s portfolio value reached USD $242 billion, and its asset exposure to Singapore was 29 percent; 40 percent in the rest of Asia, and 10 percent in North America. Temasek’s stated goal is to deliver sustainable value to its shareholder, the Singapore government, over the long term. Temasek formerly focused on managing industries to promote economic development, but has since shifted its emphasis to commercial objectives. Temasek has published an annual report since 2004, but only provides consolidated financial statements, which aggregate all of Temasek’s subsidiaries into a single financial report. GIC and Temasek follow the Santiago Principles for good practices in SWF. Singapore is a member of the IMF International Working Group of Sovereign Wealth Funds.

Other investing entities of government funds include EDB Investments Pte Ltd, Singapore’s Housing Development Board, and other government statutory boards with funding decisions driven by goals emanating from the central government

Singapore has an extensive network of government-linked corporations (GLC) that are fully or partially owned by Temasek Holdings, a holding company with the Singapore Minister for Finance as its sole shareholder. Singapore GLCs play a substantial role in Singapore’s domestic economy, especially in strategically important sectors including telecommunications, media, public transportation, defense, port, gas, electricity grid, and airport operations. In addition, the GLCs are also present in many other sectors of the economy, including banking, subway, airline, consumer/lifestyle, commodities trading, oil and gas engineering, postal services, infrastructure, and real estate. Consolidated figures of total assets, net income, and numbers employed in state-owned enterprises (SOEs) are not publicly available, but Temasek’s domestic asset ownership stake in SOEs is estimated at USD $70 billion. There is no published list of SOEs.

Temasek’s annual report notes that its portfolio companies are guided and managed by their respective boards and management, and Temasek does not direct their business decisions or operations. However, as a substantial shareholder, corporate governance within GLCs typically are guided or influenced by policies developed by Temasek. There are differences in corporate governance disclosures and practices across the GLCs, and GLC boards are allowed to determine their own governance practices, with Temasek advisors occasionally meeting with the companies to make recommendations. GLC board seats are not specifically allocated to government officials, although it “leverages on its networks to suggest qualified individuals for consideration by the respective boards”, and leaders formerly from the armed forces or civil service are often represented on boards and fill senior management positions. Temasek exercises its shareholder rights to influence the strategic directions of its companies but does not get involved in the day-to-day business and commercial decisions of its firms and subsidiaries.

GLCs operate on a commercial basis and compete on a generally equal basis with private businesses, both local and foreign. Singapore officials highlight that the government does not interfere with the operations of GLCs or grant them special privileges, preferential treatment or hidden subsidies, asserting that GLCs are subject to the same regulatory regime and discipline of the market as private sector companies. Observers, however, have been critical of cases where GLCs have entered into new lines of business or where government agencies have “corporatized” certain government functions, in both circumstances entering into competition with already-existing private businesses. Some private sector companies have said they encountered unfair business practices and opaque bidding processes that appeared to favor incumbent, government-linked firms. In addition, they note that the GLC’s institutional relationships with the government give them natural advantages in terms of access to cheaper funding and opportunities to shape the economic policy agenda in ways that benefit their companies.

The USSFTA contains specific conduct guarantees to ensure that GLCs will operate on a commercial and non-discriminatory basis towards U.S. firms. GLCs with substantial revenues or assets are also subject to enhanced transparency requirements under the USSFTA. In accordance with its USSFTA commitments, Singapore enacted the Competition Act in 2004 and established the Competition Commission of Singapore in January 2005. The Act contains provisions on anti-competitive agreements, decisions, and practices; abuse of dominance; enforcement and appeals process; and mergers and acquisitions.

Privatization Program

The government has ongoing plans to privatize several GLCs, though the government is likely to retain controlling stakes in strategically important sectors, including telecommunications, media, public transportation, defense, port, gas, electricity grid, and airport operations. The Energy Market Authority (EMA) plans to fully open up the electricity retail market to competition by the second half of 2018, extending the liberalization of the retail market from commercial and industrial consumers with an average monthly electricity consumption of at least 2,000 kWh to households and smaller businesses. The bidding process for retail electricity markets has not been announced. SingTel will also divest ownership of NetLink Trust, which owns the infrastructure of the all-fiber national broadband network (NBN), by April 2018. Divestment is planned to be conducted by Initial Public Offering (IPO), which will be non-discriminatory and transparent. Foreign investors will be able to participate in these privatization programs.

The awareness and implementation of corporate social responsibility (CSR) in Singapore has been increasing since the formation of the Singapore Compact for Corporate Social Responsibility, which was set up to provide a forum for collaboration, support, and information sharing on good CSR practices. In June 2015, the society rebranded itself as the Global Compact Network Singapore (GCNS) under the United Nations Global Compact (UNGC) network, with the goals of encouraging companies to adopt sustainability principles related to human and labor rights, environmental conservation, and anti-corruption. GCNS facilitates exchanges, conducts research, and provides training in Singapore to build capacity in areas including sustainability reporting, supply chain management, ISO 26000, measuring and reporting carbon emissions.

The SGX implemented a requirement in June 2011 that listed companies report on their sustainable business practices. The Singapore Environmental Council (SEC) developed a green labeling scheme which endorses environmentally-friendly products, numbering over 3,000 from 27 countries. The Association of Banks in Singapore (ABS) issued guidelines to banks in Singapore in October 2015 encouraging them to adopt sustainable lending practices, including the integration of environmental, social and governance (ESG) principles into their lending and business practices. While voluntary, the move marks the first time Singapore’s financial sector has been asked to play a significant role in sustainable development.

Singapore has not developed a National Action Plan on business and human rights, but supports and promotes responsible business practices and encourages foreign and local enterprises to follow generally accepted CSR principles. The government does not explicitly factor responsible business conduct (RBC) policies into its procurement decisions.

The host government effectively and fairly enforces domestic laws with regard to human rights, labor rights, consumer protection, environmental protections, and other laws/regulations intended to protect individuals from adverse business impacts. The private sector’s impact on migrant workers and their rights, and domestic migrant workers in particular (due to the latter’s exemption from the Employment Act which stipulates the rights of workers), remains an area of advocacy by civil society groups. The government has taken incremental steps to improve the channels of redress and enforcement of workers’ rights; however, key concerns about legislative protections remain unaddressed for domestic migrant workers. The government generally encourages businesses to comply with international standards. However, there are no specific mentions of the host government encouraging adherence to the OECD Due Diligence Guidance, or supply chain due diligence measures.

Companies in Singapore are principally governed by the Companies Act. Key areas of corporate governance covered under the act include separation of ownership from management, fiduciary duties of directors, shareholder remedies, and capital maintenance rules. Limited liability partnerships are governed by the Limited Liability Partnership Act. Certain provisions in other statutes such as the Securities and Futures Act are also relevant to companies. Singapore has a private sector-led Council on Corporate Disclosure and Governance to implement the country’s Code of Corporate Governance. Compliance with the Code is not mandatory but listed companies are required under the Singapore Exchange Listing Rules to disclose their corporate governance practices and give explanations for deviations from the Code in their annual reports. (http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-16 )

There are independent NGOs promoting and monitoring RBC. Those monitoring or advocating around RBC are generally able to do their work freely within most areas of RBC. However, labor unions are tightly controlled and legal rights to strike are granted with restrictions under the Trade Disputes Act.

Singapore has no oil, gas, or mineral resources and is not a member of the Extractive Industries Transparency Initiative (EITI). A small sector processes and rare minerals, and complies with responsible supply chains and conflict mineral principles. Under the new AML/CFT framework introduced in 2014, it is a requirement for Corporate Service Providers to develop and implement internal policies, procedures and controls to comply with Financial Action Task Force (FATF) recommendations on combating of money laundering and terrorism financing.

Singapore actively enforces its strong anti-corruption laws and corruption is not cited as a concern for foreign investors. Transparency International’s 2016 Corruption Perception index ranks Singapore 7th of 176 countries globally, the highest ranking for an Asian country. The Prevention of Corruption Act (PCA), and the Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act provide the legal basis for government action by the Corrupt Practices Investigation Bureau (CPIB), which is the only agency authorized under the PCA to investigate corruption offences and other related offences. These laws cover acts of corruption both within Singapore as well as those committed by Singaporeans abroad. When cases of corruption are uncovered, whether in the public or private sector, the government deals with them firmly, swiftly, and publicly. The anti-corruption laws extend to family members of officials, and to political parties. The CPIB is effective and non-discriminatory, and Singapore is generally perceived to be one of the least corrupt countries in Asia and the world, and corruption is not identified as an obstacle to FDI in Singapore. Singapore is a signatory to the UN Anticorruption Convention, but not the OECD Anti-Bribery Convention.

Resources to Report Corruption

Contact at government agency responsible for combating corruption:
Corrupt Practices Investigation Bureau
2 Lengkok Bahru, Singapore 159047
+65 6270 0141

Singapore’s political environment is stable and there is no history of incidents involving politically motivated damage to foreign investments in Singapore. The ruling People’s Action Party (PAP) has dominated Singapore’s parliamentary government since 1959, and currently controls 83 of the 89 regularly contested parliamentary seats. Singapore opposition parties, which currently hold six regularly contested parliamentary seats and three additional seats reserved to the opposition by the constitution, do not usually espouse views that are radically different from the mainstream of Singapore political opinion.

As of December 2016, Singapore’s labor market totaled 3.67 million workers; this includes about 1.39 million foreigners of which about 85 percent are unskilled or semi-skilled workers. The labor market continues to be tight, with unemployment at 2.2 percent in 2016. Local labor laws allow for relatively free hiring and firing practices. Either party can terminate employment by giving the other party the required notice. The Ministry of Manpower (MOM) must approve employment of foreigners. Since 2011 the Government has introduced policy measures to support productivity increases coupled with reduced dependence on foreign labor. The MOM has started tightening foreign labor approvals, resulting in many businesses in Singapore voicing discontent at not being able to access sufficient labor.

According to a 2016 JP Morgan-Singapore Management University report , Singapore faces shortages of specialized labor skills in the information and communication technology (ICT) industry. It will require a further 15,000 workers, particularly in the areas of cyber security, data analytics and development and network infrastructure in 2017. Lower-level software-engineering and programming workers are also in short supply.

SkillsFuture is a government initiative managed by SkillsFuture Singapore (SSG), a statutory board under the Ministry of Education, designed to provide all Singaporeans with the enhanced opportunities and capacity building. SSG also administers the Singapore Workforce Skills Qualifications (WSQ), a national credential system that trains, develops, assesses and certifies skills and competencies for the workforce.

The government regulates the inflow of foreign workers through the Foreign Worker Levy (FWL) and the Dependency Ratio Ceiling (DRC). The DRC is the maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire, and serves as a quota on the hiring of foreign workers. The DRC varies across sectors. Employers of work permit holders are required to pay a monthly FWL to the government. The FWL varies according to the skills, qualifications and experience of their employees at the time of recruitment . The FWL is set on a sector-by-sector basis and is subject to annual revisions. FWLs have progressively increased for most sectors since 2012.

MOM requires employers to consider Singaporeans before hiring skilled professional foreigners. The Fair Consideration Framework (FCF), implemented in August 2014, affects employers who apply for Employment Passes (EP), the work pass for foreign professionals working in professional, manager and executive (PME) posts. Companies have noted inconsistent and increasingly burdensome documentation requirements and excessive qualification criteria to approve EP applications. Under the rules, firms making new EP applications must first advertise the job vacancy in a new jobs bank administered by Workforce Singapore (WSG) for at least 14 days. The jobs bank will be free for use by companies and job seekers and the job advertisement must be open to all Singaporeans. Employers are encouraged to keep records of their interview process as proof that they have done due diligence in trying to look for a Singaporean worker. If an EP is still needed, the employer will have to make a statutory declaration that a job advertisement with the national jobs bank had been made. Some exceptions have been made for smaller firms with 25 or fewer employees and jobs which pay a fixed monthly salary of USD $8,730 (SGD $12,000) or more will not be subjected to the advertising requirement. Consistent with Singapore’s WTO obligations, intra-corporate transfers (ICT) are allowed for managers, executives, and specialists who had worked for at least one-year in the firm before being posted to Singapore. ICT would still be required to meet all EP criteria, but the requirement for an advertisement in the jobs data bank would be waived. In April 2016, MoM, outlined measures to refine the work pass applications process, looking not only at the qualifications of individuals, but of companies. Companies found not to have a “healthy Singaporean core”; demonstrated commitment to developing a Singaporean core, and not found to be “relevant” to Singapore’s economy and society, will be labeled “triple weak” and put on a watch list. Companies unable to demonstrate progress may have work pass privileges suspended. As of March 2017, approximately 250 companies have been put on the watch list.

The Employment Act covers all employees under a contract of service, and under the act, employees who have served the company for at least two years are eligible for retrenchment benefits, and the amount of compensation depends on the contract of service or what is agreed collectively. Employers have to abide by notice periods in the employment contract before termination, and stipulated minimum guidelines in the absence of a notice period previously agreed upon, or provide salary in lieu of notice. Dismissal on grounds of wrongful conduct by the employee is differentiated from retrenchments in the labor laws, and is exempted from the above requirements. Employers must notify MOM of retrenchments within five working days after they notify the affected employees to enable the relevant agencies to help affected employees find alternative employment and/or identify relevant training to enhance employability. Singapore does not provide unemployment benefits, but provides training and job matching services to retrenched workers.

Labor laws are not waived in order to attract or retain investment in Singapore. There are no additional or different labor law provisions in free trade zones.

Collective bargaining is a normal part of labor-management relations in all sectors. About 28.9 percent of the workforce is unionized. Almost all unions are affiliated with the National Trades Union Congress (NTUC), an umbrella organization with close relationship with the PAP ruling party and the government. The current NTUC Secretary General is also a Minister in the Prime Minister’s Office. Given that nearly all unions are NTUC affiliates, the NTUC has almost exclusive authority to exercise collective bargaining power on behalf of employees. Union members may not reject collective agreements negotiated between their union representatives and an employer. Although transfers and layoffs are excluded from the scope of collective bargaining, employers consult with unions on both problems, and the Tripartite Panel on Retrenched Workers issues guidelines calling for early notification to unions of layoffs. Data on coverage of collective bargaining agreements is not publicly available. The Industrial Relations Act (IRA) regulates collective bargaining. The Industrial Arbitration Courts must certify any collective bargaining agreement before it is deemed in effect and can deny certification on public interest grounds. Additionally, the IRA restricts the scope of issues over which workers may bargain, excluding bargaining on hiring, transfer, promotion, dismissal, or reinstatement of workers.

Most labor disagreements are resolved through conciliation and mediation by MOM. From April 2017, the Tripartite Alliance for Dispute Management under MOM will provide advisory and mediation services, including mediation for labor disputes. Salary-related disputes which are not resolved by mediation are covered by the newly formed Employment Claims Tribunals under the State Courts. Disputing parties may also submit their case to the tripartite Industrial Arbitration Court, composed of employee and management representatives and chaired by a judge. In some situations the law provides for compulsory arbitration. The court must certify collective agreements before they go into effect. The court may refuse certification at its discretion on the ground of public interest.

The legal framework in Singapore provides for some restrictions in the registration of trade unions, labor union autonomy and administration, the right to strike, who may serve as union officers or employees, and collective bargaining. Under the Trade Union Act (TUA), every trade union must register with the Registrar of Trade Unions, which has broad discretion to grant, deny, or cancel union registration. The TUA limits the objectives for which unions can spend their funds, including for contributions to a political party or for political purposes and allows the Registrar to inspect accounts and funds “at any reasonable time”. Legal rights to strike are granted with restrictions under the Trade Disputes Act. Strikes cannot be conducted for any reason apart from a dispute in the trade or industry in which the strikers are employed, and it is illegal to conduct a strike if it is “designed or calculated to coerce the Government either directly or by inflicting hardship on the community.” Workers in “essential services” are required to give 14 days’ notice to an employer before conducting a strike. Although workers, other than those employed in the three essential services of water, gas and electricity, may strike, no workers did so since 1986 with the exception of a strike by bus drivers in 2012. The TUA bars non-citizens from serving as union officers or employees, unless prior written approval is received from the Minister for Manpower.

Labor protections are governed by the Employment Act, which prohibits all forms of forced or compulsory labor and the Prevention of Human Trafficking Act (PHTA), which strengthens labor trafficking victim protection. Labor laws set the standard legal workweek at 44 hours, with one rest day each week, and establish a framework for workplaces to comply with occupational safety and health standards, with regular inspections designed to enforce the standards. MOM effectively enforces laws and regulations establishing working conditions and comprehensive occupational safety and health (OSH) laws, and implements enforcement procedures and promoted educational and training programs to reduce the frequency of job-related accidents. (see the U.S. State Department Human Rights Report: http://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/#wrapper).

Singapore has no across the board minimum wage law, although there are some exceptions in certain low skill industries. Generally, the government follows a policy of allowing free market forces to determine wage levels. The National Wage Council (NWC), a tripartite body comprising a Chairman and representatives from the Government, employers and unions, recommends non-binding wage adjustments on an annual basis. The NWC recommendations apply to all employees in both domestic and foreign firms, and across the private and public sectors. While the NWC wage guidelines are not mandatory, they are published under the Employment Act and form the basis of wage negotiations between unions and management. The NWC recommendations apply to all employees in both domestic and foreign law firms, and across the public and private sectors. The level of implementation is generally higher among unionized companies compared to non-unionized companies.

MOM is responsible for combating labor trafficking and improving working conditions for workers, and generally enforces anti-trafficking legislation, although some workers in low-wage and unskilled sectors are vulnerable to labor exploitation and abuse. PHTA sets out harsh penalties (including up to nine strokes of the cane and 15 years’ imprisonment) for those found guilty of trafficking, including forced labor, or abetting such activities. The government developed a mechanism for referral of forced labor, among other trafficking-in-persons activities, to the interagency taskforce, co-chaired by the Ministry of Home Affairs and the Ministry of Manpower. Some observers note that the country’s employer sponsorship system made legal migrant workers vulnerable to forced labor, because they cannot change employers without the consent of the current employer. MOM effectively enforces laws and regulations pertaining to child labor. Penalties for employers that violated child labor laws were subject to fines and/or imprisonment, depending on the violation. Government officials assert that child labor is not a significant issue. The incidence of children in formal employment is low, and almost no abuses are reported.

A new Employment Claims Tribunal will be established from April 2017 to deal with salary-related disputes. The Tribunal will hear: (i) statutory salary-related disputes from employees covered under the Employment Act, the Retirement and Re-Employment Act and the Child Development Co-Savings Act; and (ii) contractual salary-related claims from all employees except domestic workers, public servants and seafarers. All parties are required to go through mediation with the Tripartite Alliance for Dispute Management (TADM) before their claims can be heard. There will be a limit of SGD $30,000 on claims for cases with union involvement, and SGD $20,000 for all other claims. Prior to April 2017, TADM arbitration was available only to those employees covered under the Employment Act who earned less USD $3,180 per month for cases of salary arrears, breach of individual employment contracts and payment of retrenchment benefits.

Under the 1966 Investment Guarantee Agreement with Singapore, the Overseas Private Investment Corporation (OPIC) offers insurance to U.S. investors in Singapore against currency inconvertibility, expropriation, and losses arising from war. Singapore became a member of the Multilateral Investment Guarantee Agency (MIGA) in 1998. OPIC does not currently have any ongoing projects in Singapore.

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) 2015 $291,247 2015 $292,739 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) 2015 $173,641 2015 $228,666 BEA data available at http://bea.gov/international/direct_investment_
Host Country’s FDI in the United States ($M USD, stock positions) 2015 $11,153 2015 $ 19,423 BEA data available at http://bea.gov/international/direct_investment_
Total Inbound Stock of FDI as % Host GDP 2015 3.8% 2015 6.7% N/A

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 $869,572 100% Total Outward 474,854 100%
United States $169,187 19.5% China $86,402 18.2%
Japan $64,104 7.4% Cayman Islands $45,424 9.6%
British Virgin Islands $61,502 7.1% Hong Kong $37,634 7.9%
Cayman Islands $57,966 6.7% Indonesia $32,428 6.8%
United Kingdom $49,433 5.7% Malaysia $29,037 6.1%
“0” reflects amounts rounded to +/- USD 500,000.

Source: IMF Coordinated Direct Investment Survey (Inward) and Singapore Department of Statistics (Outward)

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries $987,596 100% All Countries $493,555 100% All Countries $494,041 100%
United States $271,041 27.4% United States $121,150 24.5% United States $149,891 30.3%
Mainland China $92,409 9.4% Mainland China $65,850 13.3% India $29,308 5.9%
India $60,342 6.1% India $31,033 6.3% Mainland China $26,559 5.4%
Republic of Korea $42,294 4.3% Japan $28,623 5.8% Republic of Korea $20,088 4.1%
United Kingdom $34,088 3.5% Republic of Korea $22,205 4.5% United Kingdom $18,240 3.7%

Nashwa Elgadi
Economic Officer
U.S. Embassy Singapore; 27 Napier Road, Singapore 258508

2017 Investment Climate Statements: Singapore
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