FDI opportunity in Singapore

FDI opportunity in Singapore

Outside direct speculation FDI opportunity in Singapore is a speculation made by an organization or a person of a nation in another nation through setting up either a Subsidiary or Associate organization or a Joint wander or by methods for a Merger, securing a viable control or impact over the foundation. Foreign direct investments contribute to any country’s economy. They help in the growth and positive increase in the GDP too.

The Organization of Economic Cooperation and Development OECD have set a bar of minimum 10% stake in the overseas company to ensuring controlling interests in the venture. Well, the important is to gain controlling interests, thus if it is ensured even by less than 10% too qualify for FDI.

The World Investment Report 2016 of UNCTAD [United Nations Conference on Trade and Development] projected Singapore being the 7th largest receiver of FDI in the world and 3rd largest among East and Southeast Asian countries. Singapore experienced a downtrend in FDI during the last two years.

FDI in Singapore inflows went down to 50 billion in 2016 from fell from US 65 billion in 2015. Of course, the nose-diving of its FDI opportunity in Singapore is rather identical to the overall declining trend worldwide. In this period, the global flows of FDI shrunk 13% to US$1.52 billion. UNCTAD reports that FDI flows to developing Asia and Oceania fell 22 percent in 2016. It did fall in Europe by 29%, Latin America, and the Caribbean nations by 19% and Africa by 5%.

However, the leading financial institutions have forecasted healthy FDI flows around the in world. It is expected to rise 10% in 2017 in the globe and Singapore to expecting a rise in the flow.

The top 10 receivers of FDI during last three years [In billion US$]

The top 10 receivers of FDI during last three years [In billion US$]

Countries 2014 2015 2016
USA 107 380 35
UK 52 40 179
PR China 129 136 139
Hong Kong 114 175 92
Singapore 68 65 50
Brazil 73 65 50
France 15 43 46
Netherland 52 73 46
Australia 40 22 44
India 35 44 42

There are some criteria to attract FDIs into a country such as; Ease of Business, Skilled and disciplined workforce human resources, Quality infrastructure and logistic support, Smooth and speedy communication system, Stable government and economy, Good law & order situation, Protection of Investors, Business friendly laws and regulations etc. By any standard Singapore satisfies all the above criteria.

Singapore is the easiest country in which to do business, according to the World Bank, 2016 report. The country offers tax concessions and easy loan conditions as part of its investment incentives.

World Bank ranked Singapore just after New Zealand among 190 nations in the ease of doing business. Singapore improved its rankings in four areas that the report takes into consideration.

Singapore went up 1 rank in Starting Business, 14 ranks in Dealing with Construction permits, 3 ranks with registering Property and 1 up in Paying taxes. It ranked second in the Global Talent Competitiveness Index 2017, measuring the ability to enabling, attracting and retaining staffs.

The main investors are the U.S., the Netherlands, the United Kingdom, and Japan.

Key Sectors of Singapore attracting FDI In %
Financial & Insurance Services 49.8
Wholesale & Retailing 18.4
Manufacturing 13.5
Logistics & support services 8.5
Transport 3.1
Real estate 2.8

Data source EDB, Singapore 2015

Status of Protection of Foreign Investment in Singapore

Singapore has Bilateral Investment Treaties BITs with 46 major countries of the world. These agreements drafted specifically to protect nationals or companies of either country mutually against odds like, war and risks of expropriation and nationalization.

Singapore has no laws that force foreign investors to transfer ownership to local interests and as such no disputes are So far no one lodged any claim with UNCTAD of any case relating to nationalization by state or forcing transferring of ownership to a citizen of Singapore.

Comparison of countries in regard to protecting investors in Singapore

Indices for Comparison Singapore USA Germany Asia-Pacific
Transparency of Business transactions 10 7 7 5
Responsibility of management staffs 9 9 5 5
Empowering of Shareholders 8 4 8 6
Protecting Investors 8.3 6.5 6 5.2

Singapore has prescribed some guidelines to investing. It guaranteed freedom of enterprises and allowed acquisition of any holdings. While, intending investor is required to declare to either, Monetary Authority of Singapore MAS or Accounting and Corporate Regulatory Authority ACRA whether the name of the proposed venture bearing, the names or patents or trademarks of a company already in operation in the country.

Certain restrictions to ownership of foreigners imposed as far as sectors like, telecommunications, broadcasting, domestic news media, Insurance & Banking are concerned. It is called the best fdi opportunity in Singapore comparatively within Asia.


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