The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

Executive Summary

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

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

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

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

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

Political Environment

For background information on the political and economic environment of the country, please click on the link to the U.S. Department of State Countries & Areas website.