U.S. businesses looking to boost their bottom line by making new export sales are increasingly looking to Singapore as a place to do business. A gateway to Southeast Asia with a business-friendly environment, Singapore offers excellent opportunities for U.S. firms, including small and medium-sized companies.
As the United States’ largest trading partner in Southeast Asia, Singapore has a proven track record as a welcoming center for business. The United States is the leading source of foreign direct investment (FDI) for Singapore, with $309.4 billion in FDI stock in 2022. Singapore is also a leading investor in the United States, with Singapore FDI stock in the United States was $36.9 billion in 2022.
Singapore is an important partner of the United States and has enjoyed a bilateral Free Trade Agreement (FTA) with Singapore since 2004. This was the first U.S. FTA signed in Asia. In 2022, the city-state was the United States’ 12th largest export market, importing $80.5 billion worth of goods and services.
Singapore has one of the highest levels of GDP per capita in Asia (US$83,000). A small city-state roughly the physical size of New York City, Singapore’s wealthy population is approximately 6 million people. Exporters will find proven market opportunities for a wide range of products and services, including consumer goods, high-tech business solutions and services, machinery, aerospace, medical instruments, environmental technologies, and sustainable smart city solutions. Electronics remains the most important manufacturing sector, followed by chemicals and biomedical sciences. The manufacturing and services sectors remain the two main pillars of Singapore’s high-value-added economy. Singapore is the leading business and financial services hub in Southeast Asia and in 2022 was ranked as the world’s largest transshipment port.
In 2022, Singapore’s real GDP grew by 3.6%, and economists predict Singapore’s economic growth in 2023 will be approximately 1.4% due to the global economic slowdown and inflationary pressures. This is exacerbated by the continuing Russian war in Ukraine. Singapore has set aside $2.8 billion to attract multinational investments. The aim is to expand and secure investments in growth sectors such as banking and finance, global trading, and key manufacturing sectors. Additionally, this fund hopes to strengthen the country’s social compact, help local businesses transform and innovate, improve productivity, and equip workers with skills for the future economy.
U.S. companies should consider exporting to Singapore for the following reasons:
- Singapore is the gateway to Southeast Asia
- Major distribution, logistics, and financial hub
- Transparency and lack of corruption
- Business-friendly laws and regulations
- Strong intellectual property protection
- English speaking population