MARKET RESEARCH COUNTRY REPORT

SINGAPORE

CONTENTS

Main Industry SectorsEconomic OverviewForeign Direct Investment [FDI]FDI Government MeasuresCountry Strong PointsCountry Weak PointsForeign Trade Overview

MAIN INDUSTRY SECTORS

Singapore's economy is highly industrialized.

Singapore’s biggest sector is the manufacturing sector, followed by the wholesale and retail sector,

business services, transport and communication and financial services.

The electronics and petrochemical industries are dominant.

The services sector contributes almost three quarters of the GDP and employs three quarters of the

active population.

The industrial sector represents a quarter of the GDP.

The primary sector is almost nonexistent (except for the cultivation of orchids, vegetables and fish for

aquariums). Singapore does not have any mineral resources.

Singapore is a regional trading hub.

The Port of Singapore is amongst the world's biggest and is the second traffic center for

container transshipment, behind Hong Kong. 

ECONOMIC OVERVIEW

Singapore's economy was particularly affected by the international financial crisis,

because of its very extreme financialization, and its large degree of openness, and thus

its dependence on international trade. While GDP growth was above 7.5% from 2004 to

2007, it dropped sharply in 2009 (-1.3%).

Boosted by the regional economic recovery which fuelled a sharp increase in exports, as

well as by the resumed vigor of domestic demand, Singapore's growth reached an

exceptional degree of 15% of the GDP in 2010.

Singaporean growth should probably slow down in 2011 and reach a more sustainable

level. 

The strong recovery context allowed the government to put an end to the exceptional tax

measures adopted in order to combat the crisis.

The present priorities are to channel this strong growth, contain the hike in real estate

prices and fight against inflation pressures.

Mid-term objectives of promoting innovation and research and productivity gains are

again pursued.

ECONOMIC OVERVIEW

IN order to maintain its competitive position despite the growth of salaries, the

government seeks especially to promote activities with high added value (such as

biotechnology, R&D and pharmaceutical products) in the manufacturing and service

sectors.

The level of per capita wealth in Singapore is amongst the highest in the region.

After a long period of full employment, unemployment has appeared, especially due to

structural economic chances (outsourcing of low-skilled work) and worsened during the

crisis.

Singapore’s economics decreased in 2010 and now remains at around 2% of the active

population.

FOREIGN DIRECT INVESTMENT [FDI]

Singapore has based its economic development on a proactive strategy to attract FDI and trade

openness.

According to the World Bank, Singapore is the country where it is easiest to do business.

Favorable lending to foreign investors, simple regulatory system, tax incentives, high-quality

industrial real estate park, political stability and absence of corruption make Singapore an attractive

destination for investment.

According to the UNCTAD, Singapore leads the list of the most attractive countries in the world,

together with the United States, but the performance of its City is comparatively low in terms of

receiving FDI. United States is by far the biggest investor, followed by Japan, Europe, China and India.

FDI flows have decreased and are expected to recover slowly in the coming years. 

FDI GOVERNMENT MEASURES

Singapore is open to foreign investment and offers tax incentives to companies after they register with

Economic Development Board.

Singapore continues to maintain monopolies in certain sectors (financial services, professional

services, media and telecommunications).

Government linked corporations play a dominant role in the domestic economy and to a large extent,

on investment. 

COUNTRY STRONG POINTS

Singapore is the easiest country in which to do business

Singapore has excellent telecommunication, financial,and transport infrastructures, and its strategic

location at the crossroads of maritime routes and proximity to the big markets is an advantage.

Singapore offers tax concessions and easy loan conditions as part of investment incentives.

COUNTRY WEAK POINTS

The lack of transparency in administrative incentives and the non-internationalization of the

Singaporean dollar are investment hindrances.

Despite being a free port, tariff protection for industrial firms is not provided.

The dominant role of semi-public companies could hinder investments in some sectors.

FOREIGN TRADE OVERVIEW

A real warehouse and crossroads of international trade, Singapore is highly dependent on

external trade, which represents more than 400% of the GDP (2007-2009).

The strategy adopted by the country is to promote export while being careful to minimize

barriers to imports.

Singapore signed the Asian Free Trade Area agreements (AFTA in the ASEAN context) and

several bilateral agreements.

Singapore imports machinery and equipment, mineral fuels, chemical products, food

commodities and consumption goods from Malaysia, United States, China, Japan, South

Korea, Indonesia and Saudi Arabia.

Singapore exports machinery and equipment (electronic), consumption goods,

pharmaceutical products and mineral fuels to Malaysia, Indonesia, Hong Kong, China, the

United States, Japan and Australia.

Singapore shows a high trade surplus, a trend which should continue in the coming

years.

RELATED SINGAPOREREPORTS

Market Opportunities of products and Services in Singapore.

Export and investment sector opportunities in Singapore.

Overview of Trade Regulations, Customs and Standards Singapore.

Singaporean Investment guide for beginners.

Business and Project Financing in Singapore.

Business Travel Advisory in Singapore.

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