Doing Business In Singapore
- What is the current business climate in your jurisdiction including major political, economic and/or legal activities on the horizon in your country that could have a big impact on businesses?
Post COVID-19, the Singapore economy continues to be resilient, with a projected GDP growth of 0.5 to 1.5 percent in 2023, according to MTI Narrows Singapore's GDP Growth Forecast. This is in spite of the economic spillovers arising from geopolitical tensions that weigh on global trade. To help businesses transition to a post-pandemic world and to buffer against elevated inflation and heightened uncertainties, the Singapore Government has implemented a variety of forward-looking policy measures and schemes in its commitment to creating a pro-business environment. Apart from maintaining an overall investor-friendly tax regime, certain economic and manpower policies have been put in place, which include SGD 4 billion to support business growth and upskilling, and SGD 200 million to support businesses in building digital capabilities; grants are also available to support training and to fund research and innovation alongside tax incentives for qualifying expansionary economic activities ( learn more). Of particular significance is Singapore's focus on sustainability and the launch of the Singapore Green Plan 2030. Unveiled in 2021, it is a whole-of-nation movement to advance Singapore's sustainable development and to encourage businesses to incorporate de-carbonization and climate risks into their work plans. The start of significant rises in carbon taxes over the next few yearswill also likely have an impact on businesses as Singapore aims to achieve net zero emissions by 2050.
- From what countries do you see the most inbound investment? What about outbound?
Outbound:Mainland China was Singapore's top investment economy as of the end of 2021, followed by the Netherlands, the United Kingdom, Hong Kong, and India (Singapore Department of Statistics).
- In what industries/sectors are you seeing the most opportunity for foreign investment?
While finance and insurance, wholesale and retail trade, and manufacturing were the top three industries for foreign direct investment in Singapore (Singapore Department of Statistics), opportunities in the technology, FinTech, and innovation sectors are also noteworthy—in addition to strategic initiatives aimed at transforming Singapore's digital economy, the Singapore government is taking a sandbox approach to allow innovators, universities and companies to work together and develop and trial new products and ideas for the region and beyond.
- What advantages and pitfalls should others know about doing business in your country?
Progressively higher indirect taxes and levies imposed on luxury goods consumers over the next few years will factor among global talents alongside the high cost of living and persistent inflation. Nevertheless, the advantages of having a safe and stable environment to bring their business and family to Singapore may mitigate these tax increases. Such advantages include:
- political stability;
- low crime rate;
- business-friendly regulatory environment;
- transparent tax regime;
- excellent infrastructure and connectivity;
- robust IP protection;
- strong trade links to ASEAN and the Greater China Region (member of the Regional Comprehensive Economic Partnership (RCEP) with the other ASEAN members, plus Australia, China, India, Japan, South Korea, and New Zealand; and
- strong government commitment to climate action and sustainable development in sync with international efforts and the global sustainability agenda.
Further business efficiencies are anticipated as the local AI startup ecosystem will also see greater support following the launch of the Artificial Intelligence Government Cloud Cluster (AGCC) in 2023. The AGCC is a platform designed to accelerate AI adoption in Singapore's public sector and the development of modern digital applications.
- What is one cultural fact or custom about your country that others should know when doing business there?
Singapore is an ethnically diverse, multicultural society where English is widely used as the common language of communication. The business culture is based on a strong work ethic with an emphasis on mutual trust and respect as being the foundation of professional relationships.
Originally published Dec 17, 2023.
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