Singapore is a very attractive location for foreign direct investment – Part Two

This is part two of a two-part article which explores the reasons why Singapore is a very attractive investment destination for foreign investors looking to spread their eggs in more than one basket. Continued from Part One (please click here if you wish to access Part One of this article) …

Singapore has several free trade zones that are open for local enterprises as well as foreign companies to take advantage of. These opportunities are leveraged for storage, repacking and export activities.  It also has free zones and industrial parks which are very attractive to foreign investors.

Singapore is very appealing for European investors who can obtain EORI numbers and start trading with companies in the European Union. However, before starting a business as an overseas entrepreneur, it is important to understand the legislation on investment in Singapore.

Singapore retains its competitive edge for property investment despite property investors having been directly impacted by the different rounds of cooling measures implemented by the government. It is widely recognized that these measures have been put in place to prevent a property bubble from forming. Although initially there was some impact but now these measures are widely seen as a plus to help ensure their investment property will continue to hold its value in the long run in Singapore.

The best starting point for any foreigner investor interested in setting up a business in Singapore is to reach out to the Singapore Trade Development Board which promotes FDI and the Singapore Economic Development Board (EDB) which provides incentives to foreign investors setting up operations/businesses in Singapore. 

The EDB, a government agency under the Singapore Ministry of Trade and Industry, is responsible for strategies that enhance Singapore’s position as a global centre for business, innovation, and talent. EDB supports investment promotion and industry development, and works with international businesses, both foreign and local, by providing information, connection to partners and access to Singapore government incentives for their investments. To get more information about the EDB and contact details of its offices across the world, visit their website at www.edb.gov.sg

In the EDB’s “EDB Year 2020 In Review” report the EDB explained, “According to the United Nations Conference on Trade and Development (UNCTAD), global foreign direct investment (FDI) flows fell 49% in the first half of 2020. It expects a 30% to 40% decline in FDI flows for the full year. However, many companies proceeded with their investment plans in Singapore because of our strong fundamentals, including our value proposition as a trusted and connected place to do business; the economic potential of Southeast Asia and Asia; and EDB’s long-standing engagement of the companies. With the pace of digitalisation accelerated by COVID-19, digital capabilities were also built across sectors to facilitate the development of new digital technologies and advanced manufacturing adoption. In addition, EDB made progress in promoting innovation and the creation of new businesses and products, and the development of new areas of opportunity such as Agrifood and Mobility…EDB will continue to strengthen our fundamentals that have been driving business interest in Singapore. These include opportunities from: Asia and Southeast Asia; digitalistion and the digital economy; innovation; the deep skills of our workforce; the ecosystem of suppliers locally and in the region; our connectivity and open trading posture; and our business-friendly and rules-based environment.”

A recent incentive from EDB is Tech.Pass which is an expansion of the [email protected] programme that was launched by EDB and ESG in 2019. On 12 November 2020, EDB announced plans to launch Tech.Pass, a targeted programme to attract founders, leaders and technical experts with experience in established or fast-growing tech companies, so as to contribute to the development of Singapore’s tech ecosystem.

Tech.Pass allows pass holders flexibility in the participation of activities such as starting and operating a business, being an investor, employee, consultant or director in one or more Singapore-based companies, mentoring start-ups and lecturing at local universities. 

Tech.Pass has been open for application since January 2021, with 500 places available upon launch. The pass will be valid for two years in the first instance, with a one-time renewal for a subsequent two years. The consideration for renewal at the end of two years will depend on meeting the renewal criteria.

It is expected that Singapore will endeavour to maintain its competitive edge for foreign direct investment and continue to shift the dial from low cost to skilled work-force investment destination. 

If you are keen to find out more about the framework in Singapore for setting up a representative office of your existing business, setting up a new business or investing in one or more businesses in Singapore, please contact our experienced senior lawyers at AT Law Practice LLP for a short complimentary call or meeting – click here.

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