The analysis of the investment

Doneactivity
by: Sacultanu Andreiin the SINGAPORE
Dumbrava Tatiana
Juncu Eugeniu
EMREI 144
Lecturer: Siscan Zorina
Objectives:
- ANALYSIS OF FDI IN SINGAPORE
-BUSINESS CLIMATE
-BUSINESS ENVIRONMENT
- SWOT ANALYSIS
- PESTLE ANALYSIS OF SINGAPORE
-GEOGRAPHICAL DISTRIBUTION OF FDI
-WHY INVESTORS CHOOSE TO INVEST IN
SINGAPORE ?
-INVESTMENT POLICY
-CONCLUSION
Economic characteristics
Singapore's economy has been ranked as the most open in the world,
7th least corrupt,most pro-business, with low tax rates (14.2% of
Gross Domestic Product, GDP)and has thethird highest per-
capitaGDP in the world in terms of Purchasing Power Parity (PPP).
As of July 2016, the unemployment rate in the Singapore was the
lowest in the World at 2.1%
The principal industries are Accounting Services, Biomedical
Sciences , Chemicals / Oil & Gas, Civil / Public Service,
Consumer Business, Electronics, Engineering, Financial
Services, Healthcare Services
GDP:
US$307.9 billion (nominal; 2015 est.)
Int$470.551 billion (PPP; 2015 est.)
GDP per capita:
US$53,604 (nominal, 2015 est.)
Int$85,127 (PPP, 2015 est.)
Business Climate in Singapore
Ranked 6th worldwide and top in Asia as one of the best place to do
business
Highly educated and skilled work force
Intellectual property Right Protection
Free Trade Agreements (FTAs) with key economies such as US,
Australia, Japan, New Zeeland, members of the European Free
TradeAssotiation Switzerland, Iceland, Lichtenstein and Norway)
2nd in presonal safety among worlds top 50 countries
Offer the best quality of life in Asia
Takes only 8 days to start business compared to global average of 51
days
Lowest corporate tax rate in Asia
Ranked 3rd by WorldBank in terms of ease of doing business
Business Environment
Location:
First of all, Its port is one of the main advantages of the country is location.
The country is located in the heart of Southeast Asia. Furthermore, this fact
gives an opportunity for the business to have an access to a market of 2.8
billion people within a few hour flights. Also, the country has the status of a
premier International Maritime Centre thanks to its port. (Why choose
Singapore.) It is the second biggest container port in the world (World Shipping
Council 2012). Besides, the port is one of the most occupied ports in the world
today. Not depending on time, there are approximately 1000 vessels in the
Singaporean port. Besides, the port never sleeps and every 2-3 minutes there
is a ship which is either arriving or departing from the port. Moreover, one
more big advantage of the port for the business is that it is connected with 600
ports all over the world. (Maritime Singapore.) The presence of a port in a
country gives international companies an opportunity to export and import
their products. It gives the opportunities of expansion to trade not only to Asia
but all over the world. In addition, the operation processes of the port are fast
and very-well organised. It provides the companies with the stability and
confidence that the services at the Singaporean port will be submitted on time.
 Tax system:the country has a very good tax-system for the
business organisations. For example, the personal tax rate
for the first S$20 000 (12 532 euro) is 0%, for the next
S$10 000 (6 266 euro) it is 2%, and for the next S$10 000
it is 3,5%. The personal tax rate for the following S$40 000
(25 065 euro) is 7%, for the following S$40 000 11,5% and
for the next limit it is 15% and the following one 17%.
Furthermore, the corporate tax rate system also gives an
advantage for the companies for the establishing their
business. The tax rate on corporate profit is 8,5% when
the sum is up to 300 000S$ (187 987 euro) and above this
sum, the tax rate is 17%. An additional advantage for the
companies in Singapore is that the tax rate on capital
gains accrued by the company is 0%. Moreover, the tax
rate on dividends, both received and distributed, is 0%.
The tax rate on income, which was earned abroad and not
brought to Singapore, is 0 % (both for the companies and
individuals). Furthermore, tax rate on income which was
gained abroad and brought to Singapore varies from 0 to
17%. (Singapore Income Tax System; Currencies Centre.)
 Government:
According to the research made by one Singaporean
consulting company, the government in Singapore affects
the business environment in a positive way. The
government decides priorities and sets regulations using a
rational, probusiness approach. Moreover, the government
helps Singapore to become one of the most industrialised
nations in the world. As a result, the country has the best
political stability in Asia. Furthermore, according to the
research made by World Bank, the country has the easiest
conditions of doing business. (Why Chose Singapore.) One
more reason to name the government system of Singapore
as an advantage for the Finnish companies is the
corruption level. According to the results received by
Transparency International organization, Singapore is on
the fifth place on the list of the least corrupted countries in
the world
 Economy:
According to the statistics received from the Central
Intelligence Agency, the country has one of the
lowest unemployment rates in the world. The
unemployment rate is 2% and the country has the
14th smallest unemployment rate in the world.
Besides,according to the countrys GDP per capita it
is the 6th biggest in the world. Singapore is in the
third place on the list of the richest countries
according to its GDP per capita. Besides, Singapore
has a large current account surplus, balanced fiscal
budget, high savings rates and zero foreign dept.
 The high standards of living give people, who
are working in the country, a chance to enjoy
their stay there. Furthermore, economic
environment and political stability attract
foreign companies to open their businesses in
Singapore. The low tax rate system and
strategic location provide additional advantages
for the companies in Singaporean business
environment. Hence to many advantages in its
business environment, Singapore has the first
place on the list of easiness of doing business.
 Singapores
Direct
Investment
Abroad as at end 2014,
$620
an from
increase of 15.6 per cent
billion
The stock of direct investment abroad
2013.
by the corporate sector in Singapore
Stock as at Year By Component 2014
amounted
End to
Direct Equity
Direct
Equity
Investment
Investment makes up
620 $552.8
.0 bil 89% of total
15.6%
Total direct
536
Direct investment
.3
493 8.8% Investmen abroad
.0 t Abroad
447 10.3%
425 .0 $620 bil Net Lending to
.7 5.0% Overseas
15.0%
Affiliates

201 201 201 2013 201

$67.2 bil
0 1 2 4
 Top 10 Destinations
2014
12
0 110
10
.1
0

8
0 59
6
0 .0 50 46 42 41
S$bil

.2 .4 39 38
4 .9 .6 .4
0 .2 25
19
2 .5
0 .4
0
Chin Cayma Hong Kong Indonesia Australia United Malaysia British Virgin India
a n Kingdom Luxembourg Islands
Islands

By Activity Abroad (in

S$bil)

40 40 40 40 40
0 Financial & 0 Manufactu 0 0 Real Estate 0
Wholesale & Informatio
30 Insurance 30 ring 30 Retail 30 Activities 30 n&
0 0 0 Trade 0 0 Communicat
20 20 20 20 20 ions
0 0 0 0 0
10 10 10 10 10
41. 44.
0 0 0 0 6 1 0 22. 25.
254. 316. 104. 112. 46. 51. 2 5
0 7 0 0 5 9 0 7 0 0 0
201 201 201 201 201 201 201 201 201
3 4 3 4 3 4 3 4 3
 Foreign Direct
Investment In
Singapore
The stock of foreign direct investment in
Singapores corporate sector amounted to

$1,255.5 billion as at end 2015,

an 1,25 Direct
increase of 12.8 % from 2014.
5.5 Equity
1,11 Investment
3.3
Stock as at Year End (in S$bil) 12.8% $1,151.8
By Component
22.7% bil
2015 907
.1
810 Total
.1 12.0%
702 Foreign
.6 15.3% Direct
5.6%
Investment
Net Lending
2011 2012 2013 2014 2015
$1,255.5 bil from Foreign
Direct Investors
$103.8 bil
 Top 10 Sources
2015

25 243
0 .3
20
0

15
0
S$bil

114 106
.2 98 93
10 .3 .7
0 .2
60
51 48 48 48
5 .2
0 .4 .8 .3 .0
0
United Japan British Virgin Cayma Netherland United Bermud Luxembourg Hong Kong Switzerland
States Islands n s Kingdom a
By Activity in Singapore (in Islands
S$Financial
bil) & Wholesale & Retail Manufactu Profesionall/Administr Transport &
Insurance Trade ring ative Storage

60 60
60 60 0 60 0
0 0 0
50 50
50 50 0 50 0
0 0 0
40 40
40 40 0 40 0
0 561. 625. 0 0 77.
198. 231. 30 3 30 38. 39.
1 9
30 30 6 7 0 30 0 0 9
0 201 201 0 201 201 0 201 201
20 20
20 4 5 20 4 5 0 20 4 5 0
Why Is Singapore Attractive for Foreign Investors?

Singapore is rated #1 in the world by World Bank for ease of doing

business
Singapore is ranked the third wealthiest nation in the world by
Forbes magazine.
Singapore has been ranked as the third most globalized economy
among 60 of the worlds largest economies in the recently released
Ernst and Young 2011 Globalization Index
Singapore is rated #1 as the most politically stable country in Asia
Singapore is rated #1as the best labor force in the world
Singapore is rated #1 in Asia for quality of life
Corporate tax rates are about 8.5% up to $300K profits and a flat
17% above that
There areno dividend or capital gains taxes in Singapore
There is no estate/death/inheritancetax in Singapore
Personal tax rates start at 0% and max out at 20% above $320K
SWOT ANALYSIS
Strenght
Manufacturing constitued 26% of Singapores GDP in 2005.
The manufactoring industry is well-diversified with
significant electronics, petroleum refining, chemicals,
mechanical engineering and biomedical sciences
manufacturing sectors.
Singapore has been rated as the most business-friendly
economy in the world, with thousands of foreign expatries
working in multi-national corporations. As of 2009,
Singapore has 16 bilateral and multilateral trade agrements
with 24 trading partners
Singapore is a popular travel destination, making tourism one
of its largest industries. About 10.2 million tourists visited
Singapore in 2015
SWOT ANALYSIS
Weakness
The population of Singapore as of 2015 was
4.99 million, of whom 3.73 million were
Singaporean citizens
Singapore iseffectively amulti-lingual nation.
The official languages are English, Malay,
Chinese(Mandarin) and Tamil
Total land are of only 704 km2
SWOT ANALYSIS
Oppurtunity
Solving land disputes with Malaysia and
Indonesia can help increase land
The rising technology market in South
America is oppurtunity for Singapore
Russia is introducing a new brand of crude oil
forAsia. It can be very profitable fot Itif it
can secure transportation and shipping
contract due its location
SWOT ANALYSIS
Threat
About half of Singapores water comes from
rain collectd in reservoirs catchment areas
while the rest comes from Malaysia. Global
warming can be very hazardous for It.
Rising sea level means many islands will
perish or lest useless and decrease land
resources.
The financial crisis of USA and Europe, if it is
not taken care of sooner than the countrys
export oriented economy will suffer heavily
PESTLE ANALYSIS OF SINGAPORE

POLITICAL FACTORS
The political risk in Singapore is quite low. In fact, the Political
And Economic Risk Consultancy (PERC) states that the country
enjoys the lowest political risk in the continent. It is a
democratic country. The people elect representatives to lead
the nation. Since its independence, they cherished relative
political stability. Today, the stability has translated to peace
and a better standard of living. Moreover, It has transformed
into improved business opportunities for Singapore.
However, there have been reports about restriction of free
speech for opposition parties in Singapore. It is said that the
value of free speech for the parties is limited. The defamation
laws require opposition parties to be careful that political
comments do not lead to costly defamation suits or
imprisonment.
PESTLE ANALYSIS OF SINGAPORE

ECONOMIC FACTORS
The economy of Singapore is a vibrant free-market economy. It is
developing at a very fast pace. The countrys per-capita income is the
highest in ASEAN. A corruption-free environment supports the business
sector. It is among the most competitive countries. The educated and
motivated workers strengthen it. The legal and financial business
framework helps as well.
Recently, the government has invested in diversifying the economy. As a
result, the tourism, pharmaceutical, and many other industries have
flourished. One of the main reasons behind the success is its strategic
geographic location. The government is an imperative and active player. It
owns substantial productive assets. Cheaper labor cost from neighboring
countries helps Singapore save a lot of costs.
Some constraints on Singapores economic performance are the following:
-Labor shortages
-Rising labor costs
-Declines in productivity
PESTLE ANALYSIS OF SINGAPORE

SOCIAL FACTORS
Socially, Singapore is like any other Eastern country. It still
follows traditional family values. It is true that the younger
generation has the tendency to follow western culture and
values. The residents work hard and fulfill the materialism
desire. This urge to do well has increased nation productivity.
The business sectors can, therefore, expect higher
purchasing power from customers. Reports suggest that
most Singaporeans dislike blue collar jobs like construction.
Literacy rate in the country is very high. Primary schooling is
compulsory in Singapore. Parents must ensure childrens
regular attendance. Good command of English and Chinese
languages gives Singaporeans an advantage. It helps to
attract international trade and foreign investment.
PESTLE ANALYSIS OF SINGAPORE

TECHNOLOGICAL FACTORS
I can assure that one of the main reasons behind the change in
lifestyle and quality of life is the technological advancement.
As you might have guessed, the internet plays a role in
Singapores advancement. It eased communication and increases
connectivity. The cost and time of conducting business lowered. It
also boosted the social networking. The residents could easily
connect to the rest of the world.
The IT infrastructure in Singapore is praise-worthy. The penetration
rate for household broadband internet is over 70%. E-commerce
and eB2Cmodels have flourished in turn. More than 10Mbps of
broadband internet service is available. The widespread IT
infrastructure has encouraged multinational companies to set up
regional operations in Singapore. The government is also moving
towards an electronic government era.
PESTLE ANALYSIS OF SINGAPORE

LEGAL FACTORS
The government thinks that growth of electronic commerce
depends on transparent and market favorable legislations and
regulations. Certain legal, regulatory and business settings are
needed to support industry development and economic growth.
E-commerce program was launched in 1996. The aim was to
develop the e-commerce services. Singapore has introduced
some e-commerce policy initiatives. There are cross-border e-
commerce laws and policies. Some basic legal and technical
infrastructures to support secure e-commerce were available
since 1998. Some of them are Electronic Transactions Act,
Intellectual Property Rights, Amendments to the Evidence Act,
Content Regulation, Tax Issues and Import and Export
Procedures.
PESTLE ANALYSIS OF SINGAPORE

ENVIRONMENTAL FACTORS
The Ministry of the Environment and Anti-Pollution Unit works relentlessly
to maintain air quality and other environmental factors. Pollution from the
transportation is the key problem in Singapores urban areas. There was a
time when Singapore was among countries with the highest level of
industrial carbon dioxide emissions.
Singapore lost almost 30% of its mangrove area. Many species are in
danger of extinction.
The Water Pollution Control and Drainage Act helps control water quality.
One of the major concerns for Singaporeans is that the country does not
have enough water to support their needs. Pollution from the industrial
byproducts like oil increases the problem. As a solution, water is recycled
after desalination.
As there is a lack of water resources, Singapore is dependent on Malaysian
supplied water. A local brand called NEWater supplies sewage water
after purifying it using dual-membrane. More solutions to this problem are
needed.
PESTLE ANALYSIS OF SINGAPORE

After analyzing all these factors, It is clear that

Singapore is a remarkable country. It houses
talented and motivated people. It also provides
great business opportunities. I can conclude that
its business success in both domestic and
international platforms is highly benefited by
government policies. Its enterprise friendly
approach boosts business as well. Singapores
continuing development has made it a major
competitor in the international market. The
compulsory primary education and hardworking
citizen are contributing factors.
Investment Risk
Singapores external position is very strong. Current
account balance is at a high level (22% of GDP in
2015) with a large trade balance surplus (28% GDP in
2015). FX reserves are ample, covering 10 months of
merchandise imports. Large external debt is
associated with Singapores position as a financial hub
and should not pose a significant risk in the short run.
As a matter of fact, the government does not service
an external debt and the country has a large net
creditor position. Negative spill overs from volatile
financial flows have so far been contained thanks to a
solid banking system and strong regulatory and
supervisory frameworks.
 Factors included in the ranking of countries
by risk:
Political risk Economic
performance/projections
Structural assessment
Debt indicators
Credit Ratings
Access to bank finance
Access to capital markets
Investment policy
Singapore has signed Bilateral Investment Treaties (BITs)
with 46 countries. Some are terminated and others are not
yet in force
Singapore has no laws that force foreign investors to transfer
ownership to local interests and as such no disputes are
pending with UNCTAD
Singapore is open to foreign investment and offers tax
incentives to companies after they register with
theEconomic Development Board
Singapore's legal framework and governmental policies do
not require any specific authorisation to invest in the
country, certain limits exist in such sectors
Founders of a new business in Singapore can request
assistance from certain institutions or national organisations.
Investment Companies:

GIC
(The Government of Singapore Investment Corporation
Pte Ltd)Global investment management company established
in 1981 to manage Singapore's foreign reserves; invests
internationally in equities, fixed income, money market
instruments, real estate etc; has a portfolio worth $100 billion
Temasek HoldingsAsia investment company headquartered in
Singapore with a diversified global portfolio; board of directors
comprises prominent leaders from the public and private sectors
Jasper Investments Ltd Investment holding firm that invests
in growth enterprises in the Asia Pacific region (formerly called
Econ International Ltd); a 45% stake is held by a consortium of
investors led by Ashmore Investment Management Ltd, an
emerging market specialist
Singapore's long-range goal is to surpass the U.S. per capita GNP by 2030.
Singapore's future activities are based on its E 2000 plan to move into
more advanced production capabilities. The upgrading of technology is
essential to address the rising cost of labor and to improve living
standards. The plan stresses working relationships between government,
industry, and academia. It includes a wide range of programs to support
the development of semiconductors, communications, display, and data
storage businesses across Southeast Asia. ASEAN's members are
reinvesting to improve their core competencies at all levels of the supply
chain. Singapore alone invested $28 billion in 1993 in countries
throughout the region. The strategy is intended to increase higher-value-
added products, develop greater R&D activities, create a better trained
workforce, and further develop Singapore's regional role as the leader of
its immediate geographical area and gateway to that area for MNCs,
technology transfer, investment, and so forth.

Conclusion
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https://
www.theseus.fi/bitstream/handle/10024/57443/Polev
ikova_Maria.pdf
https://

www.guidemesingapore.com/incorporation/introducti
on/singapore-incorporation-advantages
http://pestleanalysis.com/pestle-analysis-of-singapo

re
/
https://

www.rsm-verhuelsdonk.de/fileadmin/RSM_Verhuelsdon
k/Publikationen/Doing_Business_in/doing_business_
in_Singapore.pdf
http://

unctad.org/en/Pages/DIAE/World%20Investment%20R