Singapore is one of the countries that has a great deal of foreign investments and company incorporations because of its stable and positive business environment. Likewise, the government encourages Singaporean investors to return the favour, especially in the Asia-Pacific (APAC) region – here’s why.
Why the Singapore Government Encourages Investment in Other Countries
There are a few reasons why the government is pushing for Singaporean investors to invest abroad:
Types of Foreign Direct Investments
There are 3 types of Foreign Direct Investments (FDI), namely:
Advantages of Foreign Direct Investments
Not only the country benefits from FDIs, Singaporean investors also can tap on these advantages when investing abroad:
How Singaporean Investors Invest in Other Countries
FDI within the APAC region are most common among Singaporean investors. Here are some interesting statistics about how they are investing abroad:
With FDI to other countries, not only does it benefit the investor, it also helps the government and economy in the long-run.
Business Grants for Overseas Investment
To encourage more local investors and business owners to set up and expand overseas, the Singapore government has initiated the Market Readiness Assistance (MRA) Grant to assist with the internationalisation of companies.
Under this grant, local companies with at least 30% local shareholding and revenue of less than S$100 million can get up to 70% of funding for eligible costs under 3 categories – overseas market promotion, overseas business development, and overseas market setup.
Companies in Singapore can use the grant as many times as they wish for expansion into different countries. Through this grant, the government hope to deliver on its promise to push local brands into the overseas market to spur FDI overseas.
To start a company overseas as a Singaporean, you will need to understand the incorporation process. If you plan to incorporate in Malaysia, Indonesia, Vietnam, and Hong Kong, reach out to us and we can kickstart your incorporation journey.
Horizontal and vertical FDIs are most common as most investors would be more interested in the industry that already have knowledge in (horizontal FDI) or helps them to achieve better performance for their existing investments (vertical FDI).
Investing locally or overseas has its pros and cons. For instance, if you are a Singaporean investor looking to set up a new company and deciding between Singapore and Malaysia, you are more aware of the Singapore business environment, but the cost of labour is higher here than in Malaysia, and vice versa.
FDI is an investment by a firm or individual from one country into another country, engaging in diverse business interests such as mergers, acquisitions, retail, services, logistics, manufacturing, and more.