Foreign Direct Investments (FDI) in Singapore

Singapore’s strategic location boasts high level of connectivity in Asia, including easier access to the largest consumer market in the world – China. As the business and financial hub in Southeast Asia, Singapore is the perfect place to kickstart your business before expanding into the rest of Asia.

If you have prepared all the relevant documents for your company incorporation, the registration process can be done within the day – check out our incorporation checklist to get you started!

Low corporate tax rate

Another key reason why you should opt to invest in Singapore is because of its low corporate tax rate of just 17%. This rate is actually one of the lowest in the world!

Tax incentives

What’s more? Besides its low corporate tax rate, there are plenty of tax incentives for foreign and local business in Singapore, such as tax exemption of your first S$100,000 for the first three years, avoidance of double taxation, and more. You can find the list of incentives in our article here.

Resilient environment

The pandemic has brought a need to invest in economies that are resilient. The Singapore government has done a great job in maintaining and controlling the outbreak and is on track to recover from the downturn. Confidence from foreign investors is restored, and this is reflected in the record high FDI in Singapore since 2008.

Trade agreements

If you didn’t know by now, Singapore is very pro-business. With many trade agreements in place to facilitate business activities, it makes it very promising for foreign businesses to expand their operations in Singapore or set up a company here.

Attractive personal income tax rates

Beyond just setting a company in Singapore, many business owners will choose to live and work here because of its low personal income tax rates at a maximum of 22%.

High level of security and safety

Known as one of the most politically stable countries in the world, it boosts a secure and comfortable environment for locals and foreign investors. The low crime rate is also a key factor in choosing to live and work in Singapore

Singapore Government Treasury Bills

For investors who are looking at short-term investments of up to 1 year, the Singapore Government Treasury Bills offer such an investment with very low risks as it is one of the few AAA-rated economies in the world. The payments are on its 6-month or 1-year treasury bills.

Bonds between 2-30 years are also made available by the Singapore Government. In general, these bonds often garner a higher return than a 1-year treasury bill. However, the risk is higher as it has a longer maturity period.

Singapore Savings Bonds are among the most common investments in which foreign investors invest. If investors do not redeem the bond, the rates will increase until the 10th year, recognising the fact that investors are holding for a longer term.

The CPF Top-Ups provide opportunities for investors to earn interest on their funds. These funds are supplied by the government and offer return rates at a minimum of 4% per annum. There is also usually an additional 1% interest rate to be earned by the investor.

Fixed deposits serve as a way for investors to earn returns on their money after this money has been deposited in a savings account. Most banks in Singapore offer promotional rates that favor foreign investors.

The advantage of investing in a unit trust can be seen in the reduced investment risk as well as the ability to have professionals managing all funds and personal finances. Investment in a unit trust may also help foreign investors to maximise their profits which they have made in Singapore.