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Singapore Investment Analysis

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As an important member of ASEAN and an important financial, trade, service, and shipping center in the region, Singapore has played a key role in the construction of the “Belt and Road Initiative.” While deepening the level of interconnection and interoperability with China and bilateral relations, Singapore has also become a deeper focus for Chinese companies as an important bridge to expand the Southeast Asian market.

Overview of Economic and Investment Environment in Singapore

Singapore is located in the heart of ASEAN, adjacent to major Southeast Asian countries such as Indonesia and Malaysia. It enjoys a superior geographic location and significant geographical advantages. It not only links all ASEAN countries, but also has close commerce and trade with China, Japan, South Korea, the United States and other major Asian and Western countries. An important hub and commercial center that connects the entire Southeast Asia and Asia Pacific markets. Singapore has a well-developed infrastructure, a developed economy, and a stable society. It also has a well-developed business network, a sound legal environment, and a clean and efficient government system. As a result, the global business environment, economic freedom, and national innovation capabilities are related to business investment. All of the core indicators are ranked high.

However, due to the limited land area and the scarcity of natural resources, Singapore is a typical export-driven economy and highly dependent on the international market2. In recent years, with the steady progress of the “One Belt and One Road” initiative, Chinese companies have continuously increased their investment in Singapore and expanded their investments. At present, Singapore is mainly engaged in professional services such as finance and shipping, and electronics, petroleum and petrochemical. In the coming years, the Singapore government plans to vigorously develop innovative industries such as digital industries. Singapore is expected to exert its advantages and assist Chinese companies in further expanding their technological innovation in Southeast Asia. The market has become a pilot area of ​​the “Belt and Road” technology innovation industry.


Singapore’s tax incentives for attracting foreign investment

The Singapore government provides extensive tax incentive support to attract foreign investment. Among them, the tax incentive measures focus on promoting the consolidation of a large number of high-value-added businesses in Singapore and enhancing their own level of innovation and professional skills. In order to improve Singapore’s local business environment and make it more attractive, tax incentives as a fiscal policy tool can effectively highlight Singapore’s status as a major global business and investment hub.

Singapore’s Role and Prospects under the Belt and Road Initiative

China and Singapore are mutually important economic and trade cooperation partners. In recent years, bilateral economic and trade cooperation has developed rapidly and the cooperation has become broader and deeper. Chinese investors have always regarded Singapore as one of the important overseas investment destinations. In 2017, the rapid growth of Chinese companies’ M&A activity in Singapore made Singapore the largest destination for 2017 China’s overseas M&A, including transportation, technology, telecommunications, and life. The science industry is most favored by Chinese investors.

Invest in potential industry

Singapore is an important country along the “Maritime Silk Road” and can play a key role in the “One Belt and One Road” as an important strategic fulcrum. At present, Singapore companies and Chinese companies are actively cooperating to expand projects along the way and explore investment opportunities. The two sides are involved in a number of industries including energy, infrastructure, shipping, logistics, finance, real estate development and new media.

Financial service

In order to further enhance the attractiveness of the investment and make Singapore a world-class financial center, the Monetary Authority of Singapore has relaxed its control over Singapore’s domestic banking industry and insurance industry in 2017. For the first time, it allowed foreign investors to acquire Singapore’s non-banking financial companies and will supervise them. Turn to risk-based control, relax restrictions on fund management companies managing domestic funds, develop debt markets and improve corporate governance. In order to support the “One Belt, One Road” initiative, at the end of 2017, the “Singaporean Belt and Road Insurance Consortium” was established by the Singapore Branch of China Reinsurance (Group) Co., Ltd., a consortium that brings together local insurance companies and reinsurance companies. , Brokerage company will take the lead in the field of engineering insurance, cargo and liability insurance to provide “Band and Road” related projects with quality underwriting capabilities, professional insurance protection and risk management services, and provide “one-stop” solutions.

Emerging technology industry

Singapore is one of the most innovative economies in Southeast Asia and the Asia-Pacific region, ranking 205 in the world’s top ten innovation countries. It has developed rapidly in emerging technology industries such as e-commerce and financial technology, attracting a large amount of foreign investment. The Singapore government not only provides tax incentives for companies to encourage companies to increase their R&D efforts in Singapore and optimize their ability to innovate, but also launches the “Productivity and Innovation Discount Program” to strongly support the development of local emerging technology industries.
Ernst & Young believes that the development of emerging science and technology industries needs a sound institutional foundation, an open market environment, and strong innovation capabilities as a support. Singapore has several advantages in terms of high opportunity, low risk, openness, and innovation. It has the ability to become a pilot area for emerging industries along the “One Belt and One Road” initiative. Represented by the Internet economy, in recent years, China’s e-commerce giant Alibaba has invested in Singapore’s local electricity supplier Lazada, and has built an e-commerce supporting logistics park in Kuala Lumpur, 350 kilometers away from Singapore. It is integrating Ali into online, offline, and logistics. The “new retail” business concept that is operating in practice is practiced in Singapore and the surrounding areas.

High-end human resources platform

The advantage of having many talents is pushing Chinese companies to use Singapore as an ideal bridge for investing in markets such as Southeast Asia. The labor force in Singapore is not only highly educated, but about 60% of the workforce is proficient in Chinese 10, and more than 40% of the workforce can speak two languages and understand Chinese. The Singapore government has also been committed to working with all parties to train young people who know China and are familiar with Asia through various training programs and incentives.


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