R. Hirschmann
Research expert covering Singapore, Indonesia and Malaysia
Foreign direct investment (FDI) into Singapore - statistics & facts
Despite being a small economy, ranking below Indonesia and Thailand in gross domestic product in Southeast Asia, Singapore pulls in the lion’s share of foreign direct investments (FDI) into the region. In 2023, Singapore was the third-largest receiver of foreign direct investments worldwide, after the United States and China. In that year, Singapore was also among the leading cities for greenfield investments, second only to Dubai. What then makes this small, resources-poor island country a highly attractive destination for foreign investors?
Singapore’s favorable business climate has contributed to its success in attracting foreign direct investments to its shores, bolstering its status as an economic powerhouse in Southeast Asia.
Singapore’s success in fostering a favorable business climate
Over the decades, Singapore has cultivated its reputation as an open and free market economy that is highly conducive to doing business. Singapore’s economy is heavily reliant on global trade, and the country is a shipping and aviation hub in the Asia-Pacific region. Apart from its position as a gateway to other Asia-Pacific markets, Singapore is also able to offer investors both economic security and political stability. It has strong intellectual property protections, business-friendly laws, as well as an advantageous tax structure. The country also consistently ranks among the least corrupt countries globally, ensuring that business can be conducted with transparency, and that the aforementioned laws and regulations would be upheld. Additionally, Singapore has invested in building and maintaining strong digital, financial, and transport and logistics infrastructures to facilitate business. All these factors helped place Singapore among the leading countries on the foreign direct investment confidence index.Leadings sources economies for and the industries receiving FDI
Over the last decade, Singapore’s stock of inward FDI has more than doubled, reaching a peak in 2023. The largest source economies for inward FDI to Singapore was the United States, followed by Japan, the United Kingdom, and Hong Kong. The majority of inward FDI stocks to Singapore are channeled into three key industries: the financial and insurance sector, followed by wholesale and retail, and manufacturing. While its manufacturing sector would not be able to compete in terms of volume and scale, Singapore is relying on attracting global companies in advanced manufacturing, particularly in biomedical technologies and semiconductors. In 2024, AstraZeneca announced a planned greenfield facility for antibody drug coagulates (ADC) in Singapore- its first end-to-end production site for ADC- to be operationally ready by 2029. Such projects contribute to the high volume of greenfield FDI projects in Singapore.Singapore’s favorable business climate has contributed to its success in attracting foreign direct investments to its shores, bolstering its status as an economic powerhouse in Southeast Asia.
