The United Nations Conference on Trade and Development recently released the “World Investment Report 2025”, which shows that in 2024, Singapore’s foreign direct investment inflows will increase by 6.1% to US$143.4 billion, a record high. As a single national economy, its global ranking has risen from third in 2022 to second, and it continues to lead among ASEAN members.
At the policy level, the Singapore government has paved the way for foreign investment inflows through precise policies in recent years. At the beginning of 2024, the Singapore government’s fiscal budget included a number of measures directly targeting the pain points of corporate development, launched the “Enterprise Assistance Package”, and invested 1.3 billion Singapore dollars to alleviate the pressure on corporate operating costs; in terms of tax incentives, the Singapore government stipulates that Singapore companies can enjoy a 50% income tax reduction in 2024, with a cap of 40,000 Singapore dollars, which effectively alleviates the financial pressure caused by inflation. In addition, in 2023, the government will also provide an additional minimum cash allowance of 2,000 Singapore dollars to unprofitable companies that employ at least one local employee, injecting vitality into start-up companies.
The refundable investment tax credit program implemented by Singapore in January this year has become a major force in attracting foreign investment. The program focuses on high-value economic activities, covering multiple fields such as new manufacturing plants, low-carbon energy facilities, digital service expansion, supply chain strengthening, commodity trading company establishment, R&D innovation and carbon reduction programs. Enterprises can deduct up to 50% of their capital investment, labor costs, training costs, etc. in these fields from the current year’s corporate income tax, and the remaining part can be refunded in cash within 4 years. The specific amount will be determined by the Economic Development Board and the Enterprise Development Board.
The Singapore government is also continuing to increase its efforts to promote the integrated development of investment and innovation. In fiscal year 2025 (April 1, 2025 to March 31, 2026), the Singapore government added S$3 billion to the National Productivity Fund to specifically support scientific and technological innovation and research and development. Since 2023, the purpose of the fund has expanded from subsidizing local companies to improve productivity and support talent training to attracting high-quality multinational companies, and promoting the development of high-value-added industrial clusters such as advanced manufacturing, green economy and digital economy through incentive policies.
The Global Entrepreneur Program is also being promoted simultaneously, aiming to encourage global founders to establish and develop new projects in Singapore to strengthen the local startup ecosystem. The Singapore government will provide comprehensive resources and support measures, including allowing founders to join a community of like-minded entrepreneurs, strategic partners, investors and consultants to jointly plan corporate projects. At the same time, it will simplify the procedures for setting up companies and introducing talents to help founders build efficient teams in Singapore.
As an important global trade and aviation hub, Singapore occupies a strategic position in the Asia-Pacific region, providing investors with broad development space. The stability of its economic policies is a highlight. The government has always been committed to maintaining macroeconomic growth, creating a predictable business environment, and effectively reducing investment risks.
A mature and stable financial system is the key support. As an important global financial center, Singapore has strict and efficient supervision to ensure market stability and capital security; diversified services such as banking, insurance, and asset management meet different needs; advanced payment and clearing systems, credit rating agencies and other infrastructure have improved transaction efficiency and transparency, attracting a large number of financial institutions to take root here.
The “hard power” of infrastructure construction cannot be ignored either. Singapore continues to invest in building a world-class network of ports, airports and roads. Changi Airport connects more than 200 cities, providing convenience for logistics and transportation; digital infrastructure and advanced communication and information technology facilities, etc., lay a solid foundation for the digital economy and innovative industries.
The improvement of the policy and regulatory system has further enhanced its attractiveness. The strict intellectual property protection system protects the innovative achievements of enterprises; the lower corporate income tax rate and additional exemptions in specific areas effectively reduce operating costs; simplified administrative approvals and efficient government services provide investors with full-process convenience from registration to operation.
Talent advantages inject “live water” into industrial development. Singapore’s education system focuses on the combination of theory and practice, and the talents trained are professional and have strong practical ability; at the same time, Singapore also attracts outstanding talents from around the world through policies such as work visas and permanent residence, forming a diversified talent team to meet the multi-level needs of enterprises.
In addition, a stable political and social environment provides a fundamental guarantee for investment security; a good city image also provides residents and enterprises with a high-quality living and working environment, forming a virtuous circle of “gathering talents with the environment and attracting investment with talents”.
As a member of ASEAN, Singapore promotes regional integration and free trade, and has signed free trade agreements and investment protection agreements with many countries to expand market space for enterprises. At the same time, Singapore also actively participates in global economic governance, enhances its international influence and voice, and allows foreign capital to conveniently connect to the global network.
Against the backdrop of global economic recovery, investors are paying more attention to emerging markets, and Singapore has become an ideal choice for risk aversion and profit-seeking with its comprehensive advantages. Its early layout in the fields of digital economy and green economy is highly consistent with global industrial trends, attracting a large number of related companies to settle in. Looking ahead, Singapore is expected to continue to maintain its leading position in the global investment market, attract more high-quality foreign capital, and promote sustained and stable economic development.