Foreign Direct Investment in Singapore

By: EconomyWatch   Date: 29 June 2010

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As per data released by “Singapore Department of Statistics”, Singapore's FDI stock has more than tripled in the time period from 1995 to 2005. Europe, North America and Asia were the major FDI contributors to Singapore. These regions contributed to 82% of the Singaporean FDI stock in 2005.

Europe gradually gained in importance as Singapore's leading foreign investor in the 1995 to 2005 time period. Europe's share of investment in this period rose from 31% to 43%. Absolute amount of foreign investments from Asia and North America in Singapore increased during the same reference period. However, their shares recorded a decline. Asia recorded a decline in its share from 33% to 24%. For North America the decline was from 21% to 15%.

In the reference period, United Kingdom, Switzerland and Netherlands were some of the major foreign investors from Europe to invest in Singapore. Taken together, these three nations accounted for over 77% of European FDI stock flow into Singapore.

United Kingdom's share of FDI inflow to Singapore rose from 34% in 1995 to 37% in the year 2005. The comparable figures for Netherlands were 16% and 24% respectively in the same reference period. Switzerland's FDI inflow figures to Singapore declined from 25% in the year 1995 to 16% in the year 2005.

Two other European nations engaged in FDI activity in Singapore were Norway and Germany. Norway's share of foreign investment in Singapore rose from 0.7% in 1995 to 5.9% in the year 2005. The comparable figures for Germany were 6.7% and 5.6% respectively. Germany's investment interests in Singapore suffered a decline from 1995 to 2005.

Asia's FDI flow for Singapore increased more than twice from 1995 to 2005. In 2005 Japan was the largest Asian foreign investor in Singapore. Japan's share of total Asian FDI stock for Singapore for the period 1995 to 2005 ranged from 56% to 60%.

Malaysia and Taiwan held the second and third positions with respect to size of FDI stock investment from Asian countries in Singapore in 2005. Taiwan's share of FDI from Asia to Singapore rose from 3.1% to 9.7% in the period from 1995 to 2005. In the same reference period Malaysia's share fell from 13% to 9.7%.

In 1995, Hong Kong held the distinction of being the second largest foreign direct investor from Asia in Singapore.

Foreign direct investment in Singapore from North America in 2005 was more than double the comparable figure for 1995.

Most of the FDI flows into Singapore from 1995 to 2005 went to some major sectors of the economy. They are stated below:
  • Financial services and Insurance services sector
  • Hotels and restaurants
  • Manufacturing sector
  • Whole sale trade and retail trade sectorThese above mentioned sectors of the Singaporean economy accounted for nearly 90% of Singapore's FDI stock for the year 2005.

    As per 2007 data, foreign investments measured in '$m' in Singapore's manufacturing sector amounted to 14,279.2. Investment measured in $ billion for the Singaporean economy as a whole stood at 23.1 for the year 2007.

    The number of investment projects in Singapore funded by FDI flow in 2007 was 239. The number of jobs generated out of it was 35,441.

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