Doing Business

Singapore Investment: Strategic Considerations

Trường Lăng

November 20, 2023

Doing Business

Singapore Investment: Strategic Considerations

Trường Lăng

November 20, 2023

In the realm of global business, making the decision to invest in Singapore or opt for investment opportunities in China is a pivotal choice that necessitates careful evaluation. This article serves as a comprehensive guide, illuminating the significance of geographical location, human resources, economic background, economic policy, and investment incentives in shaping the environment for foreign direct investment. By comparing these crucial factors, we aim to provide investors with valuable insights, allowing them to make informed decisions that align with their investment goals and strategies.

Investing in Singapore: Geographical Location and Human Resources

Strategic Location for Investment Opportunities

Singapore’s strategic location at the intersection of major shipping routes and air corridors is not just a logistical win; it is the golden ticket to emerging markets as well as developed economies. Located at the southern tip of the Malay Peninsula, this global hub offers direct access to the booming economies of Southeast Asia, China, and even as far away as China East and Australia. For investors, this means unparalleled global exposure and diversification opportunities.

In comparison, China has a favorable geographical location, near emerging Asian markets, Japan, and adjacent to the sea. This positioning has allowed China to develop a robust transportation network and engage in global import and export through extensive export networks. While China’s location is advantageous, Singapore’s focused accessibility to diverse markets remains a unique selling point for businesses aiming to expand their international footprint.

Workforce Quality for Investment Environment

Singapore’s status as a melting pot of many cultures not only enriches its cultural fabric but also provides fertile ground for global networks and cross-cultural partnerships. With a predominantly highly skilled workforce, Singapore ensures a competitive labor market and brings significant benefits to businesses. The quality of human resources in Singapore aligns with the nation’s commitment to education and skill development.

China, as the fourth-largest country globally with a population exceeding a billion, offers enormous supply and demand potential. Despite disruptions from the Covid-19 pandemic, China’s gradual return to economic recovery is attracting foreign investment. However, it’s essential to acknowledge that skilled workers account for only 26% of the total workforce in China. The sheer size of China’s labor market offers both opportunities and challenges for investors.

Workforce Quality for Investment in China
China offers enormous supply and demand potential. Source:

Understanding the Economic Background for Investments in Singapore

Singapore’s Thriving Economy

Singapore’s economic landscape is a diverse and dynamic arena, characterized by its highly developed and successful market economy. A cornerstone of this success lies in the country’s prominent exports, which encompass electronics, chemicals, and an array of services. These export-oriented industries continue to drive Singapore’s economic growth and global relevance.

One of Singapore’s outstanding strengths lies in its financial sector, often dubbed the “Switzerland of Asia” due to its reputation for stability, transparency, and innovation. The financial industry in Singapore provides a robust and dynamic environment for various financial activities. Fintech, in particular, has flourished in this thriving financial hub, attracting investors and financial businesses seeking to harness its potential. In the “IMD 2022 World Competitiveness Ranking,” Singapore secured an impressive third place among the most competitive countries globally. Sectors notably supported by the government, such as IT technology and services, renewable energy, and the pharmaceutical and biotechnology industry, have thrived, further solidifying Singapore’s position as a center for biomedical science on the world stage.

The Economic Background for Investments in Singapore
Singapore secured an impressive third place among the most competitive countries globally. Source: BusinessWorld

China’s Post-Pandemic Economic Landscape

As China emerged from the challenging times of the Covid-19 pandemic, its economic focus in recent years has remained largely centered on the promotion of manufacturing and heavy industry. State-owned enterprises and prominent domestic companies have received protection and encouragement from the government to invest in high technology, new equipment and materials production, the service sector, renewable energy, and environmental protection. China’s approach aims to foster technological advancement and reduce environmental impact.

China’s investment landscape exhibits a strategic shift, with a deliberate emphasis on discouraging foreign investment in key sectors where the government seeks to transform domestic companies into globally competitive multinational corporations. This approach may pose challenges for foreign investors aiming to penetrate markets previously supported by state or traditional state monopolies. In alignment with the government’s agenda, speculative investments in areas like real estate and property are discouraged, underlining China’s commitment to long-term economic development and stability.

Economic Policy and Law for Investment in Singapore

Legal Framework for Investing in Singapore

The investment landscape in Singapore is underpinned by an exceptionally inviting legal framework. The city-state has mastered the art of attracting venture capital, private equity, and foreign direct investment through pro-business policies. Singapore offers a seamless journey for investors, from its transparent legal structure and robust intellectual property protection to its investor-friendly tax regime, all supported by a robust digital infrastructure. These investor-friendly conditions are a boon to entrepreneurs, startups, and multinational corporations. Some of the positive aspects include non-discrimination against foreign investment, a harmonious blend of financial and labor policies, expeditious administrative procedures, and an uncomplicated, investor-friendly tax system with one of the world’s lowest corporate tax rates at just 17%. Singapore’s legal system is characterized by transparency, fairness, and objectivity, further instilling investor confidence. Notably, Singapore boasts one of the world’s most extensive networks of Double Taxation Agreements (DTAs) and Free Trade Agreements (FTAs), with 27 FTAs worldwide. This approach promotes international trade and business, providing investors and companies based in Singapore unrivaled access to pivotal global markets.

Economic Policy and Law for Investment in Singapore
Singapore boasts one of the world’s most extensive networks of DTAs and FTAs. Source: MTI

The Complex Legal Landscape in China

While China presents a wealth of opportunities for investors, its legal environment can be described as multifaceted, constantly evolving, and intricate in terms of administrative procedures. One of the notable drawbacks is the perceived lack of transparency and inadequate protection of intellectual property rights, issues that investors should approach with caution. The Chinese government’s stance on foreign investment remains more restrictive than other major economies, with several sectors closed to Foreign Direct Investment (FDI). Investors in China must navigate through a regulatory framework known as the Negative List for Foreign Direct Investment. While post-Covid-19, China has hinted at expanding opportunities for foreign investment, substantial changes are yet to materialize. FDI appears to be more welcome in three key areas: high-end manufacturing, production-oriented service industries, and China’s Central, Western, and Northeastern provinces. Understanding the intricate and ever-evolving legal environment is crucial for investors eyeing China, ensuring informed and prudent decision-making.

Detailed Investment Incentives in Singapore

Investing in Singapore comes with a suite of enticing incentives, ranging from tax exemptions to support for international expansion:

  • Start-Up Tax Exemption Scheme (SUTE): For eligible companies, SUTE provides a substantial tax benefit. Starting in 2020, businesses can enjoy a 75 percent tax exemption on the first S$100,000 (US$73,770) of chargeable income for the initial consecutive three years. The subsequent S$100,000 of chargeable income qualifies for a 50 percent tax exemption. Note that SUTE applies exclusively to the first three-year assessments. Beyond this period, firms can transition to the Partial Tax Exemption (PTE) scheme.
  • Partial Tax Exemptions: In cases where companies do not meet the SUTE criteria, they can still benefit from the Partial Tax Exemption (PTE) scheme. Introduced in 2020, the PTE allows businesses to receive a 75 percent exemption on the first S$10,000 (US$7,400) of chargeable income. An additional 50 percent exemption can be applied to the next S$190,000 (US$140,000).
  • Double Tax Deduction for Internationalization (DTDi): Singapore has a vast network of Avoidance of Double Taxation Agreements (DTAs) and Exchange of Information Arrangements (EOI Arrangements), covering 106 countries. Notably, Singapore has signed DTAs with 96 jurisdictions. Under the DTDi, businesses can claim a 200% tax deduction on eligible expenses related to international market expansion and investment development operations. This tax advantage is particularly attractive for enterprises seeking to expand their international footprint.

These incentives, combined with Singapore’s pro-business environment, make it an attractive destination for foreign investors.

Final Thoughts

In this comparative exploration of investment opportunities, we’ve uncovered the unique advantages that set Singapore apart as a prime destination for investors. From its strategic geographical location at the crossroads of global trade to its world-class workforce and favorable economic policies, Singapore offers a compelling investment environment for businesses to thrive. As you contemplate your investment decisions, it’s crucial to recognize how these factors can shape your success in the competitive world of business.To delve deeper into the wealth of investment opportunities that Singapore presents, we invite you to explore our comprehensive guidebook, “Doing Business in Singapore.” Unlock the potential of your investment in Singapore and gain invaluable insights into establishing and growing your business in Singapore with the support of Viettonkin. Your journey to success begins here.

Related posts

Doing Business

Investment Transition: Singapore’s Appeal

Table of Contents Why Investors Are Choosing SingaporeEconomic and Political StabilityAccess to Global MarketsBusiness-Friendly PoliciesKey Sectors Attracting InvestmentManufacturing IndustryFinancial Services LandscapeAdditional Emerging IndustriesChallenges and Considerations ...
Read more
Doing Business

Vietnam’s Edtech Industry Outlook for 2023 and Beyond

Table of Contents Vietnam’s Edtech growth prospects in 2023Opportunities for foreign investors breaking into Vietnam’s edtech marketBlended learning in higher education and vocational trainingEarly childhood ...
Read more
Doing Business

How to incorporate a company in Malaysia in 2022

Table of Contents Conditional business sectors in MalaysiaCompliance under Malaysian regulations There are the 5 main types of business entities available in Malaysia. · Sole ...
Read more
Doing Business


Viettonkin Consulting has helped its clients register their businesses in the Philippines for years. Our offerings consist of i) services for company formation in the ...
Read more

Download our Latest Ebook about Real Estate and Property!

Real estate holds a pivotal position in the development of a country, not only via the spillover impacts on other economic sectors such as construction, manufacturing, tourism, finance and banking etc. but also affecting the social dynamic by mobilizing the residency and infrastructure system. Foreign direct investment in real estate (RFDI) in Vietnam has a long running history and is unique in that it is largely dominated by the private sector compared to other industries which usually still have a rather large Government involvement. International capital has consistently been selecting real estate as the destination of choice, given that RDI has always been in the top 2 and 3 for volume inflow over the last 10 years, even throughout extremely turbulent periods such as COVID-19, per the General Statistics Office of Vietnam’s (GSO) data. Find out more in this ebook edition.

Tải cuốn ebook mới nhất về nền kinh tế số Việt Nam!

The digital economy of Vietnam has been fueled and accelerated by the global digital trends and the pandemic Covid-19. The movement of digital transformation is underway in every corner of Vietnamese life, strongly influencing the way people do things. Digital economy is the future of the Vietnam economy. Realizing the potential of the digital economy, the Vietnam government has issued policies, guidelines and created legal frameworks to support and further enhance this economy. In this ebook edition, the digital economy is looked at from different angles. Perspectives from the key elements comprising Vietnam digital economy are examined and discovered.

Our Happy Clients