<NREC>Singaporetoc Singapore: Table of Contents <A>=Singapore

 

 

COUNTRY COMMERCIAL GUIDE SINGAPORE, FISCAL YEAR 1999

July 20, 1998

 

TABLE OF CONTENTS

 

Chapter I     Executive Summary

 

Chapter II    Economic Trends and Outlook

 

--Major Trends and Outlook

--Principal Growth Sectors

--Government Role in the Economy

--Balance of Payment Situation

--Infrastructure

 

Chapter III   Political Environment

 

Chapter IV    Marketing U.S. Products and Services

 

--Distribution and Sales Channels

--Use of Agents and Distributors: Finding a Partner

--Franchising

--Direct Marketing

--Joint Ventures/Licensing

--Steps to Establishing an Office

--Selling factors/techniques

--Advertising and Sales Promotion

--Pricing Product

--Sales Service/Customer Support

--Selling to the Government

--Protecting your Product from IPR Infringement

--Need for a Local Attorney

 

Chapter V Leading Sectors for U.S. Exports and Investment

 

--Best Prospects for Non-Agricultural Goods and Services

--Best Prospects for Agricultural Goods and Services

--Significant Investment Opportunities

 

Chapter VI Trade Regulations and Standards

 

--Trade Barriers

--Customs Valuations

--Import Licenses

--Export Controls

--Import/Export Documentation

--Temporary Entry

--Labelling, Marking Requirements

--Prohibited Imports

--Standards

--Free Trade Zones/Warehouses

--Special Import Provisions

--Membership in Free Trade Arrangements

 

Chapter VII   Investment Climate

 

--Investment Policy Summary

--Conversion and Transfer Policies

--Expropriation and Compensation

--Dispute Settlement

--Performance Requirements/Incentives

--Rights to Private Ownership and Establishment

--Protection of Property Rights

--Transparency of the Regulatory System

--Efficient Capital Markets and Portfolio Investment

--Political Violence

--Corruption

--Bilateral Investment Agreements

--OPIC and Other Investment Insurance Programs

--Labor

--Foreign Trade Zones/Free Trade Zones

--Foreign Direct Investment Statistics

--Major U.S. Investment Commitments and Projects in 1997

--Intellectual Property Rights

--Singapore Government Investment Incentives

 

Chapter VIII  Trade and Project Financing

 

--Brief Description of Banking System

--Foreign Exchange Controls Affecting Trade

--Sources of Financing

--Asian Development Bank

--U.S. Banks in Singapore

 

Chapter IX    Business Travel

 

--Business Customs

--Travel Advisory and Visas

--Business Hours

--Climate

--Clothing

--Communications and Power

--Money and Currency

--Tipping

--Transportation

--Visas and Travel Documents

--Holiday Schedule

 

Chapter X     Appendices

 

Appendix A:  Country Data

Appendix B:  Domestic Economy

Appendix C:  Trade

Appendix D:  Investment Statistics

Appendix E:  U.S. and Country Contacts

Appendix F:  Market Research

Appendix G:  Trade Event Schedule

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore01 Singapore: Executive Summary <A>=Singapore

 

 

Chapter I.  Executive Summary

 

This Country Commercial Guide (CCG) presents a comprehensive look at Singapore’s commercial environment, using economic, political, and market analysis.  The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency government task force, to consolidate various reporting documents prepared for the U.S. business community.  CCGs are prepared annually by U.S. Embassies throughout the world and are the result of the combined efforts of several U.S. Government agencies.

   

Singapore is the United States' ninth largest export market largely due to its status as a transshipment point for the rest of Southeast Asia.  Beyond its important role as an entrépot, it is also one the most highly developed and sophisticated industrial, commercial, financial and consumer economies in the world and is an excellent market (and test market) for U.S. products. Singapore's role as one of the principal gateways to Southeast Asia means that most American products can find either interested local buyers or regional ones through distributors selling in other Southeast Asian countries.

 

Shipments from the U.S. accounted for about US$17.7 billion or roughly 17 percent of Singapore's total imports in 1997, consisting largely of electronic equipment, electrical machinery, aircraft and parts, process control devices, and plastics. 

Singapore is extremely dependent on foreign trade, which totalled about three times the country's GDP in 1997.  Singapore levies minimal import duties and has no real non-tariff barriers to trade.  The country's role as a regional commercial hub is underscored by the fact that about 40 percent of Singapore's total imports are re-exported.  Singapore's major exports are: petroleum products, chemicals, disk drives and electronic products.  Singapore's major imports consist of crude oil, petroleum products, electrical machinery, telecommunications equipment, office and data processing machines, general industrial machinery, transport equipment, and food.  Total trade in 1997 reached US$257 billion, of which US$132 billion was imports and US$125 billion was exports. 

 

Though the Asian financial crisis (AFC) hit the region in the fall of 1997, the impact on Singapore's fortunes was not felt until the spring of 1998 and didn't immediately affect the industrial mix of products purchased. Singapore buys a wide variety of U.S. goods both for internal consumption and for re-export.  At last count, over 1,200 American companies are domiciled in Singapore and use it as their regional headquarters for Southeast Asia, distribution center for Asia or as a manufacturing/assembly site.  Through a combination of direct representation (through subsidiaries or agents and distributors) U.S. firms market their products in neighboring countries such as Malaysia, Indonesia, Thailand, Vietnam and the Philippines.  Because of Singapore's excellent infrastructure (world's second largest port, a major airport serving 25 million passengers a year, modern telecommunications and excellent banking/financial services) and its geographical location, Singapore is a major, efficient and modern gateway to Asia.  A large portion of Singapore's exports to the U.S. are manufactured by U.S. multi-national corporations (MNCs) and consist of components or semi-finished products which are destined for further assembly in the United States. 

 

Singapore's GDP grew by 7.8 percent in 1997 and by 5.9 percent in the first quarter of 1998.  Singapore’s slower growth was due to a downturn in electronics worldwide and the worsening AFC (see "Asian Financial Crisis"). Singapore’s growth is expected to be 0.5 percent or flat throughout 1998. This decline is reflective of the effects of the AFC and subsequent lesser demand among Singapore's customers although export improvement is expected (especially to the United States) due to lower local prices, partially as a result of currency fluctuations and improved productivity. The Singapore government was quick to revise its growth projections downward and has adjusted its national spending and investment accordingly realizing that the days of 6-7 percent growth are behind them and no longer sustainable.

 

Inflation remains low and is not expected to increase substantially although many imported goods are expected to be less competitive because of higher prices due to the weakness of the Asian currencies.  Net investment commitments in manufacturing reached US$5.7 billion in 1997.  Rising business costs and maintaining Singapore's competitive position are growing concerns for Singapore businesses and policy-makers alike.  Singapore's fiscal position remains very strong, and the government maintains reserves of over US$71 billion and has no foreign debt.

 

In the past few years, Singapore Government policies and the country's excellent infrastructure have attracted major investments. Well over 1,200 U.S. companies have operations in Singapore.  Foreign investment accounted for about US$4.0 billion in Singapore in 1997. Singapore's Economic Development Board (EDB), the organization charged with attracting inward investment reports that U.S. investment in Singapore accounted for about 40 percent of total foreign investment commitments in 1997.

 

Singapore encourages investment in high value-added industries and services in an effort to overcome Singapore's heretofore chronically tight labor market and to help maintain the Republic's competitive edge. The Government also encourages local firms to expand their operations abroad in the hopes of improving market share and to offset losses due to the AFC. The Government took the lead, early, by developing industrial parks in China, India, Indonesia, and Vietnam.  It has actively encouraged other outside investors to invest in these parks, but has not seen the investment flows it initially hoped for (especially in China).

 

The Asian Financial Crisis

An unwelcome phenomenon, the AFC caught many Asian and western companies alike off-guard. South Korea and Thailand were the first to experience severe financial strains which eventually led to IMF programs and changes in government. Neighboring Malaysia experienced and is still experiencing wide fluctuations (mostly downward) of its currency.  Indonesia's rapid financial decline led to a change of the 32-year rule of the Suharto regime and the near decimation of its currency, the Rupiah, and ultimately to an IMF program. A regional commercial assistance program meant to ensure the continued flow of letters of credit in Indonesia was proposed by the Singapore government, but to date has not met with success.  This has not stopped all ASEAN countries, though, from trying to find creative ways to stave off a worsening regional recession. Due to prudent government fiscal policy, a highly developed and diversified economy and political stability, Singapore has been the least hardest hit of all in the region.  Corporate consolidation is taking place; spending restraint is being exercised in both the public and private sectors; and astute companies are finding mergers and acquisitions as one of the better pro-active means of "hedging" against competition and dwindling consumer demand. Though experts widely disagree on the length of time it will take Southeast Asia to recover, "Singapore, Inc." is not waiting. It is acting to protect the fortunes (current and present) of its 3.2 million citizens and  thousands of foreign investors.

 

Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank’s CD-ROM or via the Internet.  Please contact STAT-USA at 1-800-STAT-USA for more information.  Country Commercial Guides can be accessed via the World Wide Web address at HTTP://WWW.STAT-USA.GOV and HTTP://WWW.STATE.GOV/. They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. 

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore02 Singapore: Economic Trends and Outlook <A>=Singapore

 

 

Chapter II.  Economic Trends and Outlook

 

------------------------

Major Trends and Outlook

------------------------

 

Real GDP Growth

The Singapore economy recorded real GDP growth rates of 6.9 percent and 7.8 percent in 1996 and 1997 respectively.  A strong recovery in U.S. and European electronics demand fueled growth in 1997, countering the dampening effects of the Asian financial crisis on Singapore’s exports to the region.  (Note: Electronics accounts for 12 percent of Singapore’s GDP, consisting mainly of exports of disk

drives, semiconductors and computer parts to the U.S. and Europe.) 

 

The Singapore economy continued to post respectable growth rates of 5.9 percent and an estimated 1.9 percent in the first two quarters of 1998 respectively, even as other major Asian economies suffer from contractions in GDP.  Electronics growth momentum carried over from the second half of 1997 helped support Singapore’s relatively strong growth in the first quarter.  Higher output of chemicals resulting from previous years’ investments in capacity helped offset declining electronics production and the effects of the regional economic crisis to keep economic growth positive in the second quarter.  Thus far, the diversified nature of the Singapore economy, both in terms of activities and export markets, as well as its strong economic fundamentals and financial institutions, have cushioned it from the worst impact of the Asian economic crisis.  The commerce sector (accounting for 18 percent of GDP) has been the worst hit, with retailers, hoteliers, restauranteurs and service providers bearing the brunt of plumetting tourist arrivals from Asia, and from tighter spending by locals.  Many locals have also diverted consumption expenditure to neighboring countries to take advantage of the stronger Singapore dollar.   

 

Beyond the first half of 1998, however, the Singapore economy is expected to slow down further, with the growing probability that the second half growth rate will enter into negative territory as the Asian crisis bites deeper and harder at the economy.  Moreover, the electronics-dominated manufacturing sector, which has buffered the Singapore economy from the Asian crisis with its healthy exports to the U.S. And Europe, is experiencing the effects of a global inventory glut in disk drives and semiconductors on orders and prices. (Note: Latest official data showed 4.7 and 9.6 percent declines in electronics production in April and May.) 

 

Responding, the Singapore government announced a US$575 million off-budget package to help companies stay viable during the present lean times by reducing business costs.  Tax rebates on commercial and industrial properties, lower rentals on government-owned industrial properties, cuts in port charges, international direct dialling telephone rates and electricity tariffs, and more generous loan terms for local enterprises have been offered.  Also included in the off-budget package are plans to step-up public sector construction of the country’s educational and economic infrastructure amounting to about US$400 million, as well as US$232 million worth of tax and other initiatives to boost the property, financial services and hotel industries. 

 

Outside of manufacturing and commerce, other key sectors of the economy — construction, financial and business services, transport and communications — are still likely to grow (albeit at more modest rates), even though they are also affected by the crisis in the region.  Construction will be supported by heavy public sector infrastructural projects, offsetting the decline in private residential construction works.  The financial and business services sector, suffering from stagnant Asian Dollar Market activity as offshore lending opportunities dry up amid prospects of rising non-performing regional loans and from slackened domestic lending, is witnessing higher demand for some services which came out of the regional financial crisis - mergers and acquisitions consultancy; financial futures, stocks, and forex trading; and cash and fund management services.  Meanwhile, the communications sub-sector will continue to enjoy healthy demand for handphone, paging and internet equipment and services, following last year’s liberalization of the telecommunication industry. 

 

Although the commerce and manufacturing sectors could pull third quarter economic growth and possibly the fourth as well into negative territory (resulting in a recession as defined by two consecutive quarters of economic contractions), the Singapore economy should be able to avoid a contraction for 1998 as a whole, provided the regional crisis does not take a severe turn for the worse, especially in Malaysia with which Singapore has the closest investment, trade and financial links.  Barring this scenario and taking into account first half 1998 GDP growth of about 3.9 percent as well as prospects for third and fourth quarter modest growth in the construction, finance and business services, and transport and communications sectors of the economy, Singapore’s full year 1998 GDP growth rate should settle within the government’s revised estimate of 0.5 to 1.5 percent.  (Note: Private sector analysts generally share the government’s GDP forecast.  A minority - notably Credit Lyonnaise, Santander and the Nanyang Technological University - forecasted a contraction).

 

Manufacturing Investment Commitments

Manufacturing investment commitments in 1997 amounted to US$5.7 billion, a 5.0 percent rise over the previous year in local currency terms.  As in past years, new investments were concentrated in the electronics, industrial chemicals and petroleum industries, which accounted for 75 percent of the total.  Foreign investment commitments amounted to US$4.0 billion, or 70 percent of total manufacturing investment commitments.  The U.S. commanded a 40 percent share of total foreign investment commitments (US$1.6 billion), maintaining its position as Singapore’s most important source of new investments.  Japan was second with US$1.4 billion, or 34 percent of total foreign investment commitments.

 

The Economic Development Board (EDB), the government’s investment promotion agency, is anticipating that total manufacturing investment growth in 1998 will fall by about 6.0 percent to US$4.7 billion.  Foreign multinational companies (MNCs) are taking a more cautious stance towards the Southeast Asian region in view of the economic turmoil.  Singapore, which serves as a high-end processing base of MNCs complementing lower-end manufacturing operations in neighboring countries, and as headquarters coordinating regional procurement, production, marketing and distribution operations, is inevitably affected by the drop in investor confidence in Southeast Asia. 

 

Moreover, Japanese investment is expected to fall in response to the recession in Japan and to a weak yen which makes overseas investments more costly for Japanese firms.  Less investment funds may be also allocated by MNCs to Singapore as more acquisition opportunities in the region become available due to the Asian financial crisis.  Moreover, the depreciation of Southeast Asian currencies against the Singapore dollar has given these neighboring countries a significant cost advantage from an investment standpoint.  The ongoing relocation of lower-end industries from Singapore to regional countries could accelerate as a result.

 

Merchandise Trade

Total merchandise trade, which is 2.7 times GDP, expanded 5.7 percent in 1997 on the back of the electronics recovery in the second half of 1997 (electronics and related goods account for approximately half of Singapore’s total trade).  Based on data reported by Singapore’s Trade Development Board, merchandise exports and imports (cif basis) in 1997 amounted to US$125.0 billion and US$132.4 billion respectively.  Compared to 1996, exports expanded by 5.3 percent while imports grew by 6.2 percent.  Singapore’s trade deficit was largely attributed to an erosion in oil refining margins. (Note: Singapore is the world’s third largest oil refining center after Houston and Rotterdam.)  Its balance of services in 1997 was, however, a healthy US$17.8 billion.

Singapore’s merchandise exports went mainly to the U.S. (18 percent), Malaysia (17 percent), the European union (14 percent), Hong Kong (10 percent) and Japan (7 percent).  Imports were mainly supplied by Japan, the U.S., Malaysia and the E.U.  Indonesia, for which Singapore has not published trade statistics since the 1960s to avoid highlighting the discrepancies in trading transactions recorded by the two governments, is estimated by most analysts to be Singapore’s third largest export market.  Some 42 percent of Singapore’s merchandise exports comprised transshipments to and from regional countries, reflecting Singapore’s important role as the distribution hub and gateway to Southeast Asia.

 

Compared to the period from January to May last year, Singapore’s merchandise exports in the first five months of 1998 went up 4.0 percent to US$44.6 billion, according to data from the Singapore Trade Development Board.  Imports, on the other hand, fell 7.0 percent to US$42.1 billion.  For the year as a whole, lackluster export growth is projected as import demand for capital and consumption goods from crisis-hit Asian countries declines in tandem with their contracting economies, and as electronics exports to the U.S. and Europe become increasingly depressed by the global supply glut.      

 

Singapore’s Bilateral Trade with the U.S.

Based on U.S. Department of Commerce (USDOC) statistics, Singapore’s exports to the U.S. increased slightly from US$20.3 billion in 1996 to US$20.4 billion in 1997. Imports from the U.S. went up from US$16.7 billion in 1996 to US$17.7 billion last year.  Singapore was the U.S.’ ninth largest export market and tenth largest source of imports in 1997, down from the eighth and ninth positions which it occupied, respectively, in 1996.  Two-way trade is dominated by electronics, largely intra-company transfers of intermediate products within a regional production network set up by multinational companies to manufacture for western markets.  Between January and April 1998, Singapore’s exports to the U.S. amounted to US$6.2 billion, lowering it to the U.S.’ eleventh most important import source.  According to USDOC statistics. Singapore’s imports from the U.S. during this period amounted to US$5.1 billion, making it the U.S.’ ninth largest export market.

 

Inflation, Unemployment and the Exchange Rate

Inflation remains low (projected at below 2.0 percent for the year) due to a subdued economic climate.  Higher cost of imports from the U.S. and Europe (arising from the weaker Singapore dollar) is mitigated by cheaper imports from regional countries with weaker currencies.  Affected by the contagion of the Asian crisis, the Singapore dollar is expected to weaken against the U.S. Dollar, to an average rate of 1.70 in 1998 from the average rate of 1.48 recorded in 1997, with a concomitant rise in interest rates. (Note: According to official data, local average prime lending rates averaged 7.8 percent in the first five months of 1998, still significantly lower than the average rates in the rest of the region.)  However, based on a trade-weighted basket of currencies maintained by the Monetary Authority of Singapore (MAS), the Singapore currency has appreciated slightly since the Asian financial crisis began.

 

With the accelerated pace of industrial restructuring to high value-added manufacturing induced by the Asian economic crisis (which leads to the relocation of companies from Singapore to lower-cost countries in the region) and with the recent spate of mergers among western multinational companies (resulting in redundant positions), Singapore expects lay-offs to rise in 1998.  The reported number of laid-off workers in the first quarter of 1998 reached a record high of 7,131, exceeding the 6,717 figure recorded in the third quarter of 1985 in the middle of the last recession in Singapore.  Besides rising unemployment (the unemployment rate has been going up steadily, from 1.8 percent in September 1997, to 2.0 percent and 2.2 percent in December 1997 and March 1998 respectively), there is growing concern over the increasingly structural nature of Singapore’s unemployment, with older and less-educated retrenched workers lacking in skills required by an economy that is rapidly upgrading.  The government is working proactively with the labor unions to nip the problem in the bud, providing an additional US$11.8 million in its off-budget package to an existing US$59 million government grant for a skills redevelopment program aimed at raising the employability of less-educated and older workers by equipping them with certifiable skills.

 

------------------------

Principal Growth Sectors

------------------------

Financial & business services and manufacturing continue to be the most important sectors of the Singapore economy, accounting for 29 and 23 percent of GDP, respectively.  Commerce, contributing 18 percent to GDP, is ailing from low tourist arrivals and cautious consumer spending caused by the Asian financial crisis.  The construction sector posted the fastest sectoral growth in 1997 at 13.3 percent.  Intense public sector building activities will continue to cushion this sector in 1998 from the drastic slowdown in private sector construction activity following the crisis.  The transport and communications sectors remained vigorous, growing 9.2 percent in 1997, buoyed by growth in demand for telecommunication and internet facilities and equipment following liberalization of the industry in April 1997.

 

The electronics industry, which went through a cyclical downturn in 1996 and the first half of 1997, regained its prominent place in the economy.  It was credited for supporting the economy with its healthy exports to the U.S. and Europe in the second half of last year and the first quarter of 1998 when growth in the commerce sector declined due to the Asian financial crisis.  Electronics contributes 45 percent to total manufacturing output and approximately 12 percent of Singapore's overall GDP.  Singapore manufactures about half the world's supply of computer disk drives, and exports significant volumes of semiconductors and other computer peripherals, all of which now face a worldwide supply glut, clouding the outlook for this industry and the manufacturing sector as a whole for the rest of 1998.  Recognizing that high land and labor costs are eroding the city-state’s comparative advantage in manufacturing and to ensure that it stays ahead of lower cost production bases in the region, the government recently announced plans to expand Singapore’s manufacturing “value chain” into related services, like research and development, process engineering, testing services and market research.    

 

The financial and business services sector grew 11 percent in 1997, despite the Asian financial crisis which put a virtual end to the lucrative offshore lending business which Singapore has enjoyed. (Note: Singapore’s Asian Dollar Market was ranked by the Bank of International Settlements as the world’s eighth largest offshore lending center).  As a result of Singapore’s prominent role in syndicating offshore loans, its banks now face the prospect of rising non-performing loans (NPL) from borrowers in the battered region.  According to private sector analysts, the NPL rate of Singapore banks could rise to about 8.0 percent in 1998.  However, thanks to tight and vigilant banking supervision on the part of the Monetary Authority of Singapore (MAS), Singapore’s banks are well-capitalized and well-provisioned despite the impact of the Asian financial crisis on earnings.

 

The strong growth of the financial and business services sector was also due in part to more intense stockbrokerage and currency trading activities amid volatility caused by the Asian financial crisis. (Note: According to a 1995 survey conducted by the Bank of International Settlements, Singapore boasts the fourth largest foreign exchange market in the world.)  However, more active stockmarket trading activity was also accompanied by a fall of nearly 30 percent in share prices since the regional financial crisis began in July 1997.  As noted earlier, growth in the financial sector is also spurred by higher demand for other services following the Asian financial crisis, such as mergers and acquisitions consultancy, financial futures trading, and cash and fund management services. 

 

To nurture Singapore into an international financial center, the government recently initiated financial reforms to expand offshore banking and eventually to allow greater foreign competition in the domestic retail banking and financial services market.  It announced a reduction in the minimum cash balance requirement and higher disclosure standards for locally-based banks as well as measures to enhance local bank competitiveness.  In line with the reforms, the government also announced an additional injection of S$25 billion (about US$15 billion) of public sector funds into the private fund management market over the next three years as well as a rise in the Singapore-dollar resident lending loan limit for offshore banks to S$300 million (about US$176 million). 

 

Although the regional financial turmoil has had a negative effect on Singapore, the crisis has also enhanced Singapore’s reputation and credibility as a financial "safe haven."  To entice leading foreign financial institutions to come, broaden and deepen the range of financial products in Singapore, the MAS has tailored generous tax and other benefits to promote fund management, the bond market, unit trusts, loan and debt syndication and financial futures trading activities.  Meanwhile, the regional crisis has also induced a number of Singapore government-linked companies to expand their regional presence by acquiring or increasing their ownership stakes in other financial institutions in the region.

 

------------------------------

Government Role in the Economy

------------------------------

 

The Public Sector’s Dominant Role in the Economy

 

Although the Singapore economy is ranked by the Heritage Foundation and the Fraser Institute as the second freest in the world, the public sector is the dominant player in the economy, accounting for more than 60 percent of total GDP. The government targets growth areas in the economy, such as the financial services, electronics, trade logistics, and exhibitions and conventions industries.  Electronic commerce is also promoted by the government as a niche growth area for the Singapore economy.  Through the civil service and statutory boards, the government formulates and implements policies and strategies to guide the economy. 

 

The public sector also comprises revenue-generating statutory boards (examples include the Jurong Town Corporation, the Civil Aviation Authority of Singapore, the Post Office Savings Bank and the Housing and Development Board) as well as profitable government-linked companies (GLCs) which straddle the major sectors of the economy (examples include Singapore Airlines, Neptune Orient Lines, Development Bank of Singapore, Singapore Technologies, Keppel Corporation, Chartered Semiconductor Manufacturing, Singapore Telecom, Petrochemical Corporation of Singapore and Singapore Refining Corporation).  GLCs are commercially run as registered companies (some are listed companies in the Singapore Stock Exchange), and often include foreign equity participation.  Among the four Singapore companies which qualified as the world’s top 1,000 companies (based on market value) in a recent ranking by Business Week, three are GLCs — Singtel, Singapore Airlines and the Development Bank of Singapore.  The Government believes that GLCs also serve to balance Singapore’s heavy dependence on foreign MNCs to drive its economy.

 

Government Budget

After 10 consecutive years of budget surpluses, Singapore is projecting a deficit of US$471 million in fiscal year 1998 (April 1998 to March 1999), equivalent to about 0.5 percent of GDP after taking into account an injection of US$1.2 billion in recently-announced off-budget measures to support the slowing economy. Despite calls from businesses and the citizenry for stronger pump-priming measures, the government’s budget stays the course, with a focus on sharpening the country’s long-term economic competitiveness.  There were no tax cuts to stimulate the economy weakened by the Asian financial crisis.  The corporate tax rate and the highest individual income tax remain at 26 percent and 28 percent respectively. Moreover, a 10 percent tax rebate for citizens has been reduced to 5.0 percent in 1998.  The major share of the budget (69 percent) goes to economic and infrastructural development, education, and defense.  Spending on these areas will increase by 11.4 percent, 28.6 percent and 14 percent respectively, as compared to the previous year.

 

Balance of Payments Situation

Singapore’s balance of payments recorded a healthy surplus of US$8.0 billion in 1997, compared to US$7.4 billion in 1996.  Strong export of services has supplemented modest merchandise trade balances to achieve healthy current account surpluses of US$14.7 billion and US$10.9 billion in the last two years respectively.  The balance of services, however, turned negative in the first quarter of 1998, reflecting the service industry’s exposure to the regional crisis and a reclassification of ship repair, bunkering activities and the provision of ship and aircraft stores under the goods account (in line with the fifth edition of the IMF’s balance of payments manual).  Singapore’s negative capital and financial account balance is mostly attributed to portfolio investment outflows which more than offset direct investment inflows.

 

Total official foreign reserves amounted to US$71.4 billion at the end of 1997, sufficient to pay for 7.3 months of imports.  (Note: In local currency terms, Singapore’s official foreign reserves increased by 3.5 percent between end-June 1997 and end-December 1997.  However, the U.S. Dollar valuation of Singapore’s reserves have declined by about US$10 billion due to a 17 percent depreciation of the Singapore dollar against the greenback during the period.)  Total official foreign reserves went up to US$74.7 billion at the end of the first quarter of 1998.

 

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Infrastructure

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With the interests of business in mind, Singapore has forged an infrastructure on par with that of many developed nations. Singapore has reliable and sophisticated networks for telecommunications, transportation and utilities.

 

Singapore has a highly developed telecommunications infrastructure.  The phone line penetration rate rivals that of developed countries.  About a quarter of Singaporeans have mobile phones and almost half own pagers.  To promote the growth of information industries, Singapore is constructing a multimedia broadband network that will encompass the entire island.

 

Singapore's transportation network is efficient and modern.  Its port competes with Hong Kong's for the title of world's busiest port.  Singapore's airport is considered among the best in the world.  The road system is well maintained and congestion is managed through the use of road pricing schemes and a quota on the vehicle population (Note: Singapore will be implementing an electronic road pricing system from August 1998.)  The public transportation system, which includes an efficient metro system, provides island-wide coverage for a reasonable price. 

 

The utilities networks provide reliable services.  Health, safety and building codes have become increasingly strict over the years and provide adequate protection.

 

Singapore's Efforts to Address the Year 2000 (Y2K) Problem

Government agencies and statutory boards are currently addressing the Y2K threat. They have until March 1999 to make their systems Y2K compliant and have them fully tested.  Some ministries have already completed their debugging work.

 

The MAS requires all banks and financial institutions to implement solutions to Y2K problems in their systems by the end of 1998.  Likewise, the Telecommunications Authority of Singapore (TAS) requires telecoms firms in Singapore to implement comprehensive Y2K solutions.

 

Many of Singapore's largest companies are also working to debug their systems. Singapore Airlines said it has almost completed its debugging work. Singapore Telecom said that, because more than half of its systems were affected, it began debugging in 1996.

The National Computer Board (NCB) offers grants to Small and Medium Enterprises (SMEs) to assist them in eradicating the millennium problem.  Initially, NCB offered to pay for up to 70 percent of the cost of consultation fees for firms that applied by the end of 1997 and up to 50 percent for those that applied before 2000.  However, only 71 of Singapore's 91,000 SMEs had applied by mid-1998.  As a result, the NCB extended its 70 percent grant until the end of 1999. The distraction of the economic crisis and ignorance of the Y2K problem were blamed for the feeble response.

 

Key Economic Indicators     1996      1997      1998

 ----

             

Real GDP at 1990 Market Prices  

(US$ billion)              77.7     79.5     17.6

Real GDP Growth Rate (%)    

(year-on-year)               6.9       7.8       5.9

   Manufacturing            3.0       4.3       6.1

   Financial &

      Business Services      7.8      11.0      6.3

   Commerce                  6.2       5.8       1.2

   Transport & Communications     8.1       9.2       6.1

   Construction             19.5     13.3     10.8

Manufacturing Net Investment

  Commitments (US$ billion)  5.7      5.7       1.2

     From the U.S.           1.6       1.6       0.5

Merchandise trade (US$ billion)

     Exports                 125.0     125.0     27.6

      Imports                131.3     132.4     26.7

     Exports to

      U.S. (USDOC data)      20.3     20.4       4.5

      Imports from

       U.S.(USDOC data)     16.7     17.7        3.9

Average Unemployment Rate (%)     2.0      1.8         2.2

Labor Productivity

      Growth Rate (%)        0.6       1.6     -0.3

Increase in CPI (%)           1.4       2.0       1.1

Money Supply Growth, M2 (%)  9.8     10.3      9.4

Balance of

 payments (US$ billion)      7.4       8.0       0.2

 Trade Balance               2.2       1.1       2.6

 Balance of Services        10.6     10.9     -0.3

 Current Account Balance          14.7     10.9       2.7

Capital and Financial Account     -2.6     -4.7     -7.7

  Net Errors and Omissions   -4.8     -2.1       5.1

Official Foreign Reserves

(US$ billion)               77.0     71.4     74.7

Government Budget Surplus/Deficit

(US$ billion)               2.8      -0.5       ---

Average Exchange

 Rate (S$ per US$)           1.41      1.48      1.68

 

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore03 Singapore: Political Environment <A>=Singapore

 

 

Chapter III.  Political Environment

 

Singapore is a parliamentary republic that prides itself on political stability and the predictability this offers to foreign investors and traders.  Following independence in 1965, the country's basic economic strategy was molded by former Prime Minister Lee Kuan Yew, who stepped aside in November 1990 after 34 years on the job.

 

The Government's policies have changed little under his successor, 56-year-old Goh Chok Tong.  Singapore's political leadership remains dedicated to free-market principles and to maintaining a first-rate infrastructure and skilled labor force.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore04 Singapore: Marketing U.S. Products and Services <A>=Singapore

 

 

Chapter IV.  Marketing U.S. Products and Services

 

Distribution and Sales Channels

Singapore's distribution and sales channels are simple and direct.  Most consumer goods are imported by stocking distributors who resell to retailers.  Some goods are imported directly for sale in the importer's own retail outlets.  Depending on the type of product, importer mark-ups range from 20-40 percent, while retail mark-ups are often more than 100 percent.  Industrial goods are brought in by stocking distributors, who add on at least 20 percent before sale to end-users, or by agents whose commissions generally run about 7-10 percent.  These mark-ups are approximate, and will vary widely, depending on the product and the contractual relationship in question. 

 

Use of Agents and Distributors:  Finding a Partner

Many American exporters use agents or distributors to serve the Singapore market and other markets in the rest of Southeast Asia.  Finding prospective partners presents no problem. Singapore firms are aggressive when it comes to representing new products and usually respond enthusiastically to new opportunities. Most American companies that use U.S. & Foreign Commercial Service (USFCS Singapore) business programs in Singapore find several interested agents or distributors. USFCS Singapore offers a wide range of business programs and has an excellent record of success in introducing U.S. firms to the market.

 

Franchising

Franchising is growing in popularity.  Many cash-rich Singaporean firms are looking for new growth opportunities and are interested in American franchise concepts.  Franchisees usually buy franchise licenses for the Southeast Asian region and not for Singapore alone.  Most franchisees finance their purchases of franchises through bank loans, personal savings or pooling resources from family members.  See the “Best Prospects” section in Chapter V for details on the franchising sector in Singapore.

 

Direct Marketing

The direct marketing industry in Singapore began about 12 years ago and now includes direct mail, telemarketing and television sales.  Direct marketing through television began four years ago and is growing very fast.  There are many creative consultants in Singapore, each employing 10-20 employees, who provide advice, market research, mailing lists, printing and mailing services.  Several companies provide telemarketing services and are involved in direct marketing through television.  Typical products sold through direct marketing in Singapore include consumer goods such as gifts, cosmetics, health supplements, stationery, fitness equipment, household appliances, bags and accessories.  Items that cost less than US$50 are popular and prices rarely exceed US$200 per item.

 

Joint Ventures/Licensing

Most Singapore companies are open to joint venture proposals, and many are interested in manufacturing under license.  USFCS Singapore is active in matching American and Singapore firms for joint ventures not only in Singapore but also in the rest of Southeast Asia.

 

Steps to Establishing an Office

The Singapore Registry of Companies and Businesses publishes an excellent guide that walks the first time registrant through the process of establishing an office.  The process takes about one day for a sole proprietorship, while more complex business entities can take up to six weeks and will require the assistance of lawyers and accountants to help with incorporation documents.  One point to bear in mind is that registration of a company does not automatically mean that expatriate staff can be assigned to Singapore.  Foreign staff must obtain an employment pass from the Immigration Department. 

 

Selling Factors and Techniques

Price, quality and service are the main selling factors in Singapore. Prospective exporters to Singapore should be aware that competition is strong and that buyers expect good after-sales service.  Selling techniques vary according to the industry or product involved, but are comparable to the techniques used in any other sophisticated market.

 

Advertising and Trade Promotion

There are many specialized trade magazines in Singapore and scores of trade fairs that can be used to promote U.S. goods and services.  The major English-language daily newspapers are the Straits Times and the Business Times.  The leading business magazine is Singapore Business.  The major Chinese daily is Lian He Zao Bao.  Contact USFCS Singapore for a list of specialized trade magazines and trade fairs.

 

Pricing Product

Pricing is very competitive.  Major department stores and retail chains offer fixed-price merchandise, while the smaller shops expect buyers to bargain.  Hard bargaining is common in the commercial and industrial sectors as well, where buyers usually want a discount and vendors inflate their initial offers accordingly.  Credit terms of 30-60-90 days are common.  Buyers will often retain 10 percent of the sales price for major electronic equipment purchases until the vendor has installed the machine and it is performing according to specifications.

 

Sales Service/Customer Support

Good sales and customer support are vital in Singapore.  The market is so price competitive that good sales support or customer service can make a big difference.  Singapore distributors respond well to training on new products and if properly supported by the U.S. manufacturer will do a good job cultivating old customers and developing new ones. 

 

Selling to the Government

U.S. firms generally find Singapore to be a receptive, open and lucrative market. The Singaporean government procurement system is considered by most American firms to be fair and transparent.  Bidders must meet the specifications set out in the tender and offer the lowest price in order to be successful. Government procurement regulations are contained in Instruction Manual 3, available from the Ministry of Finance or through CS Singapore. The Singapore Government also advertises its tenders on their web-site page, http://www.obelisk.nmi.net.sg/gitis/index.html. 

 

Protecting your Product from IPR Infringement

Enforcement of relevant copyright laws is left largely to private industry, so small U.S. firms are advised to join trade associations to protect their interests if they cannot afford to hire specialized Singaporean IPR firms.  Large corporations and business associations such as the Business Software Alliance and the Software Publishers Association spend large sums of money investigating and prosecuting software pirates in Singapore.  The software piracy rate in Singapore increased by 11 percent in 1996, while the piracy rate in most other Asian markets continued to decrease.  Industry organizations estimate that 59 percent of all software in Singapore is pirated.

 

Need for a Local Attorney

U.S. and other foreign law firms are not allowed to practice law in Singapore. Legal matters involving Singapore law must be handled by a local attorney.  A list of local law firms is available through USFCS Singapore. 

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore05 Singapore: Leading Sectors for U.S. Exports & Investments <A>=Singapore

 

Chapter V.  Leading Sectors for U.S. Exports and Investment

 

Best Prospects for Non-Agricultural Goods and Services

(All figures are US$Millions)

 

1 - Aircraft and Parts (AIR)

 

Singapore’s aerospace industry has been growing steadily through the years. The industry is currently experiencing strong growth, riding on the growing demand in the Asia-Pacific for Repair and Overhaul (R&O) services. In 1997, the industry output reached S$1.84 billion. R&O operations accounted for about 87.3 percent of the 1997 industry output. Manufacturing accounted for the remaining 12.7 percent, having grown a healthy 16.3 percent in 1997.

 

Singapore has the most comprehensive and competitive R&O sector in the Asia-Pacific. It has capabilities ranging from simple module overhaul and exchange for small aero-engines, to highly sophisticated component repair for large commercial engines, as well as maintenance of small general aviation aircraft and business jets, to regional large wide-body jetliners. There is also a comprehensive avionics repair and overhaul cluster.  At present, aerospace manufacturing in Singapore comprises mainly the production of precision sub-assemblies and components.

 

Asia is expected to lead the growth in the world air travel market in the long term despite its economic crisis. The region is expected to receive 35 percent of the global aircraft deliveries over the next 10-20 years.

 

In May 1998, Singapore Airlines (SIA) announced the purchase of ten A340-500s from Airbus Industries. These super long-range aircraft will enable SIA to ply non-stop routes from Singapore to destinations such as Los Angeles and San Francisco. This latest order by SIA was made even before the entire fleet of 77 B-777s it purchased last year could complete its delivery scheduled to last till 2004. SIA is expected to make yet another decision on a new short-haul wide-body aircraft (either a B767-200/300 or an A330) to replace its A310 fleet by the end of 1998.

                              1996      1997      1998

 

A.Total Market Size           2612      3486      3815

B.Total Local Production       140      1243      1360

C.Total Exports                539       588       644    

D.Total Imports               3011      2831      3098

E.Imports from the U.S.       2006      1811      1983

F.Exchange Rate               1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

2 - Industry Process Control (IPC)

 

Manufacturing has been a fundamental driving force for the Singapore economy for the past thirty years. The Singapore Government’s new strategy, Industry 21, is aimed at widening the manufacturing sector’s focus to include manufacturing services. This plan is committed to expand the manufacturing value chain into related services like research and development, process engineering, testing services and market research.

 

This strategy hopes to double manufacturing services’ share in Singapore’s Gross Domestic Product to 6.0 percent by 2010. There will, therefore, be good opportunities for American firms to supply instrumentation and control test equipment and services for sectors in the petrochemical, polymers, petroleum and food processing industries.

                             1996      1997      1998

 

A. Total Market Size         1326      1491      1594

B. Total Local Production    380       424       460

C. Total Exports             892       937       972

D. Total Imports             1835      2004      2106

E. Imports from U.S.         877       970       1103

F. Exchange Rate             1.41      1.48      1.70

The above statistics are unofficial

 

3 - Electronic Components (ELC)

Despite the Asian currency crisis and the global electronics slowdown in 1997, the electronics sector’s output remained strong constituting 52.8 percent share of Singapore’s total manufacturing output. In 1997, the sector’s output was US$43 billion and the sector employed 127,700 personnel. The current slowdown in Asian economies will have an impact on the global and Asian electronics markets. This impact will affect the short term growth rate but not its long term growth potential. Growth for 1998 will be weak as regional demand has slowed down substantially. In addition, other factors such as falling prices, global excess capacity and inventory levels of electronic components will have a dampening impact for this sector. However, strong demand from the U.S. and Europe will bring some positive relief to the sector’s performance.

 

It is projected that the sector will see some form of recovery in two to three years’ time. It has been estimated that higher output will arise from printers, printed circuit board assemblies and semiconductors while the output for disk drives and consumer electronics will be moderated. There are good opportunities for American companies to sell their products to Singapore and through Singapore to the Asian region.

 

                             1996      1997      1998

A. Total Market Size         11169     11011     10785

B. Total Local Production    9901      10611     10912

C. Total Exports             19751     20588     20748

D. Total Imports             21019     20988     20621

E. Imports from U.S.         3744      4000      4120

F. Exchange Rate             1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

4 - Construction Equipment (CON)

 

Among all sectors in the Singapore economy, the construction industry stood out with a strong annual growth of more than 10 percent in 1997. The outstanding annual growth was mainly driven by healthy growths in public and private residential construction activities and public civil engineering works. In all, a total of US$14.86 billion worth of contracts was awarded in 1997. The construction industry’s share of GDP reached more than 8.0 percent for 1997.

 

Although regional economies are expected to slow down as a result of the financial turmoil, the Singapore construction industry, being mainly domestically oriented, is likely to be sheltered from regional developments. Construction demand is expected to continue to register a positive growth in 1998, in particular, the public sector which is expected to account for 60 percent of the total construction demand. Both the public and private sectors are expected to award US$15 billion worth of projects to meet the local construction demand in 1998. Furthermore, taking into consideration the volume of contracts awarded in 1997, construction output is expected to carry its double-digit growth momentum into 1998.

 

Apart from participating in local construction activities, Singapore contractors are also active in clinching projects in the Asia-Pacific region. Over the next two years, the total construction volume for Asia is estimated to be US$1.4 trillion, annually. Both local and foreign contractors can therefore look forward to tremendous opportunities in securing important contracts in the region.

 

The CIDB estimates that from 1999 until the year 2000, the public sector is expected to award more than US$7.14 billion worth of contracts each year. With the Government’s commitment to provide world-class infrastructure, contracts for civil engineering projects are expected to remain at around US$3-4 billion per year. Private sector construction demand is also expected to reach US$3.5-4.0 billion for 1999-2000. The buoyancy of the construction demand will depend on the overall performance of the economy.

 

Based on the above projections, the outlook for the construction industry in 1998-2000 is certainly very encouraging. This means that there is still a tremendous scope for the supply of construction and earthmoving equipment to the local construction industry. This is particularly so because there is no domestic production of construction equipment and there is minimal local assembly, such that the market is dominated by imports.

  

                              1996      1997      1998

 

A.Total Market Size            861      1090      1193    

B.Total Local Production       312       302       330    

C.Total Exports               1132      1156      1265    

D.Total Imports               1681      1944      2128    

E.Imports from the U.S.        708       846       925    

F.Exchange Rate               1.41      1.48      1.70         

 

The above statistics are unofficial estimates.

 

5 - Electronic Industry Production/Testing Equipment (EIP)

 

Despite the slowdown in Singapore’s electronics sector, investments by foreign multinational corporations for this sector in 1997 was estimated at US$2.5 billion, an increase of about 12 percent over 1996. The Singapore Government has been aggressively attracting investments in wafer fabrication facilities. It is projected that by 2003, there will be nearly 10 wafer plants producing wafers at 0.25 micron and above, giving plenty of room for linewidth shrinks. There are good opportunities for equipment suppliers in this area.

 

In addition, the Singapore Government is also committed to nurturing world-class science and technology capabilities to spur growth in new high value-added industries. A total of US$2.5 billion has been budgeted to promote research and development over the next five years. This will mean good opportunities for American firms to supply equipment, materials and services to current and future facilities.

 

                             1996      1997      1998

 

A. Total Market Size         2056      2030      2005

B. Total Local Production    938       942       940

C. Total Exports             1746      1804      1843

D. Total Imports             2864      2892      2908

E. Imports from U.S.         980       1009      1044

F. Exchange Rate             1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

6 - Building Products (BLD)

 

Based on anticipated demand, Singapore=s construction industry should see a total of US$15 billion worth of projects awarded by both the public and private sectors in 1998. The public sector is expected to sign US$9.0 billion worth of contracts, which is about 60 percent of the total construction demand for 1998.

 

Residential projects will continue to account for the bulk of building works in both the public and private sectors. Total value of both sectors residential projects is expected to reach US$5.4 billion. While commercial and construction demands are expected to gear to a tune of US$1.43 billion and US$2.07 billion respectively. About US$1.86 billion worth of institutional and other building contracts are expected to be awarded by both the public and private sectors. Civil engineering projects for both the public and private sectors are projected to increase by 34 percent to slightly over US$4.29 billion in 1998.

 

Between 1999 and 2000, the Government of Singapore is expected to invest heavily in infrastructural improvements, with civil engineering projects reaching some US$3-4 billion a year. Private sector construction demand is also expected to reach US$3.5-4 billion in the same two years. These developments will provide great opportunities for U.S. firms to supply building materials to the Singapore construction industry, especially state-of-art building products.

 

                             1996      1997      1998

 

A.Total Market Size          3555      2965      3245

B.Total Local Production     731       660       723

C.Total Exports              1519      1749      1914

D.Total Imports              4343      4053      4437      

E.Imports from the U.S.      210       260       285 

F.Exchange Rate              1.41      1.48      1.70     

 

The above statistics are unofficial estimates.

 

7- Medical Equipment (MED)

 

The medical devices market is estimated to grow by 5.0 percent between 1998 and 1999 with ongoing development of new public and private hospitals, specialized centers and upgrading of existing public hospitals.  The U.S. accounts for 32 percent of the import market share.  There is potential for growth for U.S. exporters in operating room equipment, devices for critical care, wound care, patient care, devices for cardiology and oncology, and furniture and fittings for new hospitals.  The Singapore government is encouraging local and foreign manufacturers to use Singapore as a base for development of OEM and ODM capabilities for the medical devices industry.  Regional demand for refurbished equipment has increased due to the current economic downturn. 

 

                             1996      1997      1998

 

A. Total Market Size         342       396       410

B. Total Local Production    542       588       623

C. Total Exports             640       702       743 

D. Total Imports             440       510       530 

E. Total Imp. from U.S.      158       166       173 

F. Exchange Rate             1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

8 - Pumps, Valves, Compressors (PVS)

 

The major projects under development in Singapore such as the Jurong Petrochemical island complex, the Tuas Power station, and the port development will continue to generate demand for pumps, valves and compressors. Growth in this sector has been revised downwards due to the regional economic turmoil. Approximately 70 percent of total imports are re-exported to the region. Currently, demand from the region comes mainly from the state-owned petroleum refineries.  The proposed 480-kilometer gas pipeline from West Natuna (Indonesia) to Singapore, to be completed by end of year 2000, will boost demand in the next three years.  Equipment incorporating newer technologies will have market potential.

 

                             1996      1997      1998

 

A.Total Market Size          978       859       835 

B.Total Local Production     477       418       410 

C.Total Exports              863       822       800 

D.Total Imports              1364      1263      1225

E.Imports from the U.S.      329       364       362 

F.Exchange Rate              1.41      1.48      1.70

 

The above statistics are unofficial

 

9 - Laboratory & Scientific Instruments (LAB)

 

Singapore’s gross expenditure on research and development (R&D) in 1997 was USD 1.14 billion, up 6.0 percent from 1996.  The private manufacturing sector accounted for 66 percent of the expenditure.  The regional economic crisis is expected to slow down some R&D investments but the Singapore government is assisting companies facing financial difficulties to restructure their R&D programs.  Government spending has not been reduced but decreased demand is expected from overseas as 40 percent of the laboratory and scientific equipment is re-exported to neighboring countries.

 

                             1996      1997      1998

 

A. Total Market Size         1043      950       920 

B. Total Local Production    305      260       243 

C. Total Exports             641      580       568 

D. Total Imports             1379      1270      1245

E. Total Imp. from U.S.      637      581       570 

F. Exchange Rate             1.41     1.48      1.70

 

The above statistics are unofficial estimates.

 

10 - Electric Power Systems (ELP)

 

Singapore’s power generating market is expected to grow steadily with the first phase of the Tuas 4,800 MW project currently under construction. The pre-qualification tender for the second phase which is for the building of a combined cycle plant has been announced.  PowerSeraya is studying the repowering of its Jurong Power Station through the installation of new combined cycle plants of 810 MW capacity.  SembCorp announced that it will build a 700 MW power station on Jurong Island by late 2000 or early 2001.  Capital investments and expenditure on repairs and maintenance will provide a steady demand for power generation equipment in the next two years.  However, with the regional economic crisis, demand from regional end-users is expected to be drastically reduced.  The most promising sectors include turbines, boilers, switchgears, cables and high voltage equipment.

  

                             1996      1997      1998

 

A.Total Market Size          945       975       946 

B.Total Local Production     471       485       470 

C.Total Exports              1154      1188      1152

D.Total Imports              1628      1678      1628

E.Imports from the U.S.      1159      1194      955 

F.Exchange Rate              1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

11 - Pollution Control Equipment (POL)

 

Projects currently under implementation include upgrading of sewage treatment works, landfill and an incineration plant, all of which will be completed by end of 1999.  Projects that are being studied include the deep tunnel sewerage system and a fifth incineration plant.  In addition, the development of a group of offshore islands into an integrated chemical island will see strong demand for environmental control technology in the next five years.  However, due to the economic crisis, all new environmental projects have been delayed and will be reviewed again at the beginning of 1999.  Regional demand is negative due to the crisis.

 

The Ministry of Environment (ENV) is the authority on environmental matters and is the prime mover of environmental projects.  ENV has set up two private companies called SEMES to provide consultancy services and SEMAC to provide refuse collection and treatment of solid waste. SEMAC will face competition from April 1999 as other companies will then be able to bid for refuse collection contracts.

 

                             1996      1997      1998

 

A.Total Market Size          579       580       405 

B.Total Local Production     111       113       80  

C.Total Exports              259       273       195 

D.Total Imports              727       740       520 

E.Imports from the U.S.      231       236       180 

F.Exchange Rate              1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

12 - Telecommunication Equipment (TEL)

 

The Singapore government is striving to build an information superhighway infrastructure to link every office, home, and government agency through a nationwide multimedia network called Singapore ONE (one network for everyone). The Singapore ONE project which was launched in June 1997 runs on an Asynchronous Transfer Mode (ATM) optical fiber network. Singapore ONE’s ATM backbone will connect to local access networks that use advanced technologies such as hybrid fiber coaxial (HFC) cable and Asymmetric Digital Subscriber Line (ADSL) to maintain broadband performance. By the year 2000, all of Singapore will be linked by 300,000 kilometers of fiber.

 

The Singapore Government’s move to progressively liberalize and deregulate the telecommunications industry will stimulate demand and create opportunities for U.S. firms to sell and invest in a market where the indigenous manufacturing industry is small, with little scope for expansion.  In April 1998, the government announced the award of a second public basic telecommunication services licence and a third mobile phone licence that would start operations in April 2000.  The successful consortium (that was awarded both the fixed line and cellular licence) plans to invest US$1.1 billion in fixed line infrastructure (including an extensive fiber network) and US$285 million in a mobile phone network.  Singapore is also a major distribution center of telecommunication products as more than one-half of all such imports (including those from the U.S.) are re-exported to third countries. Promising subsectors include switching and transmission equipment, fiber optics and wireless communications equipment.

 

                              1996      1997      1998

 

A.Total Market Size           1254      1672      1118

B.Total Local Production      2277      2289      1968

C.Total Exports               4067      4079      3348    

D.Total Imports              3043      3462      2498    

E.Imports from the U.S.        429       508       316

F.Exchange Rate               1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

13 - Franchising (FRA)

 

Singapore is an attractive market for franchise concepts.  Its indigenous industry is small and cash-rich Singapore firms and individuals are constantly looking for new growth opportunities and are interested in investing in franchise concepts.  The country’s rapid economic growth over the past 10 years has resulted in an affluent economy with a per capita income of over US$26,000.  The Singapore Government program to promote the country as a franchising hub will also help U.S. franchisors.  The U.S. is by far the largest supplier of foreign franchise concepts in Singapore and the potential for more U.S. franchisors to enter the market is excellent. Singapore is also a showcase and a good pilot project site for franchisors interested in entering the ASEAN region. Most promising subsectors include children-related franchises and food-related franchises.

                              1996      1997      1998

 

A.Total Sales                 3000      3036      2774

B.Sales by Local Firms        300       304       278

C.Foreign Sales by Local Firms    30      31        28

D.Sales by Foreign-owned Firms 2730   2763     2524

E.Imports from the U.S.       2460      2493      2271

F.Exchange Rate               1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

14 - Computer Hardware and Peripherals (CPT)

 

The Singapore government’s push to turn the country into an intelligent island early in the next century will boost the demand for computer hardware and peripherals in Singapore. The Government alone is expected to spend US$235 million on information technology for 1998. American products are well received here as the United States is viewed as the most important source of state-of-the-art computer technologies and products. Total market is much smaller than total imports as Singapore is a major trading center for information technology products; more than two-thirds of Singapore’s imports of information technology products (including those from the U.S.) are re-exported to third countries. Most promising subsectors include networking equipment, multi-media systems and PCs.

 

                              1996      1997      1998

 

A.Total Market Size           2191      2258      1137

B.Total Local Production     18730     18362    15246

C.Total Exports              23046    23276    19377

D.Total Imports              6508     7172     5268

E.Imports from the U.S.        936      1093       828

F.Exchange Rate               1.41      1.48      1.70

 

The above statistics are unofficial estimates.

 

Best Prospects for Agricultural Goods and Services

 

The following agricultural sectors offer the best prospects for increased U.S. agricultural exports to Singapore.

Dairy Products

PS & D: 022/023/024

 

Due its close geographical proximity, Australia and New Zealand dominate the dairy market in Singapore.  Fresh milk is airlifted from Australia and New Zealand and sold in all major retail outlets.  However, with increasing affluence and the fact that more and more Singaporeans have been exposed to newer and different foods while traveling abroad, significant inroads have been made by U.S. dairy products like milk and cheese.  There is also significant market potential for bulk dry milk powder for re-packing into consumer size packs.  The re-packed milk powder is distributed to emerging markets in Asia by Singapore traders.  

 

Cheese from the U.S. comprised about 10 percent of the Singapore market for cheese.   However, there continues to be a local preference for cheddar cheese from Australia and New Zealand.  Ice cream from the U.S. is rapidly gaining market share. There have been an increasing number of U.S. brands being introduced into the Singapore market over the last five years.

 

                             1996      1997      1998

 

A.   Total Market Size            227       232       229

B.   Total Local Production       0         0         0   

C.   Total Exports                118       105       104

D.   Total Imports                345       337       332

E.   Imports from the U.S.        14        15        16

F.   Exchange Rate                1.41      1.48      1.70

 

Fresh VegetablesPS&D Code: 054Singapore with one of the highest per capita incomes in the world, combined with a large influx of tourists, is a natural target market for western temperate vegetables.  In addition, the 20,000 expatriates from the E.U., Japan and the U.S. who work in Singapore are regular consumers of  temperate vegetables like broccoli, asparagus, celery and lettuce.

 

The food service industry also consumes large volumes of temperate vegetables. However, the main suppliers for temperate vegetables are Australia, New Zealand and Holland.  One advantage which Australian suppliers have over the U.S. is the very competitive airfreight rates between Australia and Singapore.

                                                              1996 1997                                  1998

 

A.   Total Market Size            138       126       122

B.   Total Local Production       0         0         0

C.   Total Exports                99        84        77

D.   Total Imports                237       210       200

E.   Imports from the U.S.        11        18        18

F.   Exchange Rate                1.41      1.48      1.70

 

Fruit Preserved & Preps

PS &D Code 058

 

The Singapore consumer rates U.S. brands highly.  In addition, Singapore households are prepared to pay a little more for quality products from the U.S. and the E.U.  Good prospects are seen in jams, peanut butter, canned and preserved fruit. The U.S. is a major supplier of canned fruit cocktail and peaches.  However other suppliers like Australia and South Africa are slowly gaining market share.  In the peanut butter category, several leading U.S. brands like Planters, Skippys, Peter Pan are regular items on all retail outlets. In addition, there is considerable demand in the baking industry for institutional size packaging of preserved cherries, blueberries and other preserved fruit.

 

                             1996      1997      1998

 

A.   Total Market Size            47        46        45

B.   Total Local Production       18        18        18

C.   Total Exports                66        57        57

D.   Total Imports                95        85        85

E.   Imports from the U.S.        17        17        17

F.   Exchange Rate                1.41      1.48      1.70

 

 

Fruit & Nut, fresh and driedPS& D Code: 057

 

Fresh fruit imports form one of the main categories of agricultural imports in this country.  The U.S. is a major supplier of apples, oranges, pears, pitted fruit and raisins. Competitor countries include Australia, New Zealand, China, Brazil and Chile.  One advantage that the U.S. has is the fact that its only major competitor in the Northern Hemisphere is China.  The other competitor countries like Australia and New Zealand have seasons opposite those of the U.S.

 

Singapore also re-exports a significant amount of fresh and dried fruit to the other Southeast Asian countries.  The recent financial turmoil has resulted in a reduced import volume due to the sharp curtailment of the surrounding export markets.

 

                        1996      1997      1998

 

A.   Total Market Size       214       209       198

B.   Total Local Production  0         0         0   

C.   Total Exports           171       148       136

D.   Total Imports           385       357       334

E.   Imports from the U.S.   81        77        72

F.   Exchange Rate           1.41      1.48      1.70

 

Significant Investment Opportunities

Foreign investment continues to pour into Singapore, much of it targeted on both Singapore and the other booming economies of Southeast Asia.  Petroleum, electronics and computer manufacturing, aerospace equipment and services, telecommunications and financial services head the list, but opportunities abound as well in shipping, pharmaceuticals, franchising and regional distribution of food and consumer goods.  Singapore's own firms are aggressively pursuing regional opportunities in hotel and property development, light manufacturing, air transportation and telecommunications.  They are usually very receptive to joint venture proposals from American firms and, especially in the case of the government-linked companies, are good business partners who can offer excellent regional contacts and access to capital.  American companies considering an investment in Singapore or the region should contact USFCS Singapore for advice and assistance.

 

The Government of the United States acknowledges the contribution that foreign direct investment makes to the U.S. economy.  U.S. foreign direct investment is increasingly being viewed as a complement or even a necessary component of foreign trade.  For example, roughly 60 percent of U.S. exports are sold by American firms that have operations abroad.  Recognizing the benefits that U.S. outward investment brings to the U.S. economy, the Government of the United States undertakes initiatives, such as Overseas Private Investment Corporation (OPIC) programs, investment treaty negotiations and business facilitation programs that support U.S. investors.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore06 Singapore: Trade Regulations & Standards <A>=Singapore

 

 

Chapter VI.  Trade Regulations and Standards

 

Trade Barriers

Singapore has very few trade barriers.  There are restrictions in a few sectors, including legal services, banking services, some telecommunications services, professional engineering services and trade in tobacco products.  However, the Government is slowly allowing more freedom for market forces in the economy, as can be seen in its plan to privatize the telecommunications and public utilities industries.  It has also announced that it will relax its regulations on professional engineering services.  In the area of intellectual property rights, the Singapore Government does have laws to protect against piracy and copyright infringement, but it relies on the private sector to take the lead against transgressors.  In general, Singapore maintains one of the most liberal trading regimes in the world.

Customs Valuations

In Singapore, valuation for Customs purposes is based on the Brussels Definition of Value (BDV).  The basic principle of the BDV is that dutiable value is the normal price or import price of goods at the port or place of importation.  It pre-supposes that the sale has taken place in the open market between an independent buyer and seller.

 

Where goods are dutiable, ad valorem or specific rates may be applied.  An ad valorem rate, which is the most commonly applied, is a percentage of the assessed value of the imported goods.  A specific rate is a particular amount per unit of weight or other quantity.

 

Cost, insurance, freight, handling charges and all other charges incidental to the sale and delivery of the goods are taken into account when duty is assessed.

 

Exporters are required to ensure that the declared values of goods for Customs purposes are correct.  If the goods have been undervalued, the Customs and Excise Department will increase the values declared.  Severe penalties may be imposed on traders attempting to evade duty.

 

Import Licenses

Companies must make an inward declaration for all goods imported into Singapore. Most goods can be imported freely without licenses. The import of a few items such as lighters in the shape of pistols or revolvers, toy currency notes, toy coins and fire crackers is prohibited. Generally, the import of goods which the government says pose a threat to health, security, safety and social decency are controlled.  Import licenses are required for pharmaceuticals, hazardous chemicals, films, arms and ammunition. Companies that want to import controlled items into Singapore must apply for licenses from the appropriate government agencies.

 

Export Controls

Companies must make an outward declaration to export or re-export their goods out of Singapore. Except for selected items, there are very few controls on exports of goods from Singapore. Quantitative restrictions exist for certain textiles and garments to Canada, EU countries and the U.S.  Items such as rubber, timber, granite and chlorofluorocarbons are subject to export control and licensing. Items under export control must be endorsed or licensed by the appropriate government agencies before they can be exported.

 

Import/Export Documentation

When goods enter or leave Singapore, companies must submit their inward or outward declarations to the Controller of Imports & Exports.  Singapore has introduced an electronic trade documentation system called Tradenet to facilitate import/export documentation. The system ensures that goods moving into and out of Singapore are processed with minimum delay.  Through Tradenet, subscribers can have their import and export declarations processed electronically with government agencies and local as well as overseas trading partners.  Companies importing and exporting goods in Singapore need to contact the Trade Development Board (TDB) for a Central Registration Number.  Items under import/export control may either require endorsement or license before they can be processed. Companies should not enter into any financial or contractual obligation before the necessary licenses or approvals are obtained.

 

Temporary Entry

For goods entering Singapore on a temporary basis, companies can apply for an ATA Carnet with the Singapore International Chamber of Commerce. The ATA Carnet serves as a guarantee against payment of import duties/taxes should the temporary admission period be exceeded.  Goods imported under a carnet may not be sold and must be re-exported within the temporary admission period.  If the items to be imported are subject to controls, companies must obtain endorsement/approvals from the relevant Government agencies before importing the goods into Singapore.

 

Labeling, Marking Requirements

Labels are required on imported food, drugs, liquors, paints and solvents and must specify the country of origin.  Repackaged foods must be labeled to show (in English) the appropriate designation of the food content printed in capital letters at least 1/16 inch high; whether foods are compounded, mixed or blended; the minimum quantity stated in metric net weight or measure; the name and address of the manufacturer or seller; and the country of origin.

 

A description (in English) of the contents of the package may be added to the face of the label provided the additional language is not contrary to, or a modification of, any statement on the label.  Pictorial illustrations must not mislead about the true nature or origin of the food.  Foods having defined standards must be labeled to conform to those standards and be free from added foreign substances.  Packages of food described as "enriched", "fortified", "vitaminized" or in any other way which implies that the article contains added vitamins or minerals must show the quantity of vitamins or minerals added per metric unit.

 

Special labels are required for certain foods, medicines and goods such as edible and non-edible animal fats as well as paints and solvents.  Processed foods and pharmaceuticals must be inspected and approved by the Ministry of Health. Electrical goods must be checked by the Public Utilities Board before they can be installed, while paints and solvents are the responsibility of the Chief Inspector of Factories, Ministry of Labor.

 

Prohibited Imports

Singapore prohibits the import of chewing gum, firecrackers, horns, sirens, silencers, toy coins and currencies and satelite dishes and receivers.  A full list of prohibited products can be obtained from the Trade Development Board.

 

Standards

Singapore uses the metric system.  While industrial standards applied in the engineering and construction fields are basically those used by other developed countries, the Productivity and Standards Board (PSB) has developed standards for certain electrical, sanitary and building products. PSB is the national standards and certification authority.

 

PSB also administers the Good Manufacturing Practice Scheme and the PSB Certification Mark Scheme.  They are awarded to manufacturers whose quality assurance systems and products comply with the ISO 9000 series of quality systems or the relevant Singapore standards.

 

Under the Consumer Protection (Safety Requirements) Regulations of 1991, 17 products (LPG systems, cooking ranges, electric irons, gas cookers, hair dryers, microwave ovens, televisions, video display units, video cassette recorders, table fans, high-fidelity equipment, immersion water heaters, kettles, refrigerators, rice cookers, room air-conditioners, vacuum cleaners and washing machines) which are potentially hazardous to consumers must be registered and declared safe before they can be sold in Singapore.  The Consumer Protection Act (CPA) mark is a compulsory stamp of approval given by PSB to ensure that consumers are safe from hazards such as fire, explosion and electrical shock when using these appliances.  However, test reports issued by accredited testing laboratories and national certification bodies are recognized by PSB. A list of accredited laboratories and national certification bodies is available from PSB. U.S. suppliers of these products planning to expand sales into Singapore should check with the Consumer Protection Agency and PSB before exporting.

 

Similarly, telecommunications equipment imported for use in Singapore is subject to "Type-Approval" by the Telecommunication Authority of Singapore.

 

For the construction industry, the Construction Industry Development Board (CIDB) has introduced the Construction Quality Assessment System (CONQUAS).  CONQUAS is an objective method of rating building works.  The system examines the contractor's work in three areas: structural (40 points), architectural (50 points) and external works (10 points) based on a 100-point score.  The system measures the extent to which a building conforms with the contract specifications.  Contractors with high CONQUAS scores are given preferential margins when they tender for public contracts.

 

Free Trade Zones/Warehouses

Singapore has seven Free Trade Zones (FTZ), six for seaborne cargo and one for air cargo (Singapore Changi Airport), within which a wide range of facilities and services are provided for storage and re-export of dutiable and controlled goods. Goods can be stored within the zones without any customs documentation until they are released in the market.  They can also be processed and re-exported with minimum customs formalities.

 

The FTZ's at the port facilitate entrépot trade and promote the handling of transhipment cargo.  They offer free 72-hour storage for import/export of conventional and containerized cargo and 14-day free storage for transhipment/re-export cargo.

 

Within the FTZ, the Port of Singapore Authority (PSA) provides more than two million square meters of covered and open storage space.  Outside the FTZ, PSA has 473,000 square meters of covered warehouse space.  The PSA operates the Pasir Panjang Distripark, Alexandra Distripark and Keppel Distripark.

 

Special Import Provisions

Dutiable goods are allowed to be imported for repair without payment of duty on condition that they are re-exported within three months of the date of importation.  If the goods are not re-exported after the expiration of the given period, duty will become payable.  This facility provision is also extended to dutiable goods which are imported for trade exhibitions, fashion shows and displays.

 

Bona fide trade samples may be imported without payment of duty if they are imported solely:

 

(A) for the purpose of soliciting orders for goods to be supplied from abroad; or

 

(B) for demonstration in Singapore to enable manufacturers in Singapore to produce such articles to fulfill orders from abroad; or

 

(C) by a manufacturer for the purpose of copying, testing or experimenting before he produces such articles in Singapore.

 

Membership in Free Trade Arrangements

Singapore is a party to the World Trade Organization (WTO), formerly known as the General Agreement on Tariffs and Trade (GATT).  Since January 1993, Singapore has participated in the ASEAN Common Effective Preferential Tariff (CEPT) program for the ASEAN Free Trade Area (AFTA). The program involves the application of preferential tariffs to goods of ASEAN origin as defined under the Rules of Origin for CEPT.  Under the rules, a product is of ASEAN origin if it is wholly produced or obtained in an ASEAN country.  The product can also be deemed to originate from ASEAN Member States if at least 40 percent of its content originates from any member states.  The 40 percent local content requirement refers to both single country and cumulative ASEAN content.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore07 Singapore: Investment Climate <A>=Singapore

 

 

Chapter VII.  Investment Climate

 

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Investment Policy Summary

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Singapore has a highly open investment regime, through which it seeks to overcome land, resource and labor constraints.  Singapore aims to progress into the league of developed countries by attracting firms that can build up the country’s technological base and labor force capabilities.

 

New foreign manufacturing investments amounted to US$4.0 billion in 1997, accounting for 70 percent of total manufacturing investments committed that year. U.S. investments in Singapore - concentrated in the petroleum, chemicals and electronics industries - totalled US$1.6 billion and comprised a 40 percent share of total foreign manufacturing investment commitments in 1997.

 

Total manufacturing investment growth in 1998, however, is projected by the government to decline by about 6.0 percent to US$4.7 billion.  The Southeast Asian currency crisis, which began in the summer of 1997, has since escalated into a severe economic and social crisis that will take several years to resolve. Investor confidence in Southeast Asia has thus been adversely affected.  This has led some multinational corporations (MNCs) to reconsider earlier decisions to invest in the region, notwithstanding the acquisition opportunities and significantly lower costs that have resulted from the economic crisis. Singapore, as an integral part of a region-wide production and distribution network, is affected by the crisis despite its strong economic fundamentals (10 consecutive years of fiscal and current account surpluses averaging four and 15 percent of GDP respectively, no foreign debt, a savings rate of 50 percent of GDP and foreign reserves of US$75 billion). 

 

The Singapore government has responded by accelerating and intensifying efforts to enhance the country’s physical and information-technology infrastructure.  It is also implementing counter-cyclical fiscal and business cost-lowering measures to encourage foreign and local firms to invest in new technology, automate, upgrade manpower skills, and engage in research and development. 

 

Additionally, the government is pursuing financial reforms, which will expand offshore banking and eventually allow greater foreign competition in the domestic financial services sector.  Tax and other incentives have been specially tailored to attract leading foreign financial institutions to invest in the country and help it become an international financial center in the next millennium.

 

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Openness to Foreign Investment

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Singapore's free enterprise economy, which recorded the world’s third highest per capita GDP of US$26,000 in 1997 in terms of purchasing power parity (according to a World Bank ranking), is dominated by government-linked companies (GLCs) and large foreign multinational corporations.   GLCs straddle all major sectors of the economy, while MNCs concentrate mainly in the electronics and chemicals industries. 

 

MNCs generally use Singapore as a base for high-end manufacturing and product development. Capitalizing on Singapore’s modern and efficient infrastructure and its productive workforce, they also establish their regional headquarters in Singapore to coordinate procurement, production, marketing and distribution operations. Thus, their operations in Singapore complement lower-end assembly operations in other Southeast Asian countries and form a region-wide production and distribution network. Attracting foreign investment into the country has been an economic strategy of the government since independence in 1965.  Consequently, the country’s legal framework and public policies have always been foreign investor-friendly.

 

Foreign investors are not required to enter into joint ventures or give up management control to local interests. The Singapore government generally does not restrict or discourage foreign investment either to protect local industries or for any other reason. However, notable exceptions exist in the armament manufacturing, news media, telecommunications, broadcasting, property ownership and domestic banking sectors where investment opportunities are limited.

 

The Economic Development Board (EDB), the government’s manufacturing investment promotion agency, does screen investment proposals to determine their eligibility for various incentive schemes and to provide assistance.  While those investments that do not meet the criteria are not given incentives, they are not prohibited from proceeding. As a one-stop service that helps foreign investors avoid red tape, the EDB has a reputation for being responsive to changing business conditions and investor needs.

 

Currently, the government is actively pursuing financial reforms aimed at expanding the offshore financial sector. The intent is to expand fund management services and eventually allow greater foreign competition in domestic retail banking and other financial services.  Through the Monetary Authority of Singapore (MAS), the Singapore government provides generous tax incentives to encourage leading foreign financial institutions to invest in the country, introduce new financial products and help the city-state achieve its aim of becoming an international financial center in the new millennium (please refer to the section on, “Singapore government investment incentives”).

 

 

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Conversion and Transfer Policies

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Singapore lifted all restrictions on foreign exchange transactions and capital movements in 1978 and places no restrictions on reinvestment or repatriation of earnings and capital.

 

Affected by the financial crisis in Southeast Asia, the Singapore dollar has depreciated against the U.S. dollar since July 1997 when the crisis first erupted.  The Singapore dollar is expected to trade at an average of 1.70 to the U.S. dollar in 1998, a 13 percent depreciation (based on US$ per S$ terms) compared to the 1997 average rate of 1.48.

 

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Expropriation and Compensation

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With the exception of Burma, Singapore has investment promotion and protection agreements with all countries in the Association of Southeast Asian Nations (ASEAN)- Malaysia, Thailand, the Philippines, Indonesia, Brunei, Laos and Vietnam.  Additionally, Singapore has agreements with the Belgo-Luxembourg Economic Union and 19 other countries, including the United States. 

 

These agreements mutually protect nationals or companies of either country for a specific period (usually 15 years) against war and non-commercial risks of expropriation and nationalization.  In the event that expropriation or nationalization occurs, the host government will compensate affected foreign investors based on the market value of the properties concerned prior to expropriation or nationalization.  To date, there have been no significant disputes between the government and foreign investors.  The risk of expropriation or nationalization of foreign investments in Singapore is virtually nil. Political risk insurance is available from the U.S. Overseas Private Investment Corporation (OPIC). 

 

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Dispute Settlement

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Singapore has institutionalized and internationalized arbitration through the creation of arbitration bodies and ratification of international conventions. The Singapore International Arbitration Center (SIAC), a non-profit organization, commenced operations in 1991 to promote the settlement of disputes by arbitration and conciliation.  The United Nations Commission for International Trade Law (UNCITRAL) Model Law, with modifications for International Arbitration and Conciliation in the International Arbitration Act (IAA), provides the main framework for international arbitration.

 

Singapore ratified the recognition and enforcement of Foreign Arbitration Awards (New York, 1958) on 21 August 1986; and the International Convention on the Settlement of Investment Disputes on 13 November 1968.

 

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Performance Requirements/Incentives

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Singapore does not impose performance requirements on foreign investors as a condition for establishing operations.  However, if investment incentives are requested, a company’s track record, the amount of its investment, and its contribution to improving Singapore’s high technology manufacturing and knowledge-intensive industries are important considerations in the selection process. 

 

The government does not require investors to purchase from local sources or specify a percentage of output for export.  The government also does not limit investors’ access to foreign exchange or require local equity ownership in the investment. 

 

The Companies Act requires that every company must have at least two directors, one of whom must be resident in Singapore.  Foreign investors face no requirement to reduce equity over time and are free to obtain their necessary financing from any source.  Employment of host country nationals is not directly required, but the government prefers to decrease dependence on unskilled foreign labor,  encouraging companies to automate and move into high technology production instead.

 

There are no rules on the level and period for investors to effect transfer of technology.  Over the years, a conducive business climate and supportive government policies have encouraged foreign investors to deepen and diversify their operations into activities such as product engineering, design and research, regional marketing, technical services, and fund management.  In the process, Singapore gains valuable engineering and management know-how.

 

The EDB, TDB, MAS and the National Science and Technology Board (NSTB) offer a broad range of attractive incentives to entice specific types of investments to Singapore.  Details of key incentives available to foreign investors are provided in the last section of this report.

 

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Rights to Private Ownership and Establishment

---------------------------------------------

 

Foreign and local entities may freely establish and operate their own enterprises in Singapore.  Except for representative offices, where foreign firms maintain a local representative but do not conduct commercial transactions with Singapore, there are no restrictions on carrying out remunerative activities. 

 

All businesses in Singapore must be registered with the Registry of Companies and Businesses.  Foreign investors can operate their businesses in one of the following forms:

 

--Sole Proprietorship: an individual operating as a sole trader; regulated under the Business Registration Act;

 

--Partnership: two to 20 persons; regulated under the Business Registration Act;

 

--Incorporated Company: comprising not more than 50 shareholders and operating as a company limited by share, guarantee or as an unlimited company; regulated by the provisions of the Companies Act (cap. 50); or,

 

--Foreign Company: registered as a branch of the parent company under the Companies Act but not incorporated as a Singapore company;

 

--Representative Office: offices of foreign corporations, which undertake promotional and liaison activities on their parent company's behalf.   They must not engage in business, conclude contracts, provide consultancy for a fee, undertake transshipment of goods or open or negotiate any letters of credit directly or on behalf of their parent companies.

 

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Protection of Property Rights

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Common law governs the acquisition and disposition of all property.  There are some restrictions on foreigners owning real estate in Singapore.  Under the Residential Property Act, foreigners may purchase freehold condominiums.  They are, however, not permitted to own landed homes (houses) and apartments in buildings of fewer than 6 storeys, even if they are leasehold properties, unless approval is first obtained from the Minister of Law.  Such approvals are granted very selectively; an example where approval may be granted is a foreign MNC buying properties to house its executives.  There are no restrictions on foreign ownership of industrial and commercial real estate.

 

Regarding intellectual property, Singapore enacted strict copyright protection legislation in 1987, strengthened its trademark law in 1991, passed a new patent law in 1994, and amended its copyright law in 1998.  Singapore has convened an interagency task force to oversee the drafting of amendments to make its IPR laws conform with the World Trade Organization’s Trade Related Intellectual Property Agreement (TRIPS). It amended its patent law in November 1995, making it fully TRIPS-consistent.  It has promised to complete all TRIPS-required changes to its other IPR laws by 1999.  Singapore is a signatory to the Paris convention for the protection of industrial property and the patent cooperation treaty.  Likewise, Singapore has committed to signing the Berne Convention for the protection of literary and artistic works.  However, Singapore is not a signatory to the Geneva Phonogram Convention, or the Universal Copyright Convention.

 

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Transparency of the Regulatory System

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Singapore's regulatory environment is business-friendly and is characterized by transparency and clarity.  The bureaucracy is generally considered to be efficient and effective.

 

Prior to implementing any law or regulation, the government usually consults relevant bodies and agencies, companies and the public.  Tax, labor, banking and finance, industrial health and safety, arbitration, wage and training rules and regulations are formulated and reviewed with the interests of foreign investors and local enterprises in mind.  However, local laws give regulatory bodies wide discretion to modify regulations and impose new conditions.  This allows government agencies to negotiate the way they provide incentives or other services to foreign companies on a case-by-case basis.

 

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Efficient Capital Markets and Portfolio Investment

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Singapore liberalized exchange controls in 1978, removing restrictions on the movement of funds.  In a regional context, Singapore’s policies are relatively efficient in facilitating the flow of financial resources to support the product and factor markets.  According to a Bank of International Settlements survey in 1995, Singapore has the world’s fourth largest foreign exchange market.  Its Asian Dollar Market is also the world’s eighth largest offshore lending center. 

Singapore's laws do not distinguish between foreign and domestic companies in the banking industry.  The only legal distinction that exists is between the offshore and domestic units, and in the type of license held.  The Singapore government has a strict policy of separating the domestic capital market from the offshore market, primarily to maintain controls on developments in the domestic market and prevent the internationalization of the Singapore dollar.  In the government’s view, internationalization of the Singapore dollar would subject the Singapore dollar to greater exchange rate volatility and possible speculative attacks, and render its exchange rate policies less effective in maintaining domestic price stability.

 

The development of Singapore as an international financial center has gained momentum and prominence with the recent adoption by the government of a financial reform package aimed at expanding the offshore financial sector.  Specifically, the government announced an additional injection of S$25 billion (about US$15 billion) of public sector funds into the private fund management market over the next three years as well as a rise in the Singapore-dollar resident lending loan limit for offshore banks to S$300 million (about US$176 million).  Although the regional financial turmoil has generally had a negative effect on Singapore, the crisis has also enhanced Singapore’s reputation and credibility as a financial “safe haven” and could help to attract leading foreign financial institutions to broaden and deepen the range of financial products in Singapore.  Generous tax and other benefits have also been tailored particularly to promote fund management, the bond market, unit trusts, loan and debt syndication, and financial futures trading activities.

 

Laws and regulations governing the banking and financial industry are publicly available from the MAS.  The Stock Exchange of Singapore (SES) has allowed foreign brokerage firms to enter the market but with some restrictions.  The SES also encourages MNCs and their Singapore subsidiaries conducting treasury operations to list shares on the exchange in any internationally acceptable currency.

 

Credit is allocated on market terms.  Foreign investors are able to get Singapore dollar credit in the local market.  However, in line with the policy to separate the domestic market from the offshore market and to prevent the internationalization of the Singapore dollar, banks are currently required to consult the MAS if their credit exceeds S$5.0 million for non-residents.  The government has indicated, however, that such requirements will gradually be relaxed.

 

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Political Violence

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The Singapore political environment is stable.  The ruling People's Action Party (PAP) has dominated Singapore politics since independence, and currently controls 81 of the 83 regularly-contested parliamentary seats.  Opposition parties, which control two regularly-contested parliamentary seats and one additional seat reserved to the opposition by the constitution, do not often espouse views that are radically different from the mainstream of Singapore political opinion.  The expression of political differences takes place predominantly in a non-confrontational way.  There has been no political violence in Singapore in over thirty years.  Tough internal security laws, whose use in politically-related (especially communist) security cases has declined in recent years, are a factor in the maintenance of political peace, but are secondary to other factors.

 

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Corruption

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Singapore is well-known in business circles for its clean, corruption-free government.  When cases of corruption are uncovered, the government deals with them harshly, swiftly and publicly.  (Note: There were 15 reported cases of corruption in the 61,000 strong civil service in 1996.)  The Prevention of Corruption Act and the Corruption (Confiscation of Benefits) Act provide the legal basis for government action by the Corrupt Practices Investigation Bureau (a division of the Prime Minister’s Office).  These laws cover acts of corruption both within Singapore as well as those committed by Singaporeans in other countries.

 

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Bilateral Investment Agreements

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Singapore has signed General Investment Guarantee Agreements (IGA’s) with ASEAN member nations (except Burma), the Belgo-Luxembourg Economic Union and the following 20 economic partners: Cambodia, Canada, China, the Czech Republic, Egypt, France, Germany, Hungary, Laos, Latvia, Mongolia, The Netherlands, Pakistan, Poland, the Riau Archipelago, Sri Lanka, Switzerland, Taiwan, the United Kingdom and the United States.  The U.S. and Singapore signed a trade and investment framework agreement in October 1991.

 

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OPIC and Other Investment Insurance Programs

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Under the 1966 investment guarantee agreement with Singapore, the U.S. Overseas Private Investment Corporation (OPIC) offers insurance to U.S. investors in Singapore against currency inconvertibility, expropriation and losses arising from war.  Singapore became a member of the Multilateral Investment Guarantee Agency (MIGA) in February 1998.

 

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Labor

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Singapore's labor market is characterized by a small, comparatively well-disciplined labor force of 1.9 million; a considerable pool of over 400,000 foreign, mostly unskilled, workers from the region; and a shortage of local skilled professionals.

 

The regional economic crisis has led to increased layoffs, primarily in manufacturing.  Consequently, the labor shortage has moderated in some sectors while wage pressures and employee turnover rates have generally declined. However, specialist positions requiring knowledged-based skills such as those in information technology, engineering, finance, sales, telecommunications remain hard to fill.

 

The labor shortage influences the type of industries and businesses the government promotes.  High technology investments and regional headquarter activities are encouraged, and companies are given incentives to automate.  To ease the shortage of local skilled professionals, the government has a policy of attracting foreign talent to work in Singapore, which includes allowing companies to claim a double tax deduction on approved hiring and relocation expenses related to hiring talent from abroad. 

 

To control dependence on unskilled foreign labor, the government places a ceiling on the percentage of foreign workers various industries may employ, and charges a monthly levy for each foreign worker.  Foreign workers who earn S$2,000 (about US$1,176) or less per month are given two-year work permits, usually renewable for another two years. Those considered to be skilled (e.g. those who have some skills certificate) receive three-year work permits which are renewable up to age 60.  Professional foreign workers earning more than S$2,000 per month are given employment passes.

 

Local labor laws allow for relatively free hiring and firing practices. Employees with three years’ continuous service with an employer may claim benefits if they are retrenched on the grounds of redundancy or reorganization of the company. The cash benefit paid out is negotiated between employers and the retrenched workers. The Employment Act regulates the working conditions of all workmen, regardless of salary, and of employees whose monthly wages are less than S$1,600 per month (about US$940).  Working hours, paid annual leave and overtime salaries are usually determined by general prevailing practices.  The current retirement age is 60 years.  It will be raised to 62 years from January 1999.

 

Wages in Singapore are higher than in most other developing and newly industrialized countries in East Asia.  In addition to the basic wage rate, employers and employees are each required by law to contribute an amount equivalent to 20 percent of an employee’s salary to the central provident fund, a government-managed retirement fund.  Firms also pay a levy of 1.0 percent of the wages paid to employees drawing less than S$1,000 per month (US$588) to the Skills Development Fund (SDF), a pool from which the government provides incentive grants for training of persons who are in, joining or re-entering the workforce.  The National Wages Council (NWC) - comprising representatives from the Unions, employer groups and the government - sets non-binding but influential guidelines for orderly wage adjustments.  There is no minimum wage law in Singapore.

 

Labor-management relations in Singapore are excellent.  There has been only one strike since 1986, which resulted in the loss of 122 worker-days.  Though workers other than those in essential services have the legal right to strike, the chances of strikes taking place are minimal given the dispute settlement process. Industrial disputes are usually settled through mediation by the government. When this fails, the matter is decided by the Industrial Arbitration Court (IAC), whose rulings are binding.  Once the IAC recognizes a dispute, strikes or lock-outs are illegal under the Trade Disputes Act.  About 14 percent of the work force is unionized.  The vast majority of unions are affiliated with the National Trades Union Congress (NTUC).  The NTUC is headed by a Cabinet Minister who has no government portfolio, and is staffed by a variety of government officials, including Members of Parliament from the ruling political party.

 

 

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Foreign Trade Zones/Free Trade Zones

------------------------------------

 

Singapore has six free-trade zones (FTZ's) for seaborne cargo and one for air freight.  The FTZ's may be used for storage and repackaging of import and export cargo and goods transiting Singapore for subsequent re-export.  Manufacturing is not carried out within the zones.  Foreign and local firms have equal access to the FTZ facilities.

 

------------------------------------

Foreign Direct Investment Statistics

------------------------------------

 

Current surveys estimate that there are over 1,200 American firms (manufacturing and services) in Singapore.  U.S. Department of Commerce statistics indicate that U.S. firms had cumulative total assets worth US$14.2 billion in Singapore in 1996. (Note: Singapore estimates cumulative U.S. investment to be lower mainly because services are excluded.  See charts below).

 

Singapore statistics indicate that, within the manufacturing sector, foreign companies committed US$4.0 billion in new investments in 1997, mostly in the electronics and chemicals industries.  The U.S., accounting for 40 percent, was once again the city-state’s leading investor, followed by Japan (34 percent). 

In terms of cumulative gross fixed assets, foreign firms - led by those from the U.S., Europe and Japan - accounted for 72 percent.  In recent years, the Singapore government has been attempting to balance the city-state’s heavy dependence on foreign MNCs by nurturing large, government-linked companies to become regional MNCs, and by assisting local small and medium enterprises to grow and upgrade.

 

------------------------------------------------------

Major U.S. Investment Commitments and Projects in 1997

------------------------------------------------------

 

Industrial Chemicals

--------------------

 

Dupont: built a US$100 million Lycra facility manufacturing elastic yarns.

 

Hoechst Celanese: built a US$97 million vinyl acetate monomer plant on Jurong island project.

 

Eastman: invested US$200 million to set up an OXO chemicals manufacturing complex, its first outside the U.S.

 

Exxon Chemical: committed US$2.0 billion to build a petrochemical complex with an ethylene capacity of 800,000 tons. 

 

Chevron Chemical: built a US$200 million additives manufacturing plant.

 

Mobil: opened a US$250 million heavy neutral lube base oil plant. 

 

Electronics

-----------

 

3Com: invested US$60 million to set up a plant to manufacture network interface cards, low-cost network hubs, routers and switches, remote network access systems and ISDN modems.

 

Seagate: opened a US$125 million disk drive facility.

 

Delco Electronics: invested US$125 million in facilities and manpower (for example, a design center for automotive electronics hardware, software and systems design.)

 

Hewlett-Packard: joined Chartered Semiconductor Manufacturing (CSM), a Singapore government-linked company, to construct a US$625 million new wafer fabrication facility.

 

3M: invested US$307 million to build 3M’s largest microflex manufacturing facility worldwide in Singapore. (Note: Microflex refers to flexible interconnect circuits which are used in electronics products.)

 

Digital Equipment Corp: committed US$10 million to set up a research and development laboratory.

 

Pharmaceutical

--------------

 

The West Company (global leader in pharmaceutical components): invested US$7.0 million in expansion, bringing its total investment to US$43 million.

 

Schering-Plough: opened its US$188 million pharmaceutical plant.

 

----------------------------

Intellectual Property Rights

----------------------------

 

Patents

-------

Singapore's Parliament passed a new Patent Law at the end of 1994, which entered into force in February 1995.  Amendments to make the new law fully TRIPS consistent came into effect on January 1, 1996.  The new law replaced the previous system whereby patent protection was accorded through registration in Great Britain.  It establishes patent registration in Singapore and provides product protection for a 20-year period.

 

Copyrights

----------

Singapore’s Copyright Act came into effect in 1987 following intensive discussions with the United States.  The Copyright Act covers (first level) musical, literary, dramatic and artistic property; and (second level) sound recording, films, broadcasting and published editions of works. It also protects computer programs and databases.  Amendments to make the Copyright Act TRIPS-consistent were passed by the Parliament and entered into force in April 1998. Specifically, the amendments enhanced performers' rights, provided new protection for rental rights, strengthened customs controls and procedures, and legalized the seizure of business documents in raids on IPR violators.  The amendments also laid the groundwork for Singapore's accession to the Berne Convention.  While coverage for computer programs and databases under the Copyright Act was once limited to reproduction protection and rights, the amendments expanded coverage to include rental protection and rights.

 

Singapore is a member of the World Intellectual Property Organization (WIPO) but has not yet ratified the two WIPO treaties.  Singapore does not subscribe to the Universal Copyright Convention (UCC) or the Berne Convention.  However, the government announced in April 1998 that it was ready to accede to the latter and would do so once its instrument of accession had been processed in accordance with WIPO procedures.

 

Generally, the Singapore government has interpreted the Copyright Law in such a way as to place the onus of responsibility for enforcement on industry. Challenged by piracy stemming from the proliferation of optical disc technology, U.S. industry and the U.S. government made consistent appeals throughout 1997 for the government to take greater initiative.  Recognizing that rising piracy levels could discourage inflows of high-tech foreign investment, Singapore launched a renewed dialogue with industry in late 1997 and executed an unprecedented number of police-initiated raids on retail outlets and makeshift stalls during the first quarter of 1998.

 

The government initiative also addressed industry concerns about the local production of pirated optical discs by introducing new regulations on optical disc manufacturers in April 1998.  The new regulations impose controls on the import, export, and transfer of optical disc manufacturing equipment and require optical disc manufacturers to be licensed.  The government has said it will revoke the license of manufacturers caught violating the Copyright Act.

 

To complement the new regulations, the government facilitated the development of a code of conduct, which nine of Singapore's optical disc manufacturers signed in April 1998.  By signing the code of conduct, the manufacturers voluntarily pledged to verify orders, maintain internal controls subject to verification by the manufacturer's external auditors, and use Source Identification Codes (SID) unless otherwise directed in writing by the customer.  Moreover, if SID codes are not used and the order is found to be unauthorized, manufacturers must release information about the order and the customer.

 

Increased enforcement activities by the government and industry have been accompanied by tough penalties for offenders.  In November 1997, one repeat offender was sentenced to two years in jail while a second offender received a 17-month sentence.  Later, in February 1998, an eight-time offender was sentenced to two years in jail for his crimes.  Finally, another offender was fined about US$44,000 in may 1998 for selling pirated computer software.  While commending the government for stepped-up enforcement and tough penalties, industry still urges the government to better publicize its efforts to stop piracy and to demonstrate a sustained and long-term enforcement effort to deal with the retail sale of pirated optical discs.

 

According to the Business Software Alliance (BSA) and the Software Publishers Association (SPA), Singapore had the fourth lowest business software piracy rate in the Asia-pacific region after Australia (32 percent), Japan (32 percent), and New Zealand (34 percent).  BSA/SPA statistics show Singapore’s piracy rate fell from 59 percent in 1996 to 56 percent in 1997.  The fall in Singapore's rate was positive news after rises in the previous two years.  The piracy rate, nevertheless, remains unusually high compared to other nations of equivalent levels of wealth and development.

 

 

BSA/SPA report estimate losses from counterfeit software at US$56.6 million in 1997, equaling the 1996 total despite the lower piracy figure.

 

Trademarks

----------

Singapore’s Trademark Act is administered by the registry of trademarks and patents.  The registry maintains a list of trademarks registered as distinctive marks under the United Kingdom Trade Marks Act of 1938.  The act was strengthened in March 1991 and now includes provisions for service marks in keeping with worldwide trends.  In order to fulfill its WTO trips commitments, Singapore plans to amend the Trademark Act by the end of 1998.

 

Trade Secrets

-------------

The Official Secrets Act and the Internal Security Act protect all government trade secrets.  Investors’ commercially valuable proprietary information is protected under common law by the law of confidence.

 

Semiconductor Chip Layout Design

--------------------------------

While there is no specific protection of semiconductor chip layout design under Singapore law, protection is nonetheless available.  Parties may register the layout design under the copyright act and/or the patent act, to the extent that the layout design is an invention. Furthermore, layout designs registered in the U.K. under the registered design act are accorded equivalent protection in Singapore.  In order to fulfill its WTO TRIPS commitments, Singapore plans to pass a new act specifically protecting the layout and design of integrated circuits by the end of 1998.

 

------------------------------------------

Singapore Government Investment Incentives

------------------------------------------

 

Incentives Administered by the Economic Development Board (EDB)

---------------------------------------------------------------

 

A) Pioneer Status: new manufacturing and service investments introducing high-tech skills can enjoy complete exemption from the 26 percent corporate tax on profits for five to ten years.

 

B) Development & Expansion Incentive: this incentive replaced the post-pioneer incentive.  Firms that engage in new projects, expand or upgrade operations in Singapore which result in significant economic spin-offs are eligible for a concessionary tax rate of 13 percent for up to 10 years with provision for extension.

 

C) Expansion Incentive: manufacturing and service companies that invest a minimum of S$10 million (US$7.1 million) in new production equipment and machinery can enjoy exemption from the 26 percent tax on profits in excess of the pre-expansion level for up to ten years.

 

D) Investment Allowance Incentive: companies engaged in qualifying activities (for example, manufacturing research and development activities, construction or projects to reduce consumption of potable water) are eligible for exemption of taxable income equal to a specified proportion (up to 50 percent) of new fixed investment.  The exempted firms must make the specified investments within five years.

 

E) Approved Foreign Loan Scheme: a company that takes a minimum loan of S$ 200,000 (US$143,000) from a foreign lender for the purchase of productive equipment will be wholly or partially exempt from withholding tax on the interest payable to the lender subject to the condition that the tax relief does not result in an increase in tax liability in the foreign country.

 

F) Approved Royalties: full or partial exemption of withholding tax on royalties is given to eligible companies subject to the condition that the tax relief does not result in an increase in tax liability in the foreign country.

 

G) Venture Capital Incentive: companies with at least 50 percent local equity content and incorporated in Singapore for tax purposes that invest in approved new technology projects are eligible for this incentive.  Losses incurred from the sale of shares of up to 100 percent of equity invested can be set off against the investor’s other taxable income.

 

H) Overseas Investment Incentive: companies eligible for this incentive must be involved in investments in overseas projects.  The companies must be 50 percent owned by Singapore citizens or permanent residents, and must be incorporated and resident in Singapore for tax purposes.   These companies can offset losses incurred from the sale of shares or liquidation of up to 100 percent of equity invested overseas, against their other taxable income.

 

I) Operational Headquarters (OHQ) Incentive: entities providing management and other approved headquarters-related services to subsidiary, associated, or related companies in other countries are taxed at the concessionary corporate rate of 10 percent.  The incentive is given for up to 10 years with provision for extension.

 

J) Accelerated Depreciation Allowances: in lieu of the normal initial depreciation allowance of 20 percent and annual allowance of between 5 to 20 percent on capital expenditure, companies can claim an annual depreciation allowance of 33 1/3 percent over three years for all plants and machinery.  They may also claim 100 percent in one year for prescribed automation equipment, robots and certain environmental-related equipment (e.g., energy-saving equipment).  Industrial building allowances may be depreciated over 25 years.

 

K) Overseas Enterprise Incentive: applicable to approved overseas investments and projects.  Companies must be at least 50 percent owned by Singapore citizens or Singapore permanent residents, and incorporated and resident in Singapore for tax purposes.  Exemption of corporate tax on qualifying income. Tax relief period is for up to ten years.

 

L) Business Headquarters (BHQ) Incentive: may be awarded to eligible companies in manufacturing and service activities which qualify for an incentive under the economic expansion incentives act and which provide business and professional expertise, business and management direction and key support services to companies in the region.  Period varies depending on the incentive granted.

 

M) Double Deduction for Research and Development (R&D) Expenses:  eligible manufacturing and service activities engaged in R&D may receive this grant.  The R&D project must be carried out in Singapore.  Double deduction allowed for qualifying R&D expenses against income.

 

N) Double Deduction for Overseas Investment Development Expenditure:  eligible manufacturing and business activities can enjoy double deduction for qualifying expenditure incurred in approved feasibility studies and maintenance of overseas project offices against income.

 

Incentives Administered by the Trade Development Board (TDB)

------------------------------------------------------------

 

A) Pioneer Status Scheme for Counter Trade:  companies that engage solely in counter trade, performing at least one segment of each transaction through Singapore, can obtain pioneer status.  This status gives full exemption of income tax on profits arising from counter trade for a period of five years, and it may be extended.

 

B) Approved Oil Trader (AOT) incentive:  the AOT incentive aims at facilitating and expanding international oil trading activities in Singapore.  Applicants should be established oil traders with good worldwide networks, strong track records and conduct a substantial volume of physical trade on a principal basis. Approved oil traders will be taxed at a concessionary tax rate of 10 percent on income derived from international trading activities in approved oil products. The concession is for five years with a provision for renewal.

 

C) Approved International Trader (AIT) Incentive:  conditions for the AIT scheme are similar to the AOT.  The difference is that the AIT offers a concessionary tax rate of 10 percent on income derived from international trading activities in approved non-petroleum commodities and products.

 

D) Approved International Shipping Enterprise (AIS) Incentive:  international shipping companies which establish operations in Singapore can qualify for the incentive.  The qualifying income includes those derived from operation of non-Singapore vessels outside Singapore.

 

E) Approved Aircraft Incentive: under this incentive, approved aircraft operating lessors will enjoy a concessionary tax rate on income derived from offshore aircraft leasing operations.

 

F) Approved Cyber Trader (ACT) Incentive:  the act incentive aims at facilitating the establishment of electronic commerce activities in Singapore.  Companies which establish interactive internet electronic commerce operations in Singapore can qualify for the incentive.  Approved cyber traders will be taxed at a concessionary tax rate of 10 percent on income derived from electronic commerce trading activities in approved products and services for a period of five years.

 

Incentives Administered by the Monetary Authority of Singapore (MAS)

----------------------------------------------------------------

 

Tax incentive for Asian Currency Unit (ACU) Income:  concessionary tax rate of 10 percent will be granted on income derived from offshore ACU activities with non-residents and other qualifying financial institutions in Singapore. Incremental ACU income exceeding S$50 million (about US$29 million) will be taxed at 5.0 percent.

 

Double Tax Deduction Scheme for Financial Research and Development: expenses relating to the development of new skills and knowledge-intensive financial activities in Singapore may qualify for double tax deduction.

 

Tax Exemption Scheme for Fund Management:  investment income of foreign investors will be exempted from tax.  Fund managers managing at least S$5.0 billion (about US$3.0 billion) of foreign investors’ funds will also enjoy a 5-year tax holiday, which can be extended on a case-by-case basis.  Other fund managers will be taxed at a concessionary rate of 10 percent.

 

Tax Incentive Scheme for Approved Trustee Companies: income from trustee or custodian services provided to non-resident beneficiaries will be taxed at a concessionary rate of 10 percent.  Investment income generated by the trusts will be exempted from tax.

 

Tax Incentive Scheme for Bond Market Activities: under this incentive plan, fee income from arranging, underwriting and distributing debt securities will enjoy a tax holiday; interest income from holding debt securities will be taxed at 10 percent; interest  from debt securities payable to non-residents without permanent establishments in Singapore will  be exempted from withholding tax; and income from trading in debt securities will be taxed at 10 percent.

 

Tax Exemption Scheme for Syndicated Facilities:  fees, interest, commissions and other income from arranging, underwriting and participating in syndicated credit, guarantee and debt facilities, for which the proceeds are used outside Singapore, will enjoy tax exemption.

 

Tax Incentive Scheme for Transactions in Foreign Securities:  income from transactions in foreign securities and from providing services with respect to foreign securities will be taxed at 10 percent.  Income from arranging and underwriting Initial Public Offerings (IPOS) of foreign currency-denominated shares on the Singapore Stock Exchange (SES), and from transactions in foreign securities listed on the SES are exempted from tax.

 

Tax Incentive Scheme for Foreign Securities Lending and Borrowing:  concessionary tax rate of 10 percent will apply to net income from loans of foreign securities to eligible parties, and to income from arranging such loans.

 

Tax Incentive for Credit Rating Agencies:  concessionary tax rate of 10 percent will be granted for five years on income from providing credit rating services with respect to the issue of foreign securities in Singapore.

 

Tax Incentive Scheme for Operational Headquarters (OHQ):  tax exemption on dividend income from approved network companies and on dividends distributed from the OHQ is granted for 5 to 10 years, with provision for extension.  Additionally, a concessionary tax rate of 10 percent will apply to income derived from providing qualifying OHQ services to approved network companies, and from qualifying investment activities on the OHQ’s own account.

 

Tax Incentives for Finance and Treasury Centers (FTC):  a concessionary tax of 10 percent on income received by companies from the provision of finance and treasury services to approved network companies.  Interest paid on foreign currency-denominated loans from network companies and banks outside Singapore, and on foreign currency-denominated bonds or commercial paper issued by the FTC can also be exempted from withholding tax.

 

Tax Incentive for Offshore Insurance Business:  income from writing offshore insurance business will be taxed at 10 percent.

 

Initiatives in New Technology Scheme for Insurers:  under this scheme, grants can be provided for the training of staff in new and specialized lines of risks, reinsurance or captive insurance business.

 

Incentives Administered by the National Science and Technology Board

--------------------------------------------------------------

 

Research and Development (R&D) Assistance Scheme:  grants can be offered to support specific projects on product or process R&D, which lead to the enhancement of the company’s competitiveness and in-house capability development.

 

Research Incentive Scheme for Companies: under this scheme, grants may be offered to support the development of in-house R&D capabilities among Singapore-based companies.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore08 Singapore: Trade and Project Financing <A>=Singapore

 

 

Chapter VIII.  Trade and Project Financing

 

Brief Description of Banking System

As a result of the Government's decision in the late 1960's to open Singapore to foreign banks, the banking sector has been a major growth sector for the Singapore economy.  Financial activities have become an important adjunct to Singapore's export-oriented industries and development as a manufacturing centre. The Monetary Authority of Singapore (MAS) performs all the functions of a central bank except currency issue, which remains in the domain of the Board of Commissioners of Currency.  The unit of legal tender is the Singapore dollar. The MAS is a wholly-owned and controlled statutory board under the Ministry of Finance, and is responsible for all matters relating to banks and other financial institutions.  It licenses and supervises banks, merchant banks, finance companies, insurance companies, money changers, securities dealers, investment advisers, futures companies, and other financial institutions.  The MAS also formulates and implements Singapore's monetary and exchange rate policies.

 

Foreign Exchange Controls Affecting Trade

There is free movement of capital and profits in Singapore.  Banks are required to consult the Monetary Authority of Singapore before considering Singapore dollar credit facilities exceeding S$5.0 million to any non-resident, or to a resident where the Singapore dollars are to be used outside Singapore.

 

Sources of Financing

Three types of commercial banks operate in Singapore, depending on the type of license they possess.  There are 149 commercial banks in Singapore, comprising 34 full-license banks (of which 12 were locally incorporated), 23 commercial banks with restricted licenses, and 92 with offshore licenses.  Three U.S. banks operate full licensed branches in Singapore.  Several large commercial banks offer a variety of banking services to manufacturing firms and other clients. Most banks extend credit for five to ten years at competitive interest rates covering up to 50 percent of plant and machinery costs and up to 65 percent of the value of factory buildings.  Higher percentages are available for particularly desirable projects and for expansion loans.  Many larger Singapore banks have subsidiaries that carry out merchant banking, insurance, property development, securities trading as members of the stock exchange, and underwriting issues of government bonds.  Eighty merchant banks provide a wide range of services not covered by some commercial banks, including investment portfolio management, investment advisory services, advice on corporate restructuring, mergers and acquisitions, financing, lending or participating in syndicated loans, capital equipment leasing, and underwriting and floating bond and stock issues.

 

MAS engages in limited money market operations to influence interest rates and ensure adequate liquidity in the banking system.  The Government does not set targets for monetary aggregates.  Money supply and domestic interest rates are primarily determined by international, rather than local conditions.  The exchange rate is the MAS's most important tool for controlling inflation.

Asian Development Bank

The Asian Development Bank, headquartered in Manila, is an International Financial Development Institution owned by 56 member countries of which the United States and Japan are the largest shareholders.  The bank lent US$5.8 billion in 1996 to promote economic and social progress in its developing member countries.  The transport and communications sector received the largest share of lending, followed by energy, agriculture and natural resources, and social infrastructure.  The Bank's medium-term strategy focuses on poverty reduction, improving the status of women, population planning and environmental protection. Going into the next century, the Bank has also assumed a new role as a catalyst for development.  In implementing this policy, the bank leverages its own financial resources through co-financing and other modalities to attract additional private capital in funding the development needs of its member countries.

 

A Commercial Liaison Office, which reports directly to the office of multilateral development banks at the U.S. Department of Commerce in Washington, assists U.S. suppliers and consultants in winning contracts on projects and activities funded by the bank.  The office includes a Senior Commercial Officer and two Commercial Specialists.  One of the specialists represents the United States-Asia Environmental Partnership (US-AEP) at the bank.  The liaison works closely with the U.S. Executive Director who represents the United States on the bank's board of directors.

 

Since 1967, the U.S. has won US$2.8 billion in overall procurement.  For the period 1995-1996, the United States ranked number one in overall procurement among donor countries, receiving a total of US$533.3 million in contract awards. The U.S. has consistently ranked first in consulting services awards, capturing about 20 percent of total awards every year.

 

Interested parties should contact Cantwell Walsh, U.S. Liaison to the Asian Development Bank, fax: (632) 890-9713, e-mail: Cwalsh@doc.gov.

 

U.S. BANKS IN SINGAPORE

 

American Express Bank Ltd.

16 Collyer Quay

Hitachi Tower

Singapore 049318

Tel: (65) 538-4833

Fax: (65) 534-3022

Bank of America NT & SA

9 Raffles Place

Republic Plaza Tower 1, #18-00

Singapore 048619

Tel: (65) 223-6688

Fax: (65) 239-3068

 

Bank of Hawaii

4 Shenton Way

#19-01 Shing Kwan House

Singapore 068807

Tel: (65) 221-0500

Fax: (65) 224-1144

 

Bankers Trust Company

5 Temasek Boulevard

#08-00 Suntec City Tower

Singapore 038985

Tel: (65) 336-2838

Fax: (65) 331-4868

 

Citibank N.A.

5 Shenton Way

#06-00

UIC Building

Singapore 068808

Tel: (65) 224-2611

Fax: (65) 224-9844

 

CoBank, ACB

50 Raffles Place

Level 37, Shell Tower

Singapore 048623

Tel: (65) 320-8427

Fax: (65) 320-8426

 

 

CoreStates Bank NA

6 Battery Road

#13-03

Singapore 049909

Tel: (65) 224-6177

Fax: (65) 224-6176

 

First Chicago NBD

9 Raffles Place

#29-02 Republic Plaza

Singapore 048619

Tel: (65) 438-2488

Fax: (65) 438-2070

 

Marine Midland Bank N.A.

21 Collyer Quay

#12-00 Hong Kong Bank Building

Singapore 049320

Tel: (65) 225-7282

Tel: (65) 225-1519

 

Merrill Lynch International Bank Ltd

2 Raffles Link

4th & 5th Storey

Marina Bayfront

Singapore 039392

Tel: (65) 334-3368

Fax: (65) 331-3500

 

Morgan Guaranty Trust Co. Of New York

6 Shenton Way

#32-08

DBS Building Tower 2

Singapore 068809

Tel: (65) 220-8144

Fax: (65) 326-9981

 

Nations Bank, N.A.

80 Raffles Place

#30-20 UOB Plaza 2

Singapore 048624

Tel: (65) 230-2300

Fax: (65) 230-2302

 

Republic National Bank of New York

143 Cecil Street

#01-00 GB Building

Singapore 069542

Tel: (65) 224-0077

Fax: (65) 225-5769

 

The Philadelphia National Bank

6 Battery Road

#13-03

Standard Chartered Building

Singapore 049909

Tel: (65) 224-6177

Fax: (65) 224-6170

 

The Northern Trust Company

80 Raffles Place

#46-02 UOB Plaza 1

Singapore 048624

Tel: (65) 437-6666

Fax: (65) 437-6659

 

The First National Bank of Boston

150 Beach Road

#07-00 Gateway West

Singapore 189720

Tel: (65) 296-2366

Fax: (65) 296-0998

 

The Chase Manhattan Bank N.A.

150 Beach Road

Gateway West

#35-00

Singapore 189720

Tel: (65) 291-1298

Fax: (65) 392-7259

 

The Bank of New York

1 Temasek Avenue

#02-01 Millenia Tower

Singapore 039192

Tel: (65) 432-0222

Fax: (65) 337-4302

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Singapore09 Singapore: Business Travel <A>=Singapore

 

 

Chapter IX.  Business Travel

 

Business Customs

Business discussions are straightforward. English is widely spoken and most businesspeople are skilled and technically knowledgeable. Most agents/distributors have visited the United States and often handle several U.S. product lines.  Corruption is virtually non-existent.

     

Many Singapore business people are ethnic Chinese, and many of them will have “Christian” first names (e.g., Albert Lim, Sally Lee).  Those who do not will have only their Chinese name on their business card, in which case the family name is listed first.  Mr. Lim Siew Fook would be addressed as “Mr. Lim” and Mrs. Tan Lee Yik as “Mrs. Tan”.  For the sake of politeness and respect, it is wise to address a business person by the last name rather than the first name - unless an immediate rapport is developed.

     

Business cards are a must as they are immediately exchanged during business and social meetings.  The “Chinese” practice of presenting a business card with both hands is observed.  There is no need to have special business cards printed in Chinese, however.

 

Travel Advisory and Visas

While in a foreign country, a U.S. citizen is subject to that country's laws and regulations which sometimes differ significantly from those in the United States and do not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offences.  Persons violating the law, even unknowingly, may be expelled, arrested or imprisoned. Visitors should be aware of Singapore's strict laws and penalties for a variety of offences that might be considered minor in the United States, including jaywalking, littering and spitting, as well as the importation and sale of chewing gum.  Singapore imposes a mandatory caning sentence on males for vandalism offences.  Caning may also be imposed for immigration violations and other offences.  Penalties for possession, use, or trafficking in illegal drugs are strict, and convicted offenders can expect jail sentences and fines. Singapore has a mandatory death penalty for many narcotics offences.  Commercial disputes that may be handled as civil suits in the U.S. can escalate to criminal cases in Singapore and result in heavy fines and prison sentences.  There are no jury trials in Singapore.  Judges hear cases and decide sentencing.  The Singapore Government does not provide legal assistance except in capital cases.

 

Business Hours

Singapore is 12 hours ahead of Eastern Daylight Savings (or 13 hours ahead of E.S.T).  Business hours normally are 8:30 am - 5:30 pm, Monday-Friday, 8:30 am — 1:00 pm, Saturday.  Shops are open from 10:00 am — 7:00 pm.

 

Climate

Located a few degrees from the Equator, Singapore has a constant tropical climate year-round.  Daytime temperatures average between 85 and 90 degrees Fahrenheit.  Humidity is very high and rainshowers are frequent.  Temperatures at night average between 76 and 80 degrees.  All public buildings, indoor restaurants and taxis are air-conditioned.            

 

Clothing

Summer-weight suits/dresses, several dress-shirts, an umbrella and swimsuit are recommended.  Singapore business dress is shirt and tie for men, although one will not be out of place occassionally wearing a jacket.  Businesswomen wear conservative, light-weight attire.  Evening dinner-dress is a shirt and tie for men, a dress for women.

 

Communications and Power

In addition to having one of the world's best airports and container ports, Singapore features an exceptionally modern telecommunication system.  Electrical current is 220V, 50HZ.

 

Money and Currency    

Singapore's unit of currency is the Singapore Dollar.  Travelers' checks and currency may be exchanged in the baggage claim area at Changi Airport (at a reasonable good rate) or at any hotel (at a less favorable rate).  Singapore features dozens of Government-authorized "money changers" located in major shopping centres, who offer competitive rates and will usually accept U.S. travelers' checks as well as major currencies.  U.S. credit cards are widely accepted in hotels, restaurants and retail shops.

 

Tipping

Tipping is not customary in Singapore.  Restaurants automatically add a 10 percent service charge.

 

Transportation  

Taxis are abundant, metered, inexpensive and air-conditioned, and most drivers speak English.  Give drivers place names for the destination, as these are often more familiar than street names.  Traffic flow is quite good.  The Government limits the total number of cars on the road through heavy fees/taxes and imposes a S$3 surcharge on vehicles entering the Central Business District during much of the day.  In addition, an exceptionally clean, efficient subway system links the major business/shopping areas.

 

Visas and Travel documents      

A valid U.S. passport is required for tourist and business travel to Singapore. No visa is necessary for U.S. citizens visiting Singapore. To facilitate regional travel, it is advisable to replace any passport with less than six months validity. 

 

Holiday Schedule          

The American Embassy closes on American and local holidays. The dates on which holidays are observed in 1999 are listed below:

 

January 1, Friday                          New Year's Day

January 18, Monday       Martin Luther King, Jr. Birthday

January 19, Tuesday      Hari Raya Puasa            

February 15, Monday     Washington's Birthday

February 16, Tuesday    Lunar New Year

& February 17, Wednesday

March 29, Monday                        Hari Raya Haji

April 2, Friday                   Good Friday

May 1, Saturday                             Labor Day (Singaporean)           

May 29, Saturday                          Vesak Day

May 31, Monday                            Memorial Day

July 5, Monday                Independence Day

August 9, Monday                         National Day (Singapore)

September 6, Monday    Labor Day (American)

October 11, Monday       Columbus Day

November 8, Monday     Deepavali

November 11, Wednesday          Veterans' Day

November 25, Thursday               Thanksgiving

December 24, Friday      Christmas

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>SingaporeA01 Singapore: Country Data <A>=Singapore

 

 

APPENDIX A: COUNTRY DATA

 

                                                                                                                      Estimate

1.  PROFILE                                                1995                       1996               1997                                

Population, including non-

  residents (million)                                     3.39                        3.45                3.52

 

Population growth (percent)                     1.9                          1.9                   1.9

 

Major religions                                            Christianity, Taoism, Buddhism, Islam, Hinduism

 

Government System                                  Unicameral parliament, universal suffrage with elections held every 5 years

 

Official languages

 (in order of usage)                                     English, Mandarin, Malay and Tamil

 

Work Week                                                  5 and 1/2 days (44 hours)

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>SingaporeA02 Singapore: Domestic Economy <A>=Singapore

 

 

APPENDIX B: DOMESTIC ECONOMY (1)

                                                                                                                             

                                                                       1995                       1996               1 Qtr 1997

 

Exchange Rate                                           1.4174                   1.4101            1.4451                                                                                                                

GDP (US$ M at 1990 prices)                    72423.0                 77857.7          19211.8               

GDP Growth Rate (percent)                     8.8                          7.0                   3.8                                                

GDP per capita (US$)                                21757.0                 26041.9          n.a                                                                                                                      

Government Spending

 (pct of GDP)                                                12.8                        14.5                26.4

 

Inflation

 (pct change in CPI)                                   1.7                          1.4                   1.7                                                

Unemployment Rate (percent)                 2.0                          2.0                   1.8            

Forex  Reserves (US$ M)                          68672.6                 76413.6          78887.2

 

Foreign Debt (US$ M)                               n/a                          n/a                  n/a

 

Debt-Service Ratio                                     n/a                          n/a                  n/a                                               

U.S. Economic /

 Military Assistance                                    None                      None              None

 

Note:

 

(1)  All dollar figures were originally denominated in Singapore dollars.  They were converted to U.S. dollars using exchange rates (averaged over each year) provided by the Monetary Authority of Singapore.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>SingaporeA03 Singapore: Trade <A>=Singapore

 

 

APPENDIX C:  TRADE (1)

                                                                                 1995                     1996      

Total Exports (US$ M)                                          118184.4             125006.0                            

Total Imports (US$ M)                                          124392.2             131326.4                                        

Exports to U.S. (US$ M)                                       18560.5               20340.4

  as pct of total exports                                         16%                      17%

                                                                                

Imports from U.S. (US$ M)                                  15333.2               16685.5

  as pct. of total imports                                        13%                      13%

                                                                                                             

Trade Balance with U.S.(US$ M)                       3227.3                 3654.9   

 

Trade Balance with

 Malaysia (US$ M)                                                3414.6                 2790.5                                 

Trade Balance with

 Japan (US$ M)                                                     -17089.2              -13589.1                                         

Trade Balance with

 Hong Kong (US$ M)                                           6019.1                 6925.7   

 

Top 5 U.S. Exports to

 Singapore (US$ M):                                                                                                                       

  electronic equipment (disk

    drives, automated data

    processing machine parts,

    turbojets and parts, oil/

    gas equip.)                                                         4026.7                 4658.4

 

  electrical machinery and parts

    (microprocessors, wafers/chips,

    circuits, magnetic discs)                                  5254.3                 5901.6

  aircraft and parts                                                 1271.4                 1293.3

 

  opt./photographic

/meas. devices                                                      699.4                    828.2

 

  plastics/plastic articles                                       519.0                    524.5

                                                                                

Top 5 U.S. Imports from

 Singapore (US$ M):                                                                                               

  automated data processing

    equipment (disk drives,

    printers, scanners, monitors) 11687.2          13565.2

 

  electrical machinery and parts

    (wafers/chips, circuits,

    telecom equip., hi-fi, VCRs)                            4325.0                 4178.4

 

  U.S. goods returned after

    partial assembly (electronics) 405.0              556.6

 

  organic chemicals                                              557.0                    521.9

 

  opt./photo./measuring devices                         382.4                    354.3

                                                                                                                             

Notes: (1)  All data reflects merchandise trade only; services are excluded.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>SingaporeA04 Singapore: Investment Statistics <A>=Singapore

 

 

APPENDIX D:  INVESTMENT STATISTICS

 

Table A

 

Cumulative Foreign Investments in Manufacturing

By Country of Origin, 1993-1996

(measured by gross fixed assets)

                             1993                    1994                    1995                    1996

                                                                                                                  

U.S.                     6,817.7                7,937.7                9,468.0                10,529.7

Japan                  6,137.5                7,069.5                8,461.3                9,100.8

Europe                5,626.3                6,124.1                6,845.6                6,819.4

EU                       5,349.7                5,810.5                6,467.5                6,422.2

UK                       1,882.0                2,019.8                2,331.0                2,158.7

Netherlands       2,256.5                2,482.7                2,609.0                2,653.0

Germany            446.2                   542.8                   667.4                   787.2

France                415.3                   421.6                   508.0                   477.3

Other EU

  Countries         349.7                   343.1                   352.1                   346.1

Switzerland        196.8                   211.5                   258.9                   283.7

Other European

  Countries         79.8                     102.8                   119.2                   112.8

Other

 Countries          911.6                   1,276.0                1,580.4                1,511.2

                                                                                                                  

Cumulative  Foreign

 Investment   19,492.5         22,407.4        26,356.0          27,961.1

 

 

Source: Economic Development Board

 

 

Table B

 

Net Foreign Investment Commitments in Manufacturing

By Country of Origin, 1994-1997

 

                                                1994               1995               1996               1997

                                                                                                                       

U.S.                                        1,605.1           1,464.5           1,604.1           1,593.4

Japan                                     598.3              813.1              1,390.3           1,369.2

Europe                                   593.8              1,076.8           985.1              958.8

EU                                          584.7              1,065.9           936.5              941.8

UK                                          343.8              544.4              282.0              299.8

Netherlands                          115.0              276.1              366.9              259.1

Germany                                60.1                129.7              174.7              81.7

France                                   35.4                99.1                41.9                182.9

Italy                                         25.5                9.0                   38.2                117.9

Other EU

  Countries                            5.0                    7.5                   32.4                0.5

Switzerland                           7.5                   9.3                   42.6                17.0

Other European

  Countries                            1.8                   1.6                   6.0                   -  

Others Countries                 35.9                69.0                74.3                57.6

                                                                                                                       

Cumulative Foreign

 Investment                           2,833.2           3,423.5           4,053.8           3,979.1

                                                                                                                       

Source:   Economic Survey of Singapore, 1997

 

 

Table C

 

Cumulative Investments in Manufacturing

By Major Industry Group, 1993-1996

(measured by gross fixed assets)

 

                                                1993               1994               1995               1996

Food, beverages &   

 Tobacco                                1,356.6           1,444.3           1,741.2           1,868.7

Textiles                                  145.4              152.5              149.6              148.9

Wearing apparel                  253.1              268.4              263.9              258.1

Leather products & 

 Footwear                              34.0                35.4                36.7                27.7

Wood/wood products          105.2              93.6                98.1                93.6

Paper products                     486.4              570.9              612.4              635.4

Publishing &

 Printing                                 947.5              992.5              1,273.5           1,373.7

Refined petroleum

  products                               4,985.8           5,669.1           6,011.7           6,379.0

Chemicals &

 chemical products              3,074.6           3,533.5           4,259.2           4,423.8

Rubber & plastics

 Products                               862.1              1,011.5           1,259.3           1,365.2

Non-metallic

 mineral products                 625.1              675.0              884.7              1,024.8

Basic metal

 Industries                             373.8              404.6              452.9              378.7

Fabricated metal

 Products                               1,727.3           2,005.4           2,339.5           2,619.7

Machinery &

 Equipment                           2,070.2           2,297.4           2,647.1           2,928.2

Electrical

 Machinery/apparatus 912.9                      1,050.8           1,330.6           1,331.8

Electronic products

 & components                     6,198.8           7,578.9           9,590.1          11,522.6

Instrumentation

 Equipment                           479.6              536.9              615.2              668.0

Transport equipment           1,903.1           2,269.2           2,594.2           2,661.5

Other manufacturing

 Industries                             451.8               538.8              601.1              548.2

                                                                                                                       

Total                                       26,991.6         31,128.7         36,760.3         40,257.4

 

Source: Economic Development Board

 

Table D

Net Investment Commitments in Manufacturing

By Major Industry Group, 1994-1997

 

                                                1994               1995               1996               1997

                                                                                                                       

Food, beverages &

 Tobacco                                23.8                73.2                159.3              112.7

Textiles                                  -                       2.3                   1.6                   -  

Wearing apparel                  -                       -                       7.2                   0.3

Leather products &

 Footwear                              1.7                   18.7                -                       5.7

Wood & wood products  -                            2.8                   11.4                -  

Paper products                     175.7              99.2                210.7              111.9

Publishing &

 Printing                                 780.9              935.0              1,698.0           1,332.8

Refined petroleum

 Products                               74.6                174.5              239.1              158.7

Chemicals & chemical

 Products                               772.8              837.0              76.8                391.5

Rubber & plastics

 Products                               17.6                20.2                73.0                67.8

Non-metallic mineral

 Products                               135.4              30.4                59.9                57.7

Basic metal

 Industries                             4.3                   45.0                6.7                   75.4

Fabricated metal

 Products                               212.5              225.0              212.1              239.4

Machinery &

 Equipment                           181.0              244.4              253.4              226.4

Electrical machinery

 & apparatus                         18.9                35.5                3.3                   83.8

Electronic products

 & components                     990.8              1,789.6           2,474.4           2,563.2

Instrumentation

 Equipment                           363.6              211.7              176.9             242.4

Transport equipment           12.8                47.3                58.6                47.2

Other manufacturing

 Industries                             7.8                   12.1                11.3                -  

                                                                                                                       

Total                                       3,774.1           4,803.9           5,733.7           5,716.9

Source:   Economic Survey of Singapore, 1997

 

Table E

 

Singapore’s Direct Equity Investment Abroad

By Country of Destination, 1992-1995

 

                                                1992               1993               1994               1995

                                                                                                                       

Asia                                        5,598.5           7,240.7          11,883.3         15,209.6

 

   Asean                                 2,977.1           3,797.9           6,627.0           8,815.0

     Brunei                               54.1                46.6                52.7                26.2

     Indonesia                         199.4              385.6              1,367.2           2,438.0

     Malaysia                           2,381.3           2,872.5           4,449.9           5,165.1