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U.S. Department of State
Singapore Country Commercial Guide
Office of the Coordinator for Business Affairs
SINGAPORE COUNTRY COMMERCIAL GUIDE 1996
This Country Commercial Guide (CCG) presents a comprehensive look at
Singapore's commercial environment through economic, political and
market analysis.
The CCGs were established by recommendation of the Trade Promotion
Coordinating Committee (TPCC), a multi-agency task force, to consolidate
various reporting documents prepared for the U.S. business community.
Country Commercial Guides are prepared annually at U.S. Embassies
through the combined efforts of several U.S. government agencies.
TABLE OF CONTENTS
Chapter I Executive Summary
Chapter II Economic Trends and Outlook
--Country Overview
--Economic Summary
--High Growth, Low Inflation
--Growth Sectors
--Trade Continues to Expand
--Singapore's "External Wing": Investing Abroad
--Balance of Payments Surplus
--The 1995 Budget
--Prospects for 1995: Growth Moderating But Still Strong
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
--Advertising and Sales Promotion
--Pricing Product
--Sales Service/Customer Support
--Selling to the Government
--Need For A Local Attorney
--Agricultural Products
Chapter V Leading Sectors for U.S. Exports and Investment
--Best Prospects for Non-Agricultural Goods and Services
Infrastructure
Electronics
Consumer Goods
Defense Trade
Singapore As A Regional Distribution Center
20 Best Prospect Sector Profiles
--Best Prospects for Agricultural Goods and Services
5 Best Prospect Sector Profiles
--Significant Investment Opportunities
Chapter VI Trade Regulations and Standards
--Trade Barriers
--Customs Valuations
--Import Licenses
--Export Controls
--Import/Export Documentation
--Temporary Entry
--Labeling, Marking Requirements
--Prohibited Imports
--Standards
--Free Trade Zones/Warehouses
--Special Import Provisions
--Membership in Free Trade Arrangements
Chapter VII Investment Climate
--Investment Policy
--Openness to Foreign Investment
--Taxes and Duties
--Conversion and Transfer Policies
--Performance Requirements/Incentives
--Rights of Ownership and Establishment
--Regulatory System
--Labor Conditions
--Efficient Capital Markets and Portfolio Investment
--Capital Outflow Policy
--Expropriation and Compensation/Dispute Settlement
--Acquisitions, Mergers and Takeovers
--Investment Incentives
--Incentives for Local Companies
--Protection of Property Rights
--Political Violence
--Bilateral Investment Agreements
--OPIC and Other Investment Insurance Programs
--Foreign Investment Statistics
Chapter VIII Trade and Project Financing
--Brief Description of Banking System
--Foreign Exchange Controls Affecting Trading
--Sources of Financing
--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: FY 1996 Trade Event Schedule
Appendix H: Intellectual Property Laws
Appendix I: Singapore Investment Incentives
Chapter I. Executive Summary
Singapore was the United States' tenth largest export market in 1994; a
bigger customer than better known markets such as Hong Kong, Indonesia,
Italy or Spain. Singapore boasts one of the most developed industrial,
commercial, financial and consumer economies in the world and is an
excellent market for U.S. products. Singapore's role as the gateway to
Southeast Asia means that almost any American product can find an
interested buyer here, either for Singapore itself or for one of
Singapore's own trading partners in the booming Southeast Asian region.
Shipments from the U.S. accounted for about $15.9 billion or 15.2
percent of Singapore's total imports in 1994, consisting largely of data
processing machines, electronic components, chemicals, and aircraft and
parts.
Singapore is overwhelmingly dependent on foreign trade, which totaled
about three times the country's GDP in 1994. Singapore maintains very
few import duties or non-tariff barriers to trade. The country's role
as a regional commercial hub is underscored by the fact that about 37
percent of Singapore's total imports are re-exported. Singapore's major
exports are refined petroleum products, electronics and disk drives.
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 1994 reached US$198.8 billion, of which
US$102.4 billion were imports and US$96.4 billion were exports.
Singapore buys an incredible variety of U.S. goods both for internal
consumption and for reexport. Many American companies use Singapore as
their distribution center for Asia, or rely on Singapore companies to
market their products in neighboring countries such as Malaysia,
Indonesia, Thailand, Vietnam and the Philippines. Singapore is a major
entrepot and a natural gateway to Asia for American firms. Major U.S.
exports to Singapore include electronics, aircraft, chemicals and
computers, but almost any U.S. product can find a buyer here. A large
portion of Singapore's exports to the U.S. are manufactured by U.S.
multinational corporations (MNCs) and consist of components or semi-
finished products destined for further assembly in the United States.
Singapore's economy, which experienced robust, double-digit real GDP
growth in 1993 and 1994, moderated somewhat to a still impressive 7.2
percent in the first quarter of 1995. Continued strong demand in key
export markets, as well as rapid growth in neighboring countries, should
continue to fuel a sustained expansion of 7 to 8 percent per annum.
Inflation remains low with an appreciating Singapore dollar controlling
price increases of imported inputs. New investment reached a record
$3.8 billion in 1994. Rising business costs and maintaining Singapore's
competitive position are concerns for Singapore businesses and
policymakers alike. Singapore's fiscal position remains very strong
with huge balance of payments and budget surpluses recorded each year.
Its regional economic role is also growing as the size, diversity and
number of its external investments expands.
Singapore government policies and the country's excellent infrastructure
have attracted investment from over 3,000 multinational corporations.
Approximately 1000 U.S. companies have operations in Singapore. Foreign
investment accounted for about 74 percent of total investment in
Singapore in 1994, amounting to an estimated $2.9 billion. Singapore's
Economic Development Board reports that U.S. investment in Singapore
accounted for about 55 percent of total foreign investment commitments
in 1994.
Singapore encourages investment in high value-added industries in an
effort to overcome Singapore's chronically tight labor market and
maintain the Republic's competitive edge over its neighbors. The
Government also encourages local firms to invest abroad in the emerging
economies of east and south Asia, in the hope that they will eventually
become multinational corporations in their own right. The Government is
taking the lead by developing industrial parks in China, India and
Indonesia. It courts Western and Japanese business to invest in these
parks, often as partners with local companies, and to use Singapore as a
base for regional operations.
Country Commercial Guides are available on the National Trade Data Bank
on CD-ROM or through the Internet. Please contact STAT-USA or 1-800-
STAT-USA for more information. To locate Country Commercial Guides via
the Internet, please use the following World Wide Web address:
WWW.STAT-USA.GOV CCGs can also be ordered in hard copy or on diskette
from the National Technical Information Service (NTIS) at 1-800-553-
NTIS.
Chapter II. Economic Trends and Outlook
Country Overview
Singapore is a small, prosperous city-state sitting astride one of the
world's busiest sea lanes. Its population of 3 million has seen living
standards rise steadily, guided by the Government's very successful
export-driven economic strategy. Per capita GDP reached US$16,700 in
1994 and quality of life in the Republic has attained developed country
standards. The Port of Singapore - the world's second busiest in terms
of cargo tonnage - is the key to its growing prosperity and continued
economic health. Because of its port, Singapore acts both as the
trading and distribution hub for the fast-expanding economies of
Southeast Asia, as well as the major transhipment point linking the
region to the rest of the world. In addition to trade, Singapore has
established itself as an important manufacturing base, specializing in
higher value-added production, as well as a financial center for the
region as a whole.
Economic Summary
Singapore's economy experienced robust 10 percent real GDP growth in
1993 and 1994. First quarter 1995 growth moderated somewhat to a still
impressive 7.2 percent. Continued strong demand in key export markets,
as well as rapid growth in neighboring countries, should continue to
fuel a sustained expansion of 7 to 8 percent per annum. Inflation
remains low with an appreciating Singapore dollar controlling price
increases of imported inputs. New investment reached a record S$5.8
billion (US$3.8 billion) in 1994, although rising business costs, and
maintaining Singapore's competitive position are a concern for Singapore
business and policymakers alike. Singapore's fiscal position remains
very strong with huge balance of payments and budget surpluses recorded
each year. Its regional economic role is also growing as the size,
diversity and number of its external investments expands.
High Growth, Low Inflation
Singapore, riding the crest of rapid growth in regional economies and
sustained recoveries in key export markets, recorded 10.1 percent real
GDP growth in 1994. This marked the second year in a row that the city-
state's growth rate reached double-digit levels. First quarter 1995
growth slowed to a still impressive 7.2 percent. This "slowdown"
generally has been welcomed by analysts as a rate more in line with
longterm growth projections and a sign the economy is not overheating.
The Embassy predicts the real GDP growth rate will remain in the 8
percent range for the remainder of 1995.
Although Singapore has seen two years of exceptional economic expansion,
inflation has remained low. In 1994, inflation rose slightly, from 2.4
percent in 1993 to 3.1 percent, partly as a result of the 3 percent
Goods and Services Tax (GST) introduced in April 1994. The first
quarter of 1995 saw inflation drop back to 2.5 percent and the
expectation for the remainder of 1995 is that the rate will stay close
to this level. The steady appreciation of the Singapore dollar, which
has kept the price of imports low, has been Singapore's main tool for
controlling inflation, though there are fears it is hurting Singapore's
export competitiveness. The average prime lending rate rose from 5.61
percent in 1994 to 6.49 percent at the end of March 1995. Analysts
expect lending rates to trend upward slowly for the remainder of the
year.
Growth Sectors
Manufacturing and financial/business services continue to be the most
important sectors of the Singapore economy, making up 26.9 percent and
29.5 percent of GDP respectively. The construction sector - benefiting
from a sharp rise in private sector demand - registered the fastest
sectoral growth (15.7 percent) for 1994.
The electronics industry remains the manufacturing sector's star
performer, responsible for 41.9 percent of value-added in manufacturing
and approximately 12 percent of Singapore's GDP overall. Electronics
output grew 21.7 percent in 1994 over 1993 and another 16.7 percent in
the first quarter of 1995 over the same period a year earlier.
Singapore manufactures roughly half of the world's supply of computer
disk drives, and exports significant volumes of other computer
peripherals, all of which have enjoyed burgeoning global demand.
The financial services sector, which has expanded rapidly in recent
years, grew 9 percent in 1994, down slightly from 13 percent a year
earlier. This scaled-back growth is attributed to a decline in stock
market turnover in 1994. The domestic and offshore banking, foreign
exchange, financial futures and insurance industries, however, all
posted strong growth in 1994.
The first quarter of 1995 saw investment commitments in the
manufacturing sector reach S$1 billion (US$705 million). Two thirds of
these commitments came from foreign companies, with the U.S. the largest
investor at S$350 million (US$247 million). The U.S. stock of foreign
investment in 1993 (the most current year for complete data) is
estimated to be US$8.8 billion, with concentrations largest in the
petroleum, chemical and electronics industries.
Trade Continues to Expand
Trade, historically Singapore's economic lifeline, has grown rapidly in
recent years. Except for the very occasional slowdown, annual levels of
trade have regularly recorded double-digit expansion, equalling
approximately three times GDP. 1994 was no exception as total trade
grew 21 percent by volume and 18 percent by value to total S$303.7
billion (US$198.8 billion). The Port of Singapore, the Republic's
outlet to the rest of the world, recorded over 100,000 ship arrivals and
departures in 1994 and handled a total of 10.4 million TEUs (Twenty-Foot
Equivalents) during the year.
Both imports and exports expanded strongly in 1994. Exports rose by 23
percent to S$147.3 billion (US$96.4 billion) while imports grew 14
percent to S$156.4 billion (US$102.4 billion). In 1994, Malaysia
displaced the U.S. as Singapore's largest export market, accounting for
19.9 percent of exports, compared to 18.9 percent for the U.S. Once
again, Japan was the largest source of Singapore's imports, accounting
for 22.1 percent, while the U.S. was third (behind Japan and Malaysia)
at 15.3 percent. Singapore's trade surplus with the U.S. in 1994 nearly
doubled from that of a year earlier, reaching S$3.74 billion (US$2.45
billion).
Rapid expansion continued into the first quarter of 1995, as exports and
imports grew 26.0 percent and 13.9 percent respectively. Non-oil
exports, a key indicator of Singapore's economic resilience, increased
by an impressive 24.1 percent during the first quarter of 1995,
totalling S$19.8 billion (US$13.9 billion). Growth was largely in
exports of integrated circuits, microcomputers, computer parts and
peripherals. Oil exports for the first quarter totalled S$3.4 billion
(US$2.4 billion), an expansion of 8.8 percent and sharply higher than
the 3.9 percent contraction recorded in 1994.
Staying Competitive in the Face of Rising Business Costs
One area of concern for both corporate executives and government
policymakers has been the increasing cost of doing business in
Singapore. Rising wages, rents, government fees and an appreciating
Singapore dollar - up 10 percent in 1994 against the U.S. dollar and
another 2.9 percent in the first quarter of 1995 - have all cut into
corporate profits. Unit Business Costs for manufacturing (an index
which includes wages, rents, services, and government fees) rose 5.6
percent in the first quarter of 1995, the largest quarterly increase
since 1991. These increases, combined with a slower rate of
productivity growth (2.8 percent for first quarter 1995 versus 5.3
percent in 1994 as a whole), resulted in an erosion of Singapore's cost-
competitive position at the beginning of 1995. Singapore has a
chronically tight labor market which fuels rising labor costs. The
unemployment rate in March 1995 was 1.7 percent, down from 2.2 percent
in December 1994, and essentially unchanged from the 1.6 percent of
March 1994. Real wages rose 5.2 percent in 1994, more than double the
2.4 percent increase seen in 1993. To meet labor demand, approximately
18 percent of Singapore's workforce is imported from neighboring
countries.
Singapore's strategy to address the competitive challenge is
multifaceted: increase productivity, upgrade skills, improve its already
first-rate infrastructure capabilities and offer a wide array of
incentives to attract higher value-added industries. These are all seen
as ingredients necessary to ensure Singapore's continued economic
prosperity in the face of stiff competition from its fast-growing,
lower-wage neighbors. Various government bodies, including the Economic
Development Board (EDB), the Trade Development Board (TDB) and National
Science and Technology Board (NSTB) work closely with the private sector
to attract new industry to Singapore and to encourage expansion by those
that are already operating here.
Singapore's "External Wing": Investing Abroad
Recognizing that future growth will depend on overcoming resource
limitations and a small domestic market, the Singapore government has
vigorously encouraged local firms to regionalize their operations and
invest abroad. The political leadership, including Prime Minister Goh
Chok Tong, Senior Minister Lee Kuan Yew and Deputy Prime Minister BG Lee
Hsien Loong, have all strongly supported these efforts and have
personally led Singaporean business delegations to a wide range of
countries promoting outward investment. Although the Government
continues to encourage Singaporean companies to invest in industrialized
economies as a means of boosting Singapore's technological capabilities,
the fast-growing markets of Asia have been given a higher public profile
in recent years.
Singapore's total direct investment abroad grew to S$28.2 billion
(US$17.5 billion) by the end of 1993. This was an increase of 25.5
percent over 1992. Manufacturing companies (S$6.7 billion, US$4.1
billion) and financial companies (S$8.9 billion, US$5.5 billion), were
the largest overseas investors, accounting for 73.9 percent of the
total. As a sign of its growing preference to invest in Asia, by the
end of 1993 54 percent of Singapore's direct equity investments abroad
were in Asia, compared to 49-52 percent between 1990-1992. More than a
quarter of Singapore's total direct equity investments abroad were in
ASEAN members, with Malaysia as Singapore's number one investment
destination at S$4.7 billion (US$2.9 billion), 21.9 percent of the
total. Hong Kong was second with S$4.0 billion (US$2.5 billion) or 19.0
percent, followed by the Netherlands Antilles, S$2.8 billion (US$1.7
billion), and the U.S., S$1.8 billion (US$1.1 billion).
Through many of its "government-linked companies" (companies in which
the Government has an equity stake) as well as private local companies,
the Government has given special attention to a series of high profile
joint venture projects in a variety of Asian countries including
Indonesia, India, and, most prominently, China. All of these projects
draw on Singapore's strengths in logistics, planning and management.
The largest of these projects is the 70 sq. km. industrial township
currently being built by a joint Singapore-China consortium near Suzhou,
China. Other large projects include the Batam Industrial Park and
Bintan Industrial Estate in Indonesia, the Bangalore Information
Technology Park in India, the Wuxi-Singapore Industrial Park in China
and a host of port and airport expansion projects throughout the region.
Balance of Payments Surplus
Singapore's balance of payments (BOP) surplus - which reached a record
S$12.2 billion (US$7.6 billion) in 1993 - fell to S$7.3 billion (US$4.8
billion) in 1994, mainly due to a drop in the capital account surplus
reflecting reduced monetary inflows and accelerated outflows of
Singapore investments abroad, and an increase in unidentified outflows.
Singapore's current account surplus increased from S$8.4 billion (US$5.2
billion) in 1993 to S$18.3 billion (US$12.0 billion) in 1994 mainly due
to a 23 percent increase in non-oil exports, particularly electronics
exports, and moderation of non-oil imports. Total official reserves
grew to S$85.2 billion (US$58.2 billion) at the end of 1994, equal to
6.5 months of imports.
The first quarter 1995 BOP surplus increased to S$2 billion (US$1.4
billion), up from S$1.2 billion (US$816 million) during the last quarter
of 1994, reflecting a sharp turnaround in the monetary capital account.
The current account surplus grew to S$6.1 billion (US$4.3 billion) for
the first quarter of 1995, more than triple the level of a year earlier.
The capital account balance switched from a net outflow of S$2.4 billion
(US$1.6 billion) in the fourth quarter of 1994 to a net inflow of S$3.8
billion (US$2.7 billion) in the first quarter of 1995 as banks reduced
their foreign lending in the face of turmoil in international foreign
exchange markets.
The 1995 Budget
The FY 1995 budget increased government spending for development
(education, public housing, infrastructure, hospitals and defense) by 46
percent to S$6.7 billion (US$4.7 billion), while returning S$1 billion
(US$705 million) of FY 1994's S$7 billion (US$4.6 billion) budget
surplus to Singaporeans in the form of personal income tax rebates and
government contributions to housing and retirement schemes. With two
years of double-digit GDP growth just completed and business expansion
still strong, the Government decided to postpone any new corporate or
personal income tax cuts, saying they were unnecessary in the current
business environment. The new budget also contains a number of new
incentives aimed at expanding the fast-growing financial sector, as well
as several additional provisions to encourage Singaporean companies to
venture abroad.
The Government's operating revenue is expected to rise 8.6 percent to
S$24.2 billion (US$17.3 billion), or about 21.3 percent of GDP. With
total expenditure estimated to increase 21.1 percent to S$18.5 billion
(US$13.3 billion), or 16.3 percent of GDP, the Government will have an
operating budget surplus of S$5.7 billion (US$4.1 billion). The overall
budget surplus, however, is projected to be much larger - approximately
S$9.3 billion (US$6.7 billion) - after the Government adds investment
income and capital receipts to its coffers.
Prospects for 1995: Growth Moderating But Still Strong
The Embassy expects Singapore's GDP to expand in real terms between 7
and 8 percent in 1995. Official pronouncements by the Singapore
government have strongly hinted that the double digit growth experienced
in 1993 and 1994 can no longer be sustained nor is desirable. Business
expectations, nevertheless, remain very optimistic. In a survey of
business expectations conducted by the Ministry of Trade and Industry,
all industries polled, with the exception of the chemical and textile
industries, expect strong growth in the months ahead.
Singapore, more than any other country, relies on external demand to
power its economic expansion. In the first quarter of 1995, external
demand accounted for 98 percent of total demand growth. As long as the
world economy continues on its current expansionary track, its Asian
neighbors continue to grow, and Singapore contains upward cost
pressures, the prospects for the next several years will remain bright.
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 24 years on the job. The political
succession was achieved with what some observers called "clockwork-like"
precision.
Mr. Lee's policies have changed little under his successor, 54-year-old
Goh Chok Tong. Moreover, Lee Kuan Yew continues to exercise
considerable influence as head of the dominant People's Action Party
(PAP) and as Senior Minister, a Cabinet position created expressly for
him. Thus, Singapore's political leadership remains dedicated to free-
market principles and to maintaining a first-rate infrastructure and
labor force.
The PAP's dominance was confirmed by results of the most recent General
Election, held in August 1991, in which it secured 77 out of 81 seats in
Singapore's single chamber Parliament. However, the opposition emerged
with an unprecedented net gain of three parliamentary seats, which
jolted the country's leadership out of its complacency. A by-election
held December 29, 1992 and a Presidential Election in August 1993
confirmed the popular support for the PAP establishment. The opposition
is not expected to upset the PAP's dominance at any time in the
foreseeable future.
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 markups
range from 20-40 percent, while retail markups 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 markups are very
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 is easy. 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) 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 Singapore firms
are looking for new growth opportunities and are interested in American
franchise concepts. Franchisees in Singapore are often private
individuals or family operations who buy franchises that are related to
their current business. Franchisees usually buy franchise licenses for
the Southeast Asia region and not just for Singapore alone. Most
franchisees finance their purchases of franchises through personal
savings, bank loans 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 10 years ago and
now includes direct mail, telemarketing and television sales. Direct
marketing through television began two years ago but is growing very
fast. There are approximately 20 creative consultants in Singapore,
each employing 10-20 employees, who provide advice, market research,
mailing lists, printing and mailing services. Five companies provide
telemarketing services and five others are involved in direct marketing
through television. There are numerous computer companies, including
IBM and Tandem and some local companies, that provide software to aid in
direct marketing. Typical products sold through direct marketing in
Singapore include consumer goods such as gifts, 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 will need to 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
fierce 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 and bargaining is tough. 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 all the difference. Unfortunately, U.S. companies have a
reputation for not supporting their distributors adequately in
Singapore. Newcomers to the Singapore market should bear this in mind
and plan accordingly.
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 USFCS Singapore.
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.
Agricultural Products
Processed and pre-packaged food products are imported by more than 300
large and small trading firms, of which about 80 are known to handle
U.S. foods. Imported product is brought in by importers cum agents cum
distributors. There are not many firms that act solely as agents or
importers. U.S. exporters can contact the U.S. Agricultural Trade
Office in Singapore for lists of major importers.
A significant portion of fruit imports are overseen by the Singapore
Fruit Exchange, which is an agglomeration of hundreds of small and large
fruit handlers who control well over 50 percent of the market. The
remaining fruits are brought in by supermarkets. Importers of fruit,
meat and poultry also act as agents and distributors, and often assist
end-users by helping to finance marketing efforts. Most fruits and
meats are sold at area hawker (food stall) centers which, because of
their low overhead, allow Singaporeans to purchase these products at
very reasonable prices. Higher end products, such as U.S. frozen beef,
are sold through supermarkets and restaurant outlets.
The Singapore retail sector is well developed and, in many ways, similar
to that of the U.S. Different retail chains attempt to exploit
different market niches. Retailers and supermarkets generally charge
slotting or listing fees for shelf space. The supplier may be expected
to pay an extra discount in relation to the amount of chiller, freezer,
or dry shelf-space needed. An administrative fee of S$660 may also be
required.
Suppliers must also negotiate with the retailer on the retail sales
price. As a general rule, retail price margins range from 15-20 percent
for dry product and 25-35 for frozen product. The retailer will usually
ask for volume discounts. Retailers will also require that the supplier
pay promotional fees. The normal charge is S$330. The supplier is
expected to absorb a price reduction of 10-20 percent off the retail
sales price.
Doing business with Singaporean importers is open and straightforward.
Product quality is important but prices must be competitive. U.S.
exporters should remember that the size of the market dictates that most
importers cannot handle single product containers and must depend on
consolidators in the U.S. Advertising is an important element of
marketing in Singapore and publications such as Asian Retailer, Retail
Asia and the Straits Times, one of Singapore's daily newspapers, are
commonly used by the food trade to promote branded products.
Chapter V. Leading Sectors for U.S. Exports and Investment
------------------------------------------------------
Best Prospects for Non-Agricultural Goods and Services
------------------------------------------------------
Infrastructure
Singapore is continually upgrading its already excellent infrastructure.
Current projects include a 4800 mw power plant at Tuas, a third terminal
at Changi International Airport, a major new container port, extension
of the subway, two light rail transit pilot projects and an additional
cellular telephone service provider by 1997. Major Singapore firms
actively and successfully pursue infrastructure projects throughout the
region and are receptive to the idea of partnerships with American
companies.
Electronics
The electronics industry's huge presence in Singapore offers an
excellent opportunity for U.S. electronics suppliers to follow their
domestic customers overseas. Almost all of the major U.S. players have
facilities here, and they are natural customers for U.S. suppliers
willing to pursue their business.
Consumer Goods
Singapore's per capita income is about US$16,000 and its three million
residents are an excellent market for consumer goods. Singapore hosts
more than six million visitors each year, and its impact on the consumer
goods market extends far beyond its boundaries, both in terms of actual
sales and as a role model for the region.
Defense Trade
U.S. exporters should not overlook Singapore's Ministry of Defense
(MinDef) as a potential customer. MinDef purchases military hardware
and non-military goods and services to support one of Asia's best
equipped armed forces. MinDef's budget for FY 94 is estimated at US$4
billion.
Singapore As A Regional Distribution Center
Small and medium-sized U.S. manufacturers can take advantage of
Singapore's many trading companies to penetrate the growing economies in
this region. Singapore is home to hundreds of trading companies that
have extensive family and business connections throughout Southeast
Asia. These trading companies handle a wide variety of products and can
introduce American goods throughout Southeast Asia. Some 3600 U.S.
companies already have representatives in Singapore, many of whom have a
regional focus.
(Exchange rates are S$ per US$1.)
1 - Electronic Components (ELC)
Electronics is a major industry in Singapore, accounting for 45.4
percent (or S$26.5 billion) of manufacturing output and 33.1 percent of
its employment. Investments by foreign multinational corporations in
Singapore's electronics industry amounted to S$1 billion in 1994. The
Singapore Government expects the electronics industry to continue to
post strong growth in 1995 and this should generate a high demand for
U.S. components. The major U.S. competitors are foreign suppliers from
Japan, Malaysia, Taiwan and Hong Kong. Singapore's imports exceed total
market size, reflecting Singapore's important role as an entrepot. Most
promising subsectors include integrated circuits, memory chips, ASICs,
DRAMs, disk drives, wafers, diodes, and transistors.
1994 1995 1996
A. Total Market Size 16490 19787 23744
B. Total Local Production 16334 19600 23520
C. Total Exports 16468 19761 23713
D. Total Imports 16624 19948 23937
E. Imports from the U.S. 3008 3609 4330
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
2 - Aircraft and Parts (AIR)
Singapore's aerospace industry, comprising primarily repair and overhaul
operations, continued to remain competitive in 1994, enabling it to gain
ground in the growing Asia-Pacific civil aviation market.
The output of Singapore's aerospace industry rose 4.8 percent to US$893
million in 1994. Repair and overhaul accounted for 89 percent of total
output. Manufacturing operations made up the remaining 11 percent,
including areas like constant speed drives, engine and aircraft
structural components, and avionics equipment. Aerospace is one of the
high value-added industries targeted by the Singapore Government in its
"National Technology Plan" for development. Singapore is evolving into
a world class aero-component manufacturing and overhaul center for the
world market. The aircraft component overhaul and manufacturing
industry has grown steadily at 10 percent annually over the last five
years, and is expected to continue growing at an accelerated pace well
into the 21st century. Including its SilkAir subsidiary, Singapore
Airlines currently has a fleet of 74 aircraft and it expects to continue
expanding to meet growing passenger demand in the Asia-Pacific region
and beyond. SIA plans to almost double its aircraft fleet by 2003.
Most promising subsectors are airplanes and aircraft components.
1994 1995 1996
A. Total Market Size 1514 1666 1833
B. Total Local Production 98 108 119
C. Total Exports 236 259 285
D. Total Imports 1652 1817 1999
E. Total Imports from U.S. 1404 1544 1698
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
3 - Industrial Process Control (PCI)
Optimism in this sector is due to buoyant growth of 13 percent in the
manufacturing industry in 1994. Growth in industries such as petroleum
refineries and petroleum products, cement, concrete products, plastics,
and electronic components has been at double digit levels for the past
three years. Process control equipment for these industries have good
sales prospects. Receptivity to U.S. equipment is very good as the
United States is perceived as the leader in this field. However, U.S.
companies are thought to lag behind in marketing support when compared
to major competitors like Japan and Germany.
1993 1994 1995
A. Total Market Size 1248 1435 1650
B. Total Local Production 543 597 660
C. Total Exports 1112 1252 1410
D. Total Imports 1817 2090 2400
E. Total Imp. from U.S. 759 835 915
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
4 - Oil/Gas Field Machinery (OGM)
Singapore's oil and gas industry has seen major investments in the
downstream sector with the development of a second petrochemical complex
estimated to cost US$2.1 billion. Other investments include a US$120
million fuel oil refinery, a US$900 million aromatics complex, a US$1.3
billion catalytic cracker and US$250 million worth of facilities
upgrading. With such heavy investments, the oil and gas sector will
continue to provide a steady demand for material supply and engineering
services. Since the recent appreciation of the Japanese yen, U.S.
products in the oil and gas sector have become more competitive. Most
promising subsectors: Pumps, Valves, Instrumentation, Piping and
Fittings and Engineering Services
1994 1995 1996
A. Total Market Size 490 539 593
B. Total Local Production 98 108 119
C. Total Exports 588 647 712
D. Total Imports 980 1078 1186
E. Total Imports from U.S. 426 468 515
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial figures.
5 - Electronics Industry Production/Testing Equipment (EIP)
Singapore is an excellent market for U.S. suppliers of production and
testing equipment for the electronics industry. It is the world's
largest manufacturer of disk drives and is a major producer of computers
and consumer electronics. There are more than 257 firms in Singapore's
electronics industry, with multinational corporations playing an
integral role. With a thriving electronics industry in Singapore and
growing electronics manufacturing centers in the region, there are
excellent opportunities for U.S. firms to sell their products to
Singapore and through Singapore to the surrounding region. Major
equipment suppliers include those from the U.S., Japan, and Europe.
Most promising subsectors include semiconductor fabrication/testing
equipment, disk drive fabrication/testing, and PCBA fabrication/testing
equipment.
1994 1995 1996
A. Total Market Size 1436 1580 1737
B. Total Local Production 430 473 520
C. Total Exports 729 801 882
D. Total Imports 1734 1908 2099
E. Imports from the U.S. 412 453 498
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
6 - Construction Equipment (CON)
The construction sector was a major contributor to the strength of the
Singapore economy in 1994. Construction demand for 1994, in terms of
contracts awarded, was US$7.53 billion. This is a 7 percent increase
over 1993's US$7.06 billion. The outlook for the industry in 1995 is
promising, pointing to a full-year figure of US$8.64 billion in value of
construction projects. The Singapore Government is the main force
behind this healthy construction climate, with commitments to major
projects such as the mammoth ten-year US$9.4 billion public housing
upgrading and retrofitting program, and several major infrastructure
projects including hospitals, schools, business parks, as well as the
construction and upgrading of roads, development of the airport,
upgrading of the public utilities distribution network and reclamation
projects. This means that there is 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 minimal local assembly, so the
market is dominated by imports. Most promising products are bulldozers,
shovels/excavators and road rollers.
1994 1995 1996
A. Total Market Size 420 461 507
B. Total Local Production 271 298 328
C. Total Exports 805 886 975
D. Total Imports 954 1049 1154
E. Total Imports from U.S. 369 406 447
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
7 - Laboratory & Scientific Instruments (LAB)
The Singapore government is actively supporting the manufacturing
industry to upgrade and introduce new technologies. Government spending
in research and development in 1992 reached US$583 million. Under the
National Technology Plan, the Singapore Government aims to increase
spending to 2 percent of 1995 GDP, which is projected to reach more than
US$50 billion. The Singapore Government has created awareness within
the industry of the need to obtain certification under the ISO 9000
program. This has boosted demand for analysis and test equipment. The
United States is the dominant supplier, followed by Japan and Germany.
Demand for analyzers of chemical and physical properties, and gas
chromatographs is expected to remain buoyant.
1994 1995 1996
A. Total Market Size 862 990 1140
B. Total Local Production 380 445 525
C. Total Exports 766 890 1035
D. Total Imports 1248 1435 1650
E. Total Imp. from U.S. 512 560 600
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
8 - Franchising (FRA)
Franchising remains a popular business concept in Singapore, especially
in established areas such as food, health and recreational services, and
new fields such as interior decoration. Several new townships,
including three regional centers in the outskirts, are in development
and will increase demand for franchise food and recreational services.
Moreover, there has been a buoyant supply of and demand for private
condominiums as Singaporeans upgrade their apartments, resulting in new
demand for fitness and recreation services. Total sales in 1994 were
approximately US$725 million, an increase of 12 percent over 1993's
estimated sales of US$650 million. Singapore's Trade Development Board
has been promoting the franchise concept and has helped launch 35
franchises covering 21 business sectors. In a survey of 62 franchisees,
more than 90 percent agreed that joining a franchise had helped them and
93 percent reported improvements in sales. Most promising subsectors
for 1996 include food, health and recreation, and apparel franchises.
1994 1995 1996
A. Total Sales 725 830 887
B. Sales by Local Firms 56 64 68
C. For. Sales by Local Firms 12 14 16
D. Sales by For.-Owned Firms 681 780 835
E. Sales by U.S. Firms 502 575 615
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
9 - Computer Hardware and Peripherals (CPT)
The Singapore information technology market is driven by the
Government's plan to make the country into an "intelligent island" by
the year 2000. Plans are set for an information infrastructure that
will link every home, office, factory, and school. U.S. vendors are
looked upon as market leaders in Singapore and will maintain their edge
as long as they continue to introduce state-of-the-art technologies and
products. Singapore is not only a good market for computers and
peripherals, but is also a major producer of such products. Most
promising subsectors include client-server systems and equipment,
desktop microcomputers, disk drives, terminals, and printers.
1994 1995 1996
A. Total Market Size 693 833 1000
B. Total Local Production 4645 5574 6689
C. Total Exports 6154 7384 8860
D. Total Imports 2203 2643 3171
E. Imports from the U.S. 591 626 663
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
10 - Medical Equipment (MED)
The market for medical equipment is expected to be buoyant for the next
two years, when the Singapore Government's hospital rebuilding projects
are scheduled for completion. To maintain Singapore's high standard of
healthcare, the Singapore Government has invested US$1.5 billion to
improve hospital facilities and programs. Private hospitals are also
gearing up their facilities to match the Government's. The market for
hospital fixtures and fittings offers good potential because of the
hospital rebuilding projects. Demand for surgical equipment used in
minimally invasive surgery (MIS) and day-surgery equipment should be
strong because of the Singapore Government's emphasis on capping
healthcare costs. High-technology equipment also has good potential but
it must already be proven in the medical field. Except for syringes,
surgical gloves, caps, gowns, and lower end products, other categories
of medical consumables are in good demand thanks to a higher awareness
of the need to contain infectious diseases. Competition from Japanese
and German manufacturers is keen. Receptivity to U.S. equipment is high
as the U.S. is considered to be in the forefront of medical technology.
1994 1995 1996
A. Total Market Size 176 210 252
B. Total Local Production 376 414 455
C. Total Exports 513 564 620
D. Total Imports 313 360 417
E. Total Imp. from U.S. 142 170 205
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
11 - Telecommunications Equipment (TEL)
Singapore's continued high economic growth is linked to the quality of
its infrastructure. Its very survival depends on trade and links with
the rest of the world. The presence of over 3,000 multinational
companies alone represents a huge demand for sophisticated
telecommunications services. Recognizing the critical importance of a
high quality telecommunications network, Singapore Telecom (ST) has
invested very heavily to ensure Singapore's telecommunications
preeminence in the region. ST invested US$370 million in 1994 to
enhance and upgrade its infrastructure and services. The result of this
heavy investment is a telecommunications infrastructure equal to or
better than any in the world. Singapore's telecommunications
infrastructure will be enhanced by additional investments from the newly
licensed cellular mobile phone and radio paging operators. This will
create more opportunities for the supply of telecommunications equipment
to Singapore, particularly in areas related to Intelligent Network
Systems, Broadband ISDN Network as well as transmitters & transmitter-
receivers and telephone sets.
1994 1995 1996
A. Total Market Size 3761 4081 4425
B. Total Local Production 4880 5368 5905
C. Total Exports 6174 7100 8165
D. Total Imports 5055 5813 6685
E. Total Imports from U.S. 320 352 387
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
12 - Pumps, Valves/Compressors (PVC)
This sector is expected to grow about five percent over the next year.
Strong demand for pumps, valves and compressors is expected to come from
the chemical process, oil and gas, power generation and environmental
sectors. The Singapore market is small compared to that of the region.
From the trade statistics it can be seen that total exports represent
approximately seventy percent of total imports in this sector. Re-
exports are expected to grow substantially in the medium to long term as
the regional economies continue to industrialize. Most promising
subsectors include: Centrifugal Pumps, Compressors for Refrigerating
Equipment, Pressure Reducing Valves, and Safety Valves.
1994 1995 1996
A. Total Market Size 941 988 1037
B. Total Local Production 475 499 524
C. Total Exports 1062 1115 1171
D. Total Imports 1528 1604 1684
E. Total Imports from U.S. 378 396 416
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial figures.
13 - Pollution Control Equipment (POL)
Industry analysts estimate that the Ministry of Environment (ENV) will
spend approximately US$2 billion on infrastructure projects by the end
of the decade. Projects will include the fourth incinerator, the
existing works on sewage tank covers and a landfill project on a nearby
island. Other potential projects will include measures to provide
filtered air in buildings and better technologies in treating solid
wastes. In the private sector companies such as Shell, Dupont and GE
Plastic are investing in technologies to control pollution in their
plants. ENV also has a private arm called SEMES involved in
environmental projects in the region. Most promising subsectors:
Instrumentation and Monitoring Equipment, Filtering and Purifying
Equipment, Fan Blowers, Environmental Engineering Services, and Waste
Treatment Facilities.
1994 1995 1996
A. Total Market Size 500 540 583
B. Total Local Production 96 104 112
C. Total Exports 224 242 261
D. Total Imports 628 678 732
E. Total Imports from U.S. 200 216 233
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
14 - Electrical Power Systems (ELP)
With the award of the first phase of development in the Tuas Power
Plant, the Public Utilities Board (PUB) is progressing on schedule to
complete the project by year 2005. Implementation of this 4,800 mw
power plant will require a steady stream of products and services for
the electric power sector for the next ten years. Co-generation plants
are also envisaged for the oil and gas industry with Shell recently
completing a US$36 million plant. PUB estimates that Singapore needs an
additional 250 mw capacity each year to maintain its growing industries.
PUB is expected to be corporatized this year and will seek to gain a
foothold in Asia's expanding power generation market. Most promising
subsectors include: Electric Plant and Parts, Power Generators,
Switchgears, Cables and Accessories, and Generating Sets.
1994 1995 1996
A. Total Market Size 886 930 976
B. Total Local Production 428 449 471
C. Total Exports 931 977 1026
D. Total Imports 1389 1458 1531
E. Total Imports from U.S. 196 206 216
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
15 - Cosmetics & Toiletries (COS)
Demand is expected to grow by a healthy 10 percent from 1995 to 1996 due
to increasing affluence and a greater awareness among Singaporeans of
the benefits of maintaining a good appearance. The strong tourist
market, as well as re-export business, has also boosted demand.
Prospects for perfumes, cosmetics, and skincare products remain
promising because nearly every working woman in Singapore adopts a
skincare and makeup routine once she enters the workforce. Statistics
from the Ministry of Labor show that in 1993 there were about 550,000
economically active women. A 1992 survey by the Labour Ministry, the
National Productivity Board and the National Trade Union Congress
revealed that 78 percent of the 300,000 women who did not work would be
returning to the workforce within the next two to three years. The
market for male products is growing thanks to persuasive promotion and
advertising. Upmarket American products are still favored by consumers
although mid-range products are slowly gaining acceptance among budget-
conscious consumers.
1994 1995 1996
A. Total Market Size 168 185 205
B. Total Local Production 30 31 33
C. Total Exports 278 324 378
D. Total Imports 416 478 550
E. Total Imp. from U.S. 64 75 85
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
16 - Household Consumer Goods (HCG)
Singapore is a nation of homeowners. There are 750,000 households in
Singapore, with an average of 4 members per household. 26,000 to 30,000
new households are formed annually. Today, 81 percent of the population
own the residences they live in. 164,000 new apartments and 50,000
residential units will be built between 1995 and 2000. With a per
capita income of more than US$16,000 and easy access to financing,
homeowners have money readily available to spend on household consumer
goods. The total market size in 1994 was US$667 million, an increase of
6 percent over 1993's US$629 million. Imports exceed total market due
to substantial volume of reexports to Malaysia, Hong Kong and Thailand.
Most promising subsectors for 1996 include household appliances,
housewares (inclusive of cooking utensils) and floor coverings.
1994 1995 1996
A. Total Market Size 667 767 828
B. Total Local Production 501 576 622
C. Total Exports 660 759 820
D. Total Imports 826 950 1026
E. Imports from U.S. 108 124 134
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
17 - Building Products (BLD)
Singapore's construction industry is expected to do well again in 1995
and 1996, expanding by 7 to 8 percent annually. The construction
industry is expected to record some US$8.64 billion worth of projects in
1995 with the public sector expected to invest US$5.36 billion in
infrastructure improvements. The bulk of the public contracts will go
to construction and retrofitting of Housing Board flats, building of
educational and health institutions, and industrial parks. For civil
engineering work, the main projects are expected to be the construction
and upgrading of roads, more development at the airport, upgrading of
the public utilities distribution network, and land reclamation
projects. Although private residential contracts are expected to
decline (due to an increasing supply), demand for commercial and
industrial construction should remain strong. It is projected that
private residential contracts for 1995 will be worth some US$1.36
billion and private commercial and industrial development will reach
US$679 million and US$1 billion respectively. These developments will
provide great opportunities for U.S. firms to supply building materials
to the Singapore construction industry, especially state-of-the-art
building products.
1994 1995 1996
A) Total Market Size 2528 2780 3058
B) Total Local Production 635 698 768
C) Total Exports 1097 1207 1328
D) Total Imports 2990 3289 3618
E) Total Imports from U.S. 77 85 94
F) Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
18 - Computer Software (CSF)
The Government of Singapore has identified software development as a key
element in its IT-2000 strategy to leapfrog into the 21st century.
Foreign suppliers dominate the market as there are very few indigenous
software developers in Singapore. With the Government's push to make
Singapore into an intelligent island by the year 2000, demand for
computer software will continue to grow strongly. U.S. firms, being
industry leaders, will continue to capture the lion's share of this
market. Most promising subsectors include business/technical
application software, office automation software,
game/entertainment/educational software, and services.
1994 1995 1996
A. Total Market Size 107 117 128
B. Total Local Production 298 327 359
C. Total Exports 352 387 425
D. Total Imports 161 177 194
E. Imports from the U.S. 80 88 97
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
19 - Sporting Goods/Recreation Equipment (SPT)
Sports and fitness are an integral part of Singapore's lifestyle.
Increased awareness of fitness is evident across virtually all age
groups. More people have the income and leisure time to participate in
sports contests. The Singapore Government is increasing expenditures on
sports and recreation, such as the US$7 million Sports Excellence 2000
scheme to help sportsmen and sportswomen achieve success in the Asian
and Olympic games. It is also encouraging people to give up habits that
are detrimental to health by reducing military service requirements for
fit male citizens and improving sports lessons taught in schools.
Popular sports include soccer, golf, aerobics, fishing, tennis, swimming
and boating. Over the past year, there has been an increase in demand
for amusement games and many amusement arcades were built. The total
market size in 1994 was US$186 million, an increase of 8 percent over
1993's US$172 million. Imports exceed total market due to the
substantial volume of re-exports to Malaysia, Japan, Hong Kong and
Brunei. Most promising subsectors for 1996 include golf clubs, equipment
and balls, fishing and hunting equipment, and coin-operated amusement
machines.
1994 1995 1996
A. Total Market Size 186 216 233
B. Total Local Production 55 64 69
C. Total Exports 136 158 171
D. Total Imports 267 310 335
E. Total Imp. from U.S. 70 81 87
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
20 - Hotel and Restaurant Equipment (HTL)
Tourism is a major industry in Singapore accounting for S$6 billion or
19.3 percent of the country's total service exports. Visitor arrivals in
1994 rose by 7.4 percent to 6.9 million. There are currently 74 hotels
in Singapore and according to official estimate, the number will rise to
113 by 1998. With new hotels coming on stream in the next few years,
many of the older hotels are refurbishing and renovating their premises
to meet the competition. There are already more than 1,500 restaurants
in Singapore. Their rapid growth, together with growth in the hotel
industry will result in good export potential for U.S. suppliers of
hotel and restaurant equipment and supplies. Many Singapore firms are
building hotels in other countries, including China, Thailand, Vietnam,
Indonesia, and Cambodia. Singapore's trade data also reflect the
country's importance as a regional distribution center. Most promising
subsectors include glassware, refrigerators/freezers/cold rooms, and
labor-saving equipment.
1994 1995 1996
A. Total Market Size 262 275 289
B. Total Local Production 160 168 176
C. Total Exports 325 341 358
D. Total Imports 427 448 470
E. Imports from the U.S. 79 83 87
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
--------------------------------------------------
Best Prospects for Agricultural Goods and Services
--------------------------------------------------
Several factors make Singapore an excellent market for consumer-oriented
food products -- the need to import most of its food, a high per capita
income, and a willingness to purchase imported goods. American
products, including major food brands, are popular among mid to upper
income consumers. Much of Singapore's food imports are intended for
transshipment to other Asian markets and the Middle East. Therefore,
demand for food products is determined by regional as well as national
growth. Major import competition for consumer-oriented products comes
from other ASEAN countries, the European Union, Australia, New Zealand,
and China. There are no duties on food products.
1 - Fruits & Nuts Fresh Dried (PS&D Code: 057)
Singapore is a thriving market for temperate climatic fruit. Due to
differences in harvesting seasons, the United States and Australia take
turns to dominate the Singapore market for temperate climatic fruit.
The U.S. is a major supplier of apples, oranges, grapes, plums and
grapefruit. With growing affluence more and more Singaporeans are
consuming airflown perishable fruit like cherries, strawberries and
nectarines. Over the last five years there has been an increasing
demand for pistachios and macadamia nuts. Most of the imported nuts are
repacked locally.
1994 1995 1996
A. Total Market Size 215 251 292
B. Total Local Production 0 0 0
C. Total Exports 142 149 156
D. Total Imports 357 400 448
E. Total Imports from U.S. 82 95 109
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
2 - Cereals & Flour Preps (PS&D Code: 048)
Products for which the U.S. has good market prospects include breakfast
cereals, biscuits, and snacks like corn chips, potato chips and extruded
cheese products. U.S. snack foods are perceived as being of high
quality and therefore are able to command a premium. The only
competition to U.S. breakfast cereals comes from Australia.
1994 1995 1996
A. Total Market Size 207 225 244
B. Total Local Prod. 192 202 212
C. Total Exports 129 135 142
D. Total Imports 144 158 174
E. Total Imp. from U.S. 21 23 25
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
3 - Fruit Preserved & Preps (PS&D Code: 058)
Within this category, the U.S. is a significant supplier of peanut
butter, jams and jellies, prepared and preserved nuts, canned peaches
and fruit cocktail. U.S. brands in the canned fruit cocktail and
peaches sector are recognized market leaders and are able to command
premium prices.
1994 1995 1996
A. Total Market Size 36 41 47
B. Total Local Prod. 0 0 0
C. Total Exports 69 74 80
D. Total Imports 105 115 127
E. Total Imp.from U.S. 22 25 29
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
4 - Fruit & Vegetable Juices (PS&D Code: 059)
As Singapore does not produce any fruit commercially, beverage
manufacturers import juice concentrates for local bottling and packing.
However, local manufacturers do not retail 100% juices. Practically all
local manufacturers market beverages that contain about 40% - 60% juice.
Competition for U.S. juices comes from EU countries and Australia. The
U.S. has a good market share in orange and grapefruit juice
concentrates.
1994 1995 1996
A. Total Market Size 19 21 24
B. Total Local Prod. 0 0 0
C. Total Exports 12 13 14
D. Total Imports 31 34 38
E. Total Imp.from U.S. 7 8 9
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
5 - Sugar Confectionery (PS&D Code: 062)
Products in this category include fruit, nuts, and fruit peel products
sweetened with sugar as well as medicated sweets and other sugar
confectionery. U.S. products have good prospects in the sugar
confectionery segment because of their high quality. Competition for
U.S. products comes from similar products imported from the Netherlands,
United Kingdom, Germany, Japan and Australia.
1994 1995 1996
A. Total Market Size 20 22 25
B. Total Local Prod. 0 0 0
C. Total Exports 26 28 30
D. Total Imports 46 50 55
E. Total Imp. from U.S. 4 5 6
F. Exchange Rate 1.5 1.4 1.4
The above statistics are unofficial estimates.
-------------------------------------
Significant Investment Opportunities
-------------------------------------
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 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.
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.
Chapter VI. Trade Regulations and Standards
Trade Barriers
Singapore maintains 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 also
prohibited. Generally, the import of goods which pose a threat to
health, security, safety and social decency is 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 garment to Canada, EU countries and the
US. Items such as rubber, timber, sand, 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 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 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 nonedible 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
Imports and exports from or to Iraq and Yugoslavia (Serbia and
Montenegro) are prohibited. In addition, Singapore prohibits the import
of chewing gum, firecrackers, horns, sirens, silencers, toy coins and
currencies. 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 Singapore Institute of Standards and
Industrial Research (SISIR) has developed standards for certain
electrical, sanitary and building products. SISIR is the national
standards and certification authority.
SISIR also administers the Good Manufacturing Practice Scheme and the
SISIR 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 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 SISIR 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 SISIR.
A list of accredited laboratories and national certification bodies is
available from SISIR. U.S. suppliers of these products planning to
expand sales into Singapore should check with the Consumer Protection
Agency and SISIR 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 entrepot 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 420,000 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 from the
date of importation. If the goods are not re-exported after the expiry
of the given period, duty will become payable. This facility 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 fulfil 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) Scheme for the ASEAN Free Trade
Area (AFTA). The Scheme 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.
Chapter VII. Investment Climate
Investment Policy
Singapore has one of the world's most open investment regimes, through
which it seeks to overcome land, resource and labor limitations, and
launch itself into the league of developed countries by attracting firms
that can build up the country's technological base and improve its labor
force. Singapore encourages foreign investment, particularly in
leading-edge technologies. Foreign investment accounted for about 74
percent of total investment in 1994, amounting to an estimated US$2.9
billion. U.S. investment in Singapore accounted for 55 percent of total
foreign investment commitments in 1994, concentrated in the petroleum,
chemical and electronics industries.
The Economic Development Board (EDB) is the primary agency entrusted
with the role of promoting foreign investment and operates as the
"business architect" of Singapore. It identifies sectors with high
potential to contribute to the economy, and draws up a variety of tax
and fiscal incentives to encourage foreign investment in these sectors.
It also assists foreign and locally-owned firms to invest in new
technology, automation, training and product development activities
through a variety of incentives.
Openness to Foreign Investment
Singapore's economy is based on free enterprise with strong government
participation and guidance. Investment policies are transparent and the
bureaucracy is not oppressive. There are no taxes on capital gains and
no restrictions on foreign ownership of businesses. Foreign investors
are not required to take on private or official joint ventures or cede
management control to local interests. Government policies encourage
local firms to form strategic partnerships with multinational
corporations (MNC's), especially in high technology activities. MNC's
value Singapore's manufacturing and support facilities, and consider
Singapore as the gateway to the fast expanding South and East Asian
markets.
Singapore maintains restrictions on investment in a limited number of
sectors. Armament manufacturing is strictly closed to foreign
investment. Other sectors where foreign investments are limited include
news media, telecommunications, broadcasting, property ownership and
domestic banks. The telecommunications sector has been steadily
liberalized since 1989. Singapore Telecom's 15-year monopoly to provide
basic telecommunication services that include domestic and international
telephone services, telex and telegram services, leased circuits and
videotext services will end in 2007.
Except in the few areas discussed above, the Singapore Government does
not restrict or discourage investment to protect local industries or for
any other reason. The EDB does screen foreign firms for their
eligibility for various incentive schemes, to determine the relevance of
the investment and to provide assistance. Though screened-out
investments are not prohibited, they are not given incentives. The EDB
provides a one-stop service for foreign investors, helping them avoid
red tape, and has a reputation for being responsive to changing business
conditions.
Taxes and Duties
The Singapore Government uses tax policy to enhance its international
competitive position. The Government does not impose taxes on capital
gains, turnover, or development. Foreign firms are taxed on the same
basis as local companies; the corporate tax rate was lowered from 31 to
27 percent in 1993. The Government has indicated it will lower the tax
rate further to 25 percent over the next few years, though it deferred
any reductions in 1995. There is no withholding tax on the remittance
of profits. Singapore does not have a bilateral tax treaty with the
United States, although discussions concerning such a treaty have been
held periodically since the mid-1970's. Singapore has agreements with
30 countries to provide relief from double taxation.
The Government introduced a consumption-based tax, the Goods and
Services Tax (GST), on April 1, 1994, as part of its long-term move to
reduce taxes on earnings. The GST of 3 percent (fixed for 5 years) is
levied on all domestic consumption of goods and services, with certain
exceptions, and on imports of goods into Singapore. GST, however, is
not levied on exports of goods and services, or goods imported and
stored in the free trade zones. GST-registered businesses that export
51 percent or more of their output qualify for the Major Exporters
Scheme, which allows them to defer the GST payable at the point of
importation.
Tariffs are minimal; 96 percent of goods enter Singapore duty-free.
Singapore still maintains significant tariffs on cigarettes, alcoholic
beverages, automobiles and gasoline to discourage their use. On
property, a concessionary tax rate of 12 percent for a period of 20
years is applicable to premises erected in areas designated for urban
redevelopment. Also, on completion, the owner can apply for a refund of
property tax paid for the period of six months from the date of the
project's approval plus an additional one month for every floor built.
Conversion and Transfer Policies
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. However, the Government limits
the use of the Singapore dollar overseas in order to prevent
internationalization of the Singapore dollar and control imported
inflation. The Singapore dollar has appreciated steadily against the
U.S. dollar over the past decade; some analysts expect the Singapore
dollar to reach a new high of S$1.36 to US$1.00 by the end of 1995.
Performance Requirements/Incentives
Singapore does not impose performance requirements on foreign investors
as a condition for establishment. However, if investment incentives are
requested, a company's track record, amount of investment, and its
contribution to improving Singapore's high technology manufacturing and
knowledge-intensive services are important in the selection process.
The Government does not require investors to purchase from local sources
or specify a percentage of output for export, nor does it limit 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 of which one 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. To achieve this,
industries are encouraged to automate and move into high technology
production. An average levy of S$350 (US$221) per worker per month is
payable to the Government for employing foreign labor.
There are no rules on the level and period for investors to
effect transfer of technology. The symbiotic relationship between
foreign investors and the Government has made it possible for foreign
investors to deepen and diversify their operations into activities such
as product engineering, design and research, regional marketing,
technical services, and fund management, while Singapore gains a pool of
specialized technologists.
Rights of Ownership and Establishment
Foreign and local entities may freely establish and operate their own
enterprises in Singapore. Except for representative offices, in which
foreign firms maintain a local representative but do not conduct
commercial transactions with Singapore, there are no restrictions on
carrying out remunerative activities.
Restrictions exist on foreign entities' participation in the Mass Rapid
Transit Corporation, the Public Utilities Board, Singapore Broadcasting
Corporation, Singapore Airlines and most of Singapore's public
companies. 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 at least 20 owners and operating
as a company limited by share, guarantee or as an unlimited company;
regulated by the provisions of the Companies Act (Cap. 50);
-- Foreign Company: registered as a branch of the parent company under
the Companies Act but not incorporated as a Singapore company; or,
-- Representative Office: offices of foreign corporations, which
undertake promotional and liaison activities on their parents' 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. Approval is given by the Trade Development Board.
Regulatory System
Singapore's regulatory environment is characterized by clarity, fair
competition and sound business practice. 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, and such changes are not necessarily made public. This
enables the Government to negotiate the way it provides incentives or
other services to foreign companies on a case-by-case basis.
Labor Conditions
Singapore's labor market is characterized by a small, comparatively well
disciplined indigenous labor force of 1.64 million, a considerable pool
of 360,000 foreign, mostly unskilled, workers from the region, and a
shortage of local skilled professionals. This shortage influences the
type of industries and businesses the Government promotes. High
technology investments are encouraged, and companies are given
incentives to automate. Companies are also encouraged to re-site some
labor-intensive operations in neighboring countries while retaining
headquarters activities in Singapore.
To reduce industries' dependence on 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$1,500 (US$980) or lower per month are given two-year
work permits, usually renewable for another two years. Those certified
as skilled receive three-year work permits, which are also renewable.
Local labor laws allow for relatively free hiring and firing practices.
Retrenchment benefits must be paid to workers with 3 or more years of
service. The cash benefit paid out is negotiated between employers and
the retrenched workers. The Employment Act regulates the working
conditions of workers with monthly wages equal or less than S$1,500
(US$1075). Those earning above this amount are outside the protection
of this Act. Their working hours, paid annual leave and overtime
salaries are usually determined by general prevailing practices.
Retirement age was recently raised from 55 to 60 years.
Wages in Singapore are higher than in most developing and newly
industrializing countries in East Asia. According to the National
Trades Union Congress, Singapore's starting monthly salary of about
S$1,000 (US$717) is nearly 2.5 times that of its closest regional
competitor: Penang, Malaysia. 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, except for foreign workers. Firms also pay a levy of
one percent of the wages paid to employees drawing less than S$750 per
month (US$538) to the Skills Development Fund (SDF). The National Wages
Council (NWC), comprising representatives from the unions, employer
groups and the Government, and headed by an academic, 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 1978, and it resulted in the loss of only 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 prohibited under the Trade Disputes Act. About 15 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.
Efficient Capital Markets and Portfolio Investment
The development of Singapore as an international financial center is a
major objective of the Government. 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, though its capital markets are not yet as developed as
OECD countries. The Singapore Government has adopted a policy to
strictly separate the domestic capital market from the offshore market
in order to maintain control on developments in the domestic market,
administer tax concessions, and prevent the internationalization of the
Singapore dollar.
Credit is allocated on market terms. Foreign investors are able to get
Singapore dollar credit in the local market, but banks are required to
notify MAS if the credit exceeds S$5 million for non-residents, or by
residents for use outside Singapore. This restriction is in line with
the policy to separate the domestic market from the offshore market and
the decision not to internationalize the Singapore dollar. A variety of
credit instruments are accessible to the private sector.
There are systems in place to encourage portfolio investment, but
Singapore's small economy limits the scope for development.
Concessionary taxes have attracted international securities firms, fund
managers and treasury operations of MNC's to Singapore. The Stock
Exchange of Singapore (SES) has allowed foreign broking firms to enter
the market but with some restrictions. The SES has also drawn up
guidelines to encourage MNC's and their Singapore subsidiaries
conducting treasury operations to list shares on the Exchange in any
internationally acceptable currency. 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. Laws and
regulations governing the banking industry are publicly available, and
the Monetary Authority of Singapore provides a guidebook on regulations
to banks to assist them with regulatory questions.
Capital Outflow Policy
The Government imposes no restrictions on international capital flows
into or out of Singapore. Recognizing the inherent internal limits to
growth, the Government has embarked on a massive regionalization drive
to create an "external wing" for the Singapore economy. The Economic
Development Board set up the International Business Development Division
in 1992 to promote and facilitate foreign investment by local companies
with the long-term objective of developing a new source of growth for
Singapore. Strong emphasis is given through the Regionalization Program
to Asian economies. Prime Minister Goh Chok Tong has stated that the
Government is ready to invest up to 30 percent of its roughly US$50
billion foreign reserves in projects in regional emerging economies.
The Government continues to promote investment in industrialized
countries primarily to spin off high technology to boost Singapore's
technological capability.
Expropriation and Compensation/Dispute Settlement
Singapore has investment promotion and protection agreements with 21
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. In the event of expropriation, Singapore will compensate
the foreign investor either directly or through its government.
Generally, the compensation will be based on the market value of the
property destroyed or confiscated. 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). Investment
disputes come under civil court jurisdiction.
Acquisitions, Mergers and Takeovers
The Code on Takeovers and Mergers supplements the statutory provisions
in the Companies Act. The aim is to mandate good business principles
and sound practices regarding takeovers and mergers. Investments by way
of takeovers or mergers of companies listed on the Stock Exchange of
Singapore (SES) are not unusual, but they must comply with the
provisions laid down in the listing manual of the SES. Final approval
comes from the Securities Industry Council, which together with the MAS,
regulates the industry.
Investment Incentives
The EDB, along with the Trade Development Board (TDB), the Monetary
Authority of Singapore (MAS), and the National Science and Technology
Board (NSTB) offers a broad range of incentives to attract specific
types of investments to Singapore. Under the Economic Expansion
Incentives (Relief from Income Tax) Act, these agencies have great
leeway in administering the incentives. An overview of investment
incentives can be found at Appendix F.
Incentives for Local Companies
The Government of Singapore has also developed twelve incentives
specifically tailored to help small- and medium-sized local companies
adopt or implement new technology or skills, introduce and apply
automation, or perform design and new product development activities.
Companies that have at least 30 percent local equity and "active" local
owners are defined by EDB as local companies. The Trade Development
Board operates five incentives to help manufacturers and exporters
increase their exports. Export financing assistance is provided by the
MAS. ECICS Credit Insurance, a government-controlled company, provides
insurance to exporters to cover against non-payment.
Protection of Property Rights
Common law protects and facilitates the acquisition and disposition of
all property. There are some restrictions on foreigners owning real
estate in Singapore; individuals may hold freehold title to condominiums
but not unattached homes, for example. Foreign investors are only
allowed to own industrial real estate through joint ventures with local
companies.
Regarding intellectual property, Singapore enacted strict copyright
protection legislation in 1987, strengthened its trademark law in 1991,
and passed a new patent law in 1994. Enforcement of relevant laws is
generally adequate. Singapore has convened an interagency task force to
oversee the drafting of amendments to make its IPR laws conform with the
WTO TRIPs agreement. Its patent law will be amended by January 1, 1996,
while its other laws will be amended later. Singapore is a signatory to
the Paris Convention for the Protection of Industrial Property as well
as to the Patent Cooperation Treaty, but not to the Berne Convention for
the Protection of Literary and Artistic Works or the Geneva Phonogram
Convention. An overview of Singapore's intellectual property laws is in
Appendix H.
Political Violence
There has been no politically motivated violence in Singapore for the
past 24 years. Tough internal security laws give the Government wide-
ranging powers to keep in check any instability or civil disturbance.
Political parties espousing communist ideology are outlawed. Existing
opposition parties do not espouse ideology that varies substantially
from the ruling party, and they collectively control only 4 out of 81
seats in parliament. Singapore has cordial relations with its neighbors
and cooperates with them either on a bilateral basis or under the ASEAN
framework. Singapore conducts frequent military exercises with its
ASEAN neighbors, and annually with Britain, Australia, New Zealand and
Malaysia under the Five-Power Defense Arrangement. There are no U.S.
military bases in Singapore, but the U.S. Navy and Air Force do maintain
small logistics, support and training facilities. Risk evaluation
agencies almost always rate Singapore as free of political risk.
Bilateral Investment Agreements
Singapore has signed general investment guarantee agreements (IGA's)
with the following countries: Belgium, Brunei, Canada, China, France,
Germany, Indonesia, Luxembourg, Malaysia, Netherlands, Philippines,
Poland, Sri Lanka, Switzerland, Taiwan, Thailand, United Kingdom, the
United States and Vietnam. The U.S. and Singapore signed a Trade and
Investment Framework Agreement in October 1991.
OPIC and Other Investment Insurance Programs
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.
Foreign Investment Statistics
Foreign companies committed a record S$4.3 billion (US$2.8 billion) in
new investments in Singapore's manufacturing sector in 1994. This was
36 percent more than the level in 1993. U.S. companies, accounting for
57 percent of the investment commitments, were once again the republic's
leading group of investors. Current surveys estimate that the roughly
1000 American firms in Singapore had cumulative total assets worth over
US$8 billion. Singapore Government figures reveal great dependence on
foreign investments. Foreign firms, led by those from the U.S., Europe
and Japan, accounted for 73 percent of cumulative gross fixed assets in
the manufacturing sector. Partially to offset the extensive dependence
on foreign MNC's, the Government is actively nurturing the large,
Government-linked companies to become regional MNCs, and assisting local
small- and medium-sized enterprises to upgrade.
Statistics on foreign investment in Singapore by country of origin and
industry sector are contained in Appendix A-D.
Chapter VIII. Trade and Project Financing
Brief Description of Banking System
As a result of the Government's decision in the late 1960s 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 center. 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 Trading
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 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. As of May 26, 1994, there were 136
commercial banks in Singapore, comprising 35 full license banks (of
which 13 were locally incorporated), 14 commercial banks with restricted
licenses, and 87 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.
Seventy-seven 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.
U.S. BANKS IN SINGAPORE
American Express Bank Ltd.
16 Collyer Quay
Hitachi Tower
Singapore 0104
Tel: 538-4833
Fax: 534-3022
Bank of America NT & SA
78 Shenton Way
Singapore 0207
Tel: 223-6688
Fax: 320-3068
Bank of Hawaii
4 Shenton Way #19-01
Shing Kwan House
Singapore 0106
Tel: 221-0500
Fax: 224-1144
The Bank of New York
10 Collyer Quay #14-02/03
Ocean Building
Singapore 0104
Tel: 535-4522
Fax: 534-4208
Bankers Trust Company
5 Temasek Boulevard
#08-00 Suntec City Tower
Singapore 0103
Tel: 336-2838
Fax: 331-4868
The Chase Manhattan Bank N.A.
Raffles Place #01-01
Shell Tower
Singapore 0104
Tel: 530-4111
Fax: 224-7950
Chemical Bank
150 Beach Road #23-00
Gateway West
Singapore 0718
Tel: 291-1298
Fax: 290-1756
Citibank N.A.
5 Shenton Way #06-00
UIC Building
Singapore 0106
Tel: 224-2611
Fax: 224-9844
The First National Bank of Boston
150 Beach Road #07-00
Gateway West
Singapore 0718
Tel: 296-2366
Fax: 296-0998
Marine Midland Bank N.A.
21 Collyer Quay
#19-01 Hongkong Bank Building
Singapore 0104
Tel: 225-7282
Fax: 225-1519
Morgan Guaranty Trust Co. of New York
6 Shenton Way #32-08
DBS Building Tower 2
Singapore 0106
Tel: 220-8144
Fax: 326-9981
Nations Bank of Texas, N.A.
5 Shenton Way #11-01
UIC Building
Singapore 0106
Tel: 220-5755
Fax: 225-7513
Norwest Bank Minnesota N.A.
100 Cecil Street
#14-02 Globe Building
Singapore 0106
Tel: 226-0809
Fax: 226-0874
The Philadelphia National Bank
6 Battery Road #13=03
Standard Chartered Building
Singapore 0104
Tel: 224-6177
Fax: 224-6170
Republic National Bank of New York
143 Cecil Street #01-00
GB Building
Singapore 0106
Tel: 2245-0077
Fax: 225-5769
Chapter IX. Business Travel
Business Customs
Business discussions are straightforward and no-nonsense. English is
widely spoken and most business people 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 is to present a
business card with both hands. There is no need to have special
business cards printed in Chinese.
Travel Advisory and Visas
Singapore's laws are strict and are rigidly enforced. Short stay visas
are available at the airport on arrival. Travellers should check with
their travel agent or the Singapore Embassy in Washington for the latest
information.
Business Hours
Singapore is 12 hours ahead of Eastern Standard Time. Business hours
normally are 8:30 am - 5:30 pm, Monday-Friday and
8:30 am - 1 pm, Saturday. Shops are open from
10 am - 7 pm.
Climate
Located close to 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 wearing a jacket. Business
women wear conservative, light-weight attire. Evening dinner-dress is a
shirt and tie for men, dress for women.
Communications and Power
In addition to having one 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 very good rate) or at any hotel (at a less favorable
rate). Singapore features dozens of Government-authorized "money
changers," located in major shopping centers, 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
impressively good. The Singapore Government limits the total number of
cars on the road and imposes a S$3 surcharge on vehicles entering the
Central Business District during much of the day. In addition, an
exceptionally clean, efficient subway system links the major
business/shopping areas.
Visas and Travel documents
A valid U.S. passport is required for tourist and business travel to
Singapore. No visa is necessary for U.S. citizens visiting Singapore.
To facilitate regional travel, replace any passport with less than six
months validity.
Holiday Schedule
The American Embassy closes on American and local holidays. The dates on
which holidays are observed in 1996 are listed below:
January 1, Monday New Year's Day
January 15, Monday Martin Luther King, Jr. Birthday
February 19, Monday Chinese New Year
and February 20, Tuesday
February 19, Monday Washington's Birthday
February 20, Tuesday Hari Raya Puasa
February 21, Wednesday Public Holiday Declared by President
April 5, Friday Good Friday
April 29, Monday Hari Raya Haji
May 1, Wednesday Labor Day (Singaporean)
May 27, Monday Memorial Day
May 31, Friday Vesak Day
July 4, Thursday Independence Day
August 9, Friday Singapore National Day
September 2, Monday Labor Day (American)
October 14, Monday Columbus Day
November 11, Monday Veterans' Day and Deepavali
November 28, Thursday Thanksgiving
December 25, Wednesday Christmas
Chapter X. Appendices
APPENDIX A: COUNTRY DATA
(U.S. Dollars Unless Otherwise Indicated)
Estimate
1993 1994 1995
1. PROFILE
Population, including non-
residents (million) 3.26 3.34 3.43
Population growth (percent) 2.5 2.4 2.6
Major religions Christianity, Taoism, Buddhism, Islam, Hinduism
Government System Unicameral parliament, universal suffrage with
elections held every 4 years
Official languages (in order of usage) English, Mandarin, Malay
and Tamil
Work Week 5 and 1/2 days (44 hours)
APPENDIX B: DOMESTIC ECONOMY (1)
1st Qtr.
1993 1994 1995
GDP (US$ b, at 1985 prices) 44.3 51.6 14.0
GDP Growth Rate (percent) 9.9 10.1 7.2
GDP Per Capita 16,200 16,700 n/a
Government Spending (pct of GDP) 14 13 n/a
Inflation (pct change in CPI) 2.4 3.6 2.5
Unemployment Rate (percent) 2.7 2.6 1.7
Foreign Exchange Reserves (US$ m) 48,190 55,758 61,412
Foreign Debt (US$ m) 7.2 3.1 n/a
Debt:Service Ratio 0.1 0.1 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.
APPENDIX C: TRADE (1)
1993 1994
US$ US$
Total Exports 73,396.5 95,914.0
Total Imports 84,878.7 102,095.1
Imports from US 13,838.3 15,648.8
as pct. of total imports 10.1 10.0
Exports to US 15,034.0 18,094.1
as pct. of total exports 12.7 12.4
Trade Balance with US 1,195.7 2,445.3
Trade Balance with Malaysia -3,545.0 2,284.3
Trade Balance with Japan -13,114.2 -15,764.7
Trade Balance with Hong Kong 3,728.8 4,929.3
Top 5 U.S. Exports to Singapore:
ELECTRICAL MACHINERY 2,417.5 3,243.9
OFFICE & DATA MACHINES 1,611.3 2,011.1
TRANSPORT EQUIPMENT 1,303.0 1,404.3
POWER GENERATING MACHINERY 1,089.6 885.8
GENERAL INDUSTRIAL MACHINERY 687.4 790.1
Top 5 U.S. Imports from Singapore:
OFFICE & DATA MACHINES 7,587.1 9,497.6
ELECTRICAL MACHINERY 2,015.5 2,904.1
TELECOMMUNICATIONS APPARATUS 1,703.7 2,012.1
CLOTHING 818.4 841.8
ORGANIC CHEMICALS 468.9 406.0
IMPORTS OF AGRICULTURAL PRODUCTS
Total: US$5,223 million
From the U.S.: US $399 million
U.S. Share: 8 percent
Agricultural Trade Balance with the U.S.: US$145 million in favor of
the U.S.
Notes:
(1) All data reflect merchandise trade only; services are excluded.
APPENDIX D: INVESTMENT STATISTICS
TABLE A
CUMULATIVE FOREIGN INVESTMENTS IN MANUFACTURING
BY COUNTRY OF ORIGIN, 1988-1992
(Measured by Gross Fixed Assets)
COUNTRY 1988 1989 1990 1991 1992
(US$ Billions)
U.S. 3,152 3,683 4,434 4,957 5,941
Japan 2,562 3,384 4,163 4,784 5,582
Europe 2,704 3,375 3,951 4,432 5,114
EC 2,522 3,165 3,686 4,134 4,791
UK 1,057 1,240 1,425 1,563 1,756
Netherlands 956 1,324 1,555 1,741 2,067
Germany 206 235 269 333 409
France 173 213 267 302 346
Other EC
Countries 131 152 170 194 215
Sweden 77 85 99 57 62
Switzerland 62 74 91 152 160
Other
European 43 51 74 89 101
TOTAL 9,010 11,036 13,315 14,952 17,535
Source: 1994 Economic Development Board Yearbook
TABLE B
FOREIGN INVESTMENT COMMITMENTS IN MANUFACTURING
BY COUNTRY OF ORIGIN, 1990-1994
COUNTRY 1990 1991 1992 1993 1994
(US$ Millions)
U.S. 582 561 738 899 1,605
Japan 391 413 527 482 598
Europe 240 396 380 546 594
EU 222 361 341 499 585
UK 50 108 188 221 344
Netherlands 40 125 26 5 115
Germany 91 35 65 127 60
France 33 44 21 77 35
Italy 0 41 16 27 25
Other EU
Countries 4 8 13 39 5
Other European 0 28 0 6 2
Other Countries 11 55 34 39 36
TOTAL 1,224 1,425 1,678 1,966 2,833
Source: Economic Survey of Singapore, First Quarter 1995
TABLE C
CUMULATIVE INVESTMENTS IN MANUFACTURING
BY MAJOR INDUSTRY GROUP, 1988-1992
(Measured by Gross Fixed Assets)
INDUSTRY GROUP 1988 1989 1990 1991 1992
(US$ Millions)
Food & Beverages 750 894 1,020 1,173 1,279
Textiles 94 102 120 137 142
Wearing Apparel 211 238 302 328 331
Leather & Rubber 54 57 73 92 102
Wood Products 210 224 217 222 247
Paper Products
& Printing 589 682 854 1,028 1,225
Industrial
Chemicals 1,171 1,461 1,688 1,935 2,097
Other Chemical
Products 279 325 447 462 533
Petroleum 2,483 2,793 3,267 3,678 4,425
Plastic Products 319 383 471 570 665
Non-metallic
Mineral Products 278 403 421 467 546
Basic Metals 189 223 271 291 339
Transport Eq. 957 1,092 1,285 1,480 1,716
Fabricated
Metal Products 875 1,018 1,232 1,475 1,730
Machinery
(except
electrical) 800 918 1,070 1,224 1,460
Electrical
Machinery
& Appliances 3,114 3,914 4,799 5,479 6,515
Precision
Equipment 179 212 337 381 450
Other Light
Industries 1,171 1,461 1,688 1,935 2,097
TOTAL INVESTMENT
(FOREIGN
AND LOCAL) 12,711 15,116 18,105 20,647 24,044
Source: 1994 Economic Development Board Yearbook
TABLE D
NET FOREIGN INVESTMENTS IN MANUFACTURING
BY MAJOR INDUSTRY GROUP, 1990-1994
INDUSTRY GROUP 1990 1991 1992 1993 1994
(US$ Millions)
Food & Beverages 24 23 47 57 24
Textiles 2 6 3 n/a n/a
Wearing Apparel n/a 3 6 1 n/a
Leather & Rubber 6 3 2 1 2
Wood Products 5 2 3 15 n/a
Paper Products
& Printing 42 63 55 57 176
Industrial
Chemicals 147 186 181 485 781
Other Chemical
Products 19 141 152 211 75
Petroleum 210 58 279 52 773
Plastic Products 5 50 68 30 18
Non-metallic
Mineral Products 5 28 39 78 135
Basic Metals n/a 2 21 43 4
Fabricated
Metal Products 57 74 94 92 212
Machinery
(except electrical) 103 218 211 205 181
Electrical Machinery 54 10 11 58 19
Electric Products
& Components 606 720 772 760 991
Transport Equipment 63 72 103 211 364
Precision Equipment 12 20 85 70 13
Other Products n/a 21 6 1 8
Servicing/Engineering 13 n/a n/a n/a n/a
TOTAL FOREIGN
INVESTMENT 1,224 1,425 1,678 1,966 2,833
TOTAL INVESTMENT
(FOREIGN & LOCAL) 1,372 1,698 2,137 2,428 3,774
Source: Economic Survey of Singapore, First Quarter 1995
TABLE E
SINGAPORE'S DIRECT INVESTMENT ABROAD
BY COUNTRY OF DESTINATION, 1989-1991
COUNTRY 1989 1990 1991
Pct. Pct. Pct.
of of of
US$ M GDP US$ M GDP US$ M GDP
ASEAN
Brunei 34.5 0.1 27.4 0.1 30.9 0.1
Indonesia 41.8 0.1 78.1 0.2 101.1 0.3
Malaysia 730.1 2.5 994.9 2.8 1,132.8 2.8
Philippines 27.3 0.1 39.4 0.1 35.3 0.1
Thailand 73.5 0.3 122.8 0.4 164.6 0.4
Total ASEAN 907.2 3.1 1,262.7 3.6 1,464.8 3.6
OTHER ASIA
Hong Kong 428.1 1.5 517.2 1.5 611.5 1.5
Japan 14.8 0.1 25.8 0.1 44.9 0.1
China 56.0 0.2 90.2 0.3 88.4 0.2
South Korea n/a n/a n/a
Taiwan 75.7 0.3 125.3 0.4 128.4 0.3
Others 63.4 0.2 96.6 0.3 146.9 0.4
Total ASIA 1,545.2 5.3 2,118.0 6.1 2,484.8 6.2
EUROPE
U.K. 58.3 0.2 107.1 0.3 113.7 0.3
Netherlands -46.2 -0.2 353.3 1.0 305.2 0.8
Germany n/a n/a n/a
Others 144.7 0.5 57.3 0.2 67.9 0.2
Total EUROPE 156.4 0.5 517.7 1.5 486.8 1.2
Australia 169.5 0.6 226.3 0.6 250.6 0.6
USA 150.4 0.5 209.7 0.6 239.3 0.6
Other Countries690.0 2.4 1,223.1 3.5 1,487.9 3.7
TOTAL 2,711.5 9.3 4,294.8 12.3 4,949.5 12.3
Source: 1994 Economic Development Board Yearbook