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Doing Business in Singapore

Market Overview

In 2017, Singapore maintained its position as the United States’ 13th largest export market and advanced one rung to 18th largest trading partner. U.S. goods exports to Singapore were $29.8 billion, up 11.3 percent ($3.0 billion) in 2016, reflecting the sixth largest goods trade surplus of US$10.4 billion. Singapore is an important partner of the United States with a bilateral, gold standard, Free Trade Agreement (FTA) signed in 2003 and implemented January 1, 2004. It was the first U.S. FTA signed in Asia.

Singapore’s gross domestic product grew 3.6% in 2017 and the Singapore government expects growth to be 2.5% to 3.0% in 2018. The U.S. position as Singapore’s third largest source of imports was unchanged and China and Malaysia retained their first and second position respectively, followed by Taiwan, Japan, South Korea, Indonesia, Germany, Saudi Arabia and Switzerland.

The World Bank ranked Singapore the second easiest place to do business in the world. U.S. companies should consider exporting to Singapore for the following reasons:

Major ICT, distribution, and logistics hub; as such, many consider it the gateway to the ASEAN region

  • Lack of corruption
  • Favorable tax codes
  • Strong intellectual property protection
  • English speaking population

Market Challenges

Singapore is a free port as more than 99% of all imports enter Singapore duty-free. For social and/or environmental reasons, it levies high excise taxes on distilled spirits and wine, tobacco products, motor vehicles, and gasoline.

U.S. companies face technical import barriers for beef, pork and poultry products, and services barriers that include restrictions on the use of satellite dishes, direct-to-home satellite TV services, pay television, legal services, banking, and healthcare procedural transparency.

Details on these trade barriers can be found in the USTR 2018 National Trade Estimate Report on Foreign Trade Barriers report which is available online at: https://ustr.gov/sites/default/files/files/Press/Reports/2018%20National%20Trade%20Estimate%20Report.pdf

Completion with global suppliers is a key challenge for American companies operating in Singapore. As the nation continues to restructure its economy, U.S. companies doing business in the City State can expect increased operating costs and continued tightening availability of foreign labor. The next 50 years will present new challenges to Singapore in the form of a greying workforce, maturing economy, growing influence of social media, and increasing competition from other trade agreements and ASEAN partners. To counter the challenges, the Singapore Government’s Committee on the Future Economy released a report that identified strategies to meet these and other challenges. The text of the report is available here: https://www.gov.sg/~/media/cfe/downloads/cfe%20report.pdf?la=en

In addition, in June 2018, Singapore launched its Digital Government Blueprint as it strives to become a digital economy and society. The blueprint can be found at: https://www.tech.gov.sg/Digital-Government-Transformation/Digital-Government-Blueprint

Market Opportunities

U.S. exporters will find a promising market for the following industry sectors in Singapore:

  • aviation and defense
  • ICT and digital technologies (fintech, e-commerce, smart cities, smart grids)
  • energy and environment (oil and gas, water)
  • healthcare and medtech

The following are major infrastructure projects, significant government procurements and business opportunities in Singapore:

  • Construction of Singapore Changi Airport Terminal 5 and a third runway scheduled for completion around 2030;
  • Singapore’s Next Generation Port Vision for Tuas Terminal to be constructed in 4 Phases; with Phases 1 and 2 tenders awarded; there will be two more phases of tenders to complete the future port by 2040;
  • Deep Tunnel Sewerage System Phase 2 targeted for completion in 2025;
  • Singapore Government ICT tenders of more than US$1.9 billion and other Smart City projects;
  • Major redevelopment of Singapore’s oldest and largest hospital, renamed the Outram Campus and Community Hospital, is set to take place from 2025 to 2035 and a New National Cancer Center will be housed there;
  • Over the medium term, five new public hospitals and up to twelve more polyclinics will be built by 2030 and there are plans to build new and replacement nursing homes to bring the total to 25 by 2020;
  • A new US$135 million National Heart Center building is currently being built at the Singapore General Hospital and scheduled for completion in 2020;
  • Other infrastructure projects include the Woodlands Health Campus and the existing Tan Tock Seng Hospital. These are scheduled to progressively come on stream between 2020 and 2036;
  • Advanced water technology and infrastructure in areas such as filtering and purifying machinery and apparatus, technologies involving wastewater recycling and treatment, and desalination technologies;
  • US$8.0 million pilot project to determine feasibility of floating solar panels on reservoirs to generate electricity;
  • Singapore Power’s US$22.55 million Center of Excellence is seeking to develop next generation network technology for better reliability and efficiency for electricity/gas transmission and distribution.

Market Entry Strategy

The Singaporean government estimates more than 4,200 U.S. firms, large and small have established operations in the City State. Many U.S. exporters successfully use agents or distributors to serve the Singapore and other Southeast Asian markets. Singapore firms are aggressive when it comes to representing new products and usually respond enthusiastically to new opportunities.

Price, quality, and service are the three main factors for Singapore buyers. U.S. exporters should be aware that competition is strong and buyers expect good after-sales service. Selling techniques vary according to the industry and product and are comparable to the techniques used in most other sophisticated markets. It is also important for U.S. firms to visit their representatives in Singapore and maintain close contact with them. A well developed social media strategy is growing in importance as Singapore and ASEAN consumers are heavy users of on-line channels.

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