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

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:

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

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.