Page 5 - Doing Business in Singapore

OVERVIEW OF SINGAPORE

SINGAPORE AS AN ECONOMIC HUB AND INTERNATIONAL FINANCIAL
CENTRE

Singapore is an island nation in Southeast Asia. Despite its small size with scarce natural resources, Singapore has
taken advantage of its strategic geographical location and excellent connectivity to become one of the leading
economic and financial centres in the world.

As an economic hub, Singapore’s major trading partners include China, Malaysia, the European Union, the United
States, Indonesia, and Hong Kong. Other major trading partners include Taiwan, South Korea, Japan and Thailand.

Singapore’s total foreign workforce numbered about 1.4 million as at December 2022 , and its multicultural
1
population mainly comprises Chinese, Malays, Indians, and Eurasians. English, Mandarin, Malay and Tamil are the
four official languages in Singapore, with English widely used in business and education.

A key trend that is expected to offer vast opportunities for businesses in Singapore is the rapid urbanisation in
Asia. The United Nations projects another 2.5 billion people could be added to urban populations by 2050, with
2
Asia and Africa accounting for close to 90% of the increase. Between 2014 and 2050, China alone is expected to
add 292 million urban dwellers.

The rise in disposable incomes and consumerism in emerging Asian markets will also offer Singapore-based
businesses with more opportunities to target a wider range of customer segments.

As an international financial centre, Singapore has over 1,900 financial institutions – including 4 local, 127 foreign
and 21 merchant banks in 2022 – that offer many products and services across various asset classes. With
3
assets under management at S$5.4 trillion in 2021 , the banking sector is especially important to Singapore’s
4
role in financing local and regional growth, for example in facilitating infrastructure development.

In addition, Singapore is Asia’s largest and the world’s third-biggest (after the United Kingdom and the United
States) foreign exchange trading centre, according to the 2022 Triennial Central Bank Survey by Bank for
International Settlements . This gives further evidence of Singapore’s increasing standing and influence as a
5
global financial centre.

Likewise, the city state also garnered the highest short- and long-term triple-A credit ratings from all three
major credit rating agencies: Standard & Poor’s, Moody’s Investors Service, and Fitch Ratings. However, this
continued development as a regional and international financial centre also comes with close surveillance by
Singapore’s central bank – the Monetary Authority of Singapore – and appropriate policy formulation.

1 https://www.mom.gov.sg/documents-and-publications/foreign-workforce-numbers
2 World Urbanization Prospects, 2019 Revision, United Nations
3 https://www.statista.com/statistics/624025/number-of-financial-institutions-in-singapore-by-type/#professional
4 https://www.mas.gov.sg/-/media/mas/news-and-publications/surveys/asset-management/singapore-asset-management-
survey-2021-1.pdf
5 Singapore Cements Position as Third Largest Global FX Centre (mas.gov.sg)

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