Regulation of inbound foreign investment

Government investment promotion programmes

Does the state have a foreign investment promotion programme?

The Global Investor Programme (GIP), commonly referred to as the ‘Investor Scheme’, is an initiative by the Singapore Economic Development Board (EDB) jointly administered with the Ministry of Manpower to attract foreign investment. The programme assists investors and entrepreneurs to set up and develop their business in Singapore. Foreign investors may apply for Singaporean permanent residence status through the GIP. Contact Singapore administers the GIP and is a one-stop shop for investors interested in investing and relocating to Singapore.

The Ministry of Manpower also has the Entrepreneur Pass (EntrePass) scheme for foreign entrepreneurs who wish to start a business and relocate to Singapore. One can apply for an EntrePass if one has started, or intends to start, a private limited company registered with the Accounting and Corporate Regulatory Authority (ACRA) (see the EntrePass website).

Enterprise Singapore, a government agency championing enterprise development (formed by merging International Enterprise Singapore and SPRING SG on 1 April 2018), also has various schemes and pro-trade policies for foreign investors. StartUp SG also offers incentives including funding support, mentorship and grants to encourage start-ups, including foreign companies to set up in Singapore (see the Enterprise Singapore website).

Applicable domestic laws

Identify the domestic laws that apply to foreign investors and foreign investment, including any requirements of admission or registration of investments.

Singapore has no separate law governing foreign investment. Foreign investment is governed by sector-specific laws and regulators. The Economic Development Board Act (Chapter 85) established the EDB, which plays an active role in promoting foreign investment.

Registration of companies is governed by ACRA, and consent or approval is required from sector-specific agencies, regulators or referral authorities, for certain sectors. For registering a foreign company in Singapore, the services of a registered filing agent (eg, a law firm, accounting firm or corporate secretarial firm) may be engaged to submit an online application. The branch of a foreign company must have at least one authorised representative who is ‘ordinarily resident in Singapore’ (ie, the authorised representative’s usual place of residence is in Singapore, a Singaporean citizen, Singaporean permanent resident or an EntrePass holder). The ACRA prescribes an application fee and a registration fee for registering a company. The foreign company may commence business once it is registered with ACRA if it does not require any licences or approvals from government agencies or regulators to carry out its business activities.

Foreign investment is restricted in certain sectors like news media, banking, telecommunications and land ownership. Section 19 of the Newspaper and Printing Presses Act (Chapter 206) (NPPA) prohibits the acceptance of any funds from a foreign source without the prior approval of the concerned Minister. The NPPA also places restrictions on shareholder composition of newspaper companies and restricts foreign control. The Banking Act (Chapter 19) provides for the licensing and regulation of the business of banks and related financial institutions. A company desirous of carrying on banking business in Singapore has to apply in writing to the Monetary Authority of Singapore (MAS) for a licence under section 7 of the Banking Act. The MAS oversees all financial institutions in Singapore and also regulates foreign investment in financial institutions.

 

Incentives

Singapore offers many investment incentives for both domestic and foreign investors. Companies may apply for tax incentives under the Income Tax Act (Chapter 134). The Economic Expansion Incentives (Relief from Income Tax) Act (Chapter 86) (the EEI Act) consolidates investment incentives. Certain investment allowances and tax deductions are granted for ‘approved projects’ under Part X of the EEI Act.

Relevant regulatory agency

Identify the state agency that regulates and promotes inbound foreign investment.

Foreign investment is regulated by sector-specific regulators. The EDB is a government agency under the Ministry of Trade and Industry that is responsible for promoting foreign investment. It develops strategies for enhancing Singapore’s position as a global centre for business, innovation and talent. The functions of the EDB include:

  • the stimulation, growth, expansion and development of the economy;
  • formulation of investment promotion policies and plans, and promotional incentives and strategies assisting the development of support industries and services that provide important parts, components and related services to the manufacturing and services sector;
  • encouraging foreign and local industries to upgrade their skill and technological levels through investment in technology, automation, training, research and product development activities; and
  • identification of key enterprises and encouraging them to establish their international headquarters in Singapore and to undertake a wide range of international service and business activities.

 

In August 2018, the EDB and Enterprise Singapore signed a memorandum of understanding with the Japan External Trade Organisation to bolster support for start-ups, create initiatives, opportunities, information exchanges and to strengthen linkages between businesses based in Japan and Singapore. In March 2019, Enterprise Singapore ‘initiated a comprehensive review of its strategies to keep pace with the evolving and increasingly complex business landscape locally and globally’ (see the Enterprise Singapore website).

According to its 2019 Review, EDB attracted investment commitments amounting to S$15.2 billion in fixed asset investments and S$9 billion in total business expenditure. The results exceeded its forecast for the year. When these projects are fully implemented, they will create 32,814 new jobs in the coming years with a projected contribution of S$29.4 billion in value-added per annum. (See the Singapore Economic Development Board website.)

Relevant dispute agency

Identify the state agency that must be served with process in a dispute with a foreign investor.

Civil proceedings against the government have to be instituted against the appropriate authorised government department, or, if none of the authorised government departments are appropriate or the person instituting the proceedings has any reasonable doubt regarding the appropriate department, against the Attorney-General (section 19 of the Government Proceedings Act).

All documents to be served on the government in any civil proceedings have to be served on the solicitor, if any, in charge of the authorised government department or acting for the concerned department, or if there is no such solicitor and no person so acting, or if the proceedings are brought against the Attorney-General, served on the Attorney-General (section 20 of the Government Proceedings Act).

Specific provisions for service on a party may also be found in the respective IIAs (eg, article 34 of the Investment chapter of the Singapore–Australia FTA and Annex 9-D of the Comprehensive and Progressive Agreement for Trans–Pacific Partnership).

Law stated date

Correct on

Give the date on which the above content is accurate.

18 October 2020.