Singapore is a micro-state, located in South-East Asia, on an archipelago of islands, the largest of which is Singapore. It is a dynamically developing country with a strong, free-market economy. Singapore plays a key role in driving’s ASEAN’s growth. It is one of the richest and fastest growing countries in East Asia, which is why many foreign companies operating in this part of the world chose it as their main regional centre.

Singapore Is 4th largest financial centre in the world and it is only ahead of London, New York and Tokyo. The economy of the country is mostly based on trade, services (mostly commercial and financial), transport and industry. In 2019, the services sector contributed 70% of GDP and industry sector contributed another 26%. The country has almost no natural resources which makes it heavily dependent on exports, especially when it comes to petroleum products, electronics, chemicals, medical devices and pharmaceuticals.

In 2020, for the first time in 26 years, Singapore took first place in the Index of Economic Freedom. In the Doing Business 2020 Index, conducted by the World Bank Organisation, it took second place, right after New Zealand. Singapore’s workforce is considered to be one of the most qualified in the world and its ICT, financial and chemical sectors remain well developed. The country is also a very important centre of both regional and international trade.

The micro-state is a shipping hub of east Asian region. The port of Singapore is one of the largest ports in the world and is known for its high-quality services, what attracts around 140 thousand ships annually. There are 67 container harbours in Singapore sea port and in 2019 it handled 36.9 mln TEU of cargo. The country gives the ability to transport goods to 600 ports in 123 countries.

Singapore plays an important role in the silk road of the sea and it is a key point on many regional sea routes, including the one between China and Central Asia, Australia and Europe. Northern Sea Route initiative may pose a thread to Singapore since it is seen as an good alternative to more traditional sea routes – the arctic shipping route is 13-15 days shorter.

According to the Leading Maritime Capitals of the World 2019 report, Singapore has been maintaining its position in the maritime industry for several years now and it is most likely that it will continue to stay on top until at least 2022. Is has also been noted that Shanghai will become the second most important maritime hub which could indicate an upcoming changes in the global maritime industry.

In the upcoming years, Singapore intends to transform its maritime industry, using ITM technology (Industry Transformation Maps). The aim of the program is to increase the ports productivity and to support innovation, which will strengthen the country’s position as a global shipping centre.

In 2019, the population of Singapore was 5,7 million, of which 3,5 millions are nationals. Around 525 thousand people are residents and remaining 1,67 million are people with residence permit. Singapore is very ethnically diverse country and it has four official languages: mandarin, English, malay and hindi. People of chinese origin make up 74,3% of Singaporean society. People of malay descent constitute 13,4% of the population and another 9% are people of Indian origin.

Singapore is a religiously diverse country. Approximately 43.2% of citizens are Buddhist/Taoist and 18,8% are Christians. Another two larger groups are the followers of Islam and Hinduism that make up respectively 14% and 5% of the population.
Entrepreneurs from the food and cosmetics industry should pay special attention to this information, since exporting some products to Singapore may require importers to obtain halal certificates.

In 2018, Singapore was 33rd largest economy in the world in terms of Gross Domestic Product – 17th largest exporter and 16th importer. The country exported 323 billion USD worth of products and imported 323 billion USD worth of products, which resulted in a negative trade balance of -679 million USD. In the same year, the value of GDP was 364 billion USD and the gross national income was 64, 582 USD per capita. That is one of the highest scores in the region.

Singapore’s top exports include: Integrated Circuits (61 billion USD), Refined Petroleum (52 billion USD), Gold (10 billion USD), Packaged Medicaments (8,3 billion USD) and Gas Turbines ( 7,9 billion USD). Singapore’s major trading partners for exports are China, Hong Kong, Indonesia and United states of America.

The country’s top imports include: Refined Petroleum (48 billion USD), Integrated Circuits (46,3 billion USD), Crude Petroleum (25,8 billion USD), Gold (10,1 billion USD) and Office Machine Parts (7,11 billion USD). Major trading partners for imports are China, Malesia, Chinese Taipei and Japan.

Around 99% of all imports enter the country duty-free and are only subject to the 7% Value Added Tax (VAT). However, the country imposes high excise taxes on certain goods, such as wine, spirits, tobacco products, petroleum and motor vehicles.

Non-tariff barriers include import restrictions and fees, sanitary and phytosanitary regulations. The entry of some goods, especially food items may require having a licence, permit or prior notification to the Singapore side. Products that must comply to import requirements are vegetables and fruits, live animals, meat and meat products, but also chemicals, fuels, weapons, diamonds, medicine and petroleum products. Full list of controlled goods is available on the Singapore’s Customs website.

There are certain products that are prohibited from exporting to Singapore: pistol-shaped cigarette lighters, rhinoceros horn (worked, unworked or prepared and the any part), chewing gum, fireworks and some telecommunication equipment, such as scanning receivers, military communication equipment, telephone voice changing equipment and radio-communication jamming devices.

Singapore’s market is transparent and easily understandable for foreign investors. Administrative activities towards foreign entrepreneurs are in most cases conducted efficiently. Well-developed state of infrastructure facilitates the distribution of foreign items throughout the country. The English language is known among country’s citizens which makes the process of registering a company significantly easier to foreigners.

Singapore is the European Union’s fourteenth largest trading partner and the most important partner among ASEAN countries. EU has a substantial positive balance of trade in goods and services sales with Singapore. The country is a major investment destination for EU and the third largest Asian investor in European Union, right after Japan and Hong Kong.

Singapore plays an important role for European companies, both as a target and an intermediate market, offering the possibility of expansion to other Asian countries. 10 thousand European companies remain registered in Singapore and around 120 thousand European citizens live there.