Singapore International Financial Centre

Gateway to opportunities in Asia and beyond

A well established and diversified financial sector

In just over three decades, Singapore has established a thriving financial centre of international repute, serving not only its domestic economy, but also the wider Asia Pacific region and in some instances, the world. Singapore is now well regarded by key financial institutions and industry players as a springboard to capture regional opportunities.

Despite this, Singapore has not stood still. In 1997, the Monetary Authority of Singapore (MAS) undertook a strategic review of its approach to financial sector development. The review highlighted the need for a more dynamic, competitive and innovative environment for financial institutions in Singapore. Over the next few years, we fundamentally changed our regulatory approach, from one-size-fits-all prescriptive regulation towards a more risk-focused supervisory approach. We actively promoted activities in which we had competitive advantages. Our efforts have borne fruit. We have seen substantial growth in various segments of Singapore's financial sector, offering financial institutions in Singapore a wide range of opportunities to expand and grow their businesses.

To name a few, Singapore has long been known as a global foreign exchange trading hub. In the last four triennial surveys of global foreign exchange activities conducted by the Bank for International Settlements (BIS), Singapore has been consistently ranked as the fourth most active foreign exchange trading centre in the world, after London, New York and Tokyo. Singapore is also a major wealth management centre in Asia, offering an array of services through the many financial institutions based here. As at end-2005, total funds managed out of Singapore amounted to over S$720 billion. Singapore's corporate bond market has grown significantly. Consisting of both Singapore dollar denominated bonds and other foreign currencies denominated bonds, it has increased four-fold since 1998, and total outstanding volume stood at over S$137 billion as at end-2005.

Why Singapore?

As an international financial centre, Singapore offers financial institutions a pro-business environment, excellent infrastructure, cost-competitiveness, a highly skilled and cosmopolitan labour force, and is strategically located in a region of opportunities.

Pro-business environment

Singapore has long been recognised as one of the best cities for business. In the Swiss-based international Institution for Management Development's 2004 World Competitiveness Yearbook, Singapore has been ranked as the second-most competitive country in the world after the United States. This is what a World Bank report had to say about doing business in Singapore "It takes an entrepreneur just over 6 working days to get a new business going in Singapore, with low start-up costs. Overall, taking into account other factors, including business licensing, taxes, credit legal rights and investor protection, Singapore has about the most business-friendly regulation in the world."

Investors have also come to appreciate the high levels of transparency and reliability in business, economic and regulatory affairs in Singapore. A stable political structure with parliamentary democracy, a well-established judicial system, and the presence of strong domestic institutions with good corporate governance practices, have made the Singapore business environment even more attractive to global investors.

Excellent Infrastructure

Singapore's unique location and sophisticated telecommunications network allow financial institutions here to transact business with any part of the world within the same working day. International travel out of Singapore is equally convenient, with more than 60 international airlines operating scheduled services through Singapore to 152 cities in 51 countries worldwide.

Singapore has always been recognised as Asia Pacific's most competitive telecommunications hub, being tops in telecommunications service and pricing. The Global Information Technology Report (2003-2004) has ranked Singapore as the second most networked-ready country after the United States.

We have a robust and efficient legal and judicial framework and a well-regulated international financial sector. Singapore is the only Asian country with a "AAA" rating. The Political and Economic Risk Consultancy (PERC) survey named Singapore as having the best judicial systems in Asia for the 6th year running.

Cost Competitiveness

We offer financial institutions a competitive tax rate environment. In the 2005 tax competitiveness report by CD Howe, Singapore was cited as having the lowest effective tax rates in the world. Singapore also offers the advantage of having a comprehensive network of Double Tax Agreements with more than 50 countries.

We are also one of the most cost competitive countries to do business. According to a Global Occupancy Cost Survey by DTZ Research in January 2005, Singapore has more cost competitive office space than most major cities, including Tokyo, Hong Kong, Seoul and Sydney.

Skilled Workforce & attraction of talents

We also have a skilled workforce to meet industry demand. In addition to grooming the local workforce meet the demand of the industry, Singapore also has an open door policy to international talent and expertise. Washington-based risk consultancy agency, Business Environment Risk Intelligence (BERI), has rated Singapore's workforce as the world's best workers since 1980. And according to the IMD World Competitiveness Yearbook 2004, Singapore ranked 2nd after the US, in terms of attractiveness to foreign high-skilled people.

Strategic Location in a Region of Opportunities

Singapore is strategically located in a region of opportunities. Located at the heart of Southeast Asia, Singapore is well placed to serve the fast-growing markets of the Asia-Pacific region. Financial institutions in Singapore also trade around-the-clock with Asia-Pacific centres, as well as European and American centres, making Singapore a significant hub for 24-hour trading in foreign exchange and securities. International travel is equally convenient. Singapore has grown to be a strategic link and important gateway for global investors.

Growth in Asia, driven largely by China and India are expected to surpass those in other parts of the world. Singapore seeks to ensure its relevance and connectivity to growth markets, not just in Asia but also beyond. As part of this initiative, Singapore has concluded Free Trade Agreements (FTAs) with major economies, including the United States, Japan, Australia, New Zealand, and most recently India. There are ongoing FTA talks with other countries. These FTAs provide privileged access to the markets of partner countries. Beyond the immediate region, Singapore is also building linkages with countries further a-field including the Middle East, capitalising on the growing trade and investment interests between these two regions.