Singapore Attracts $160 Billion in Foreign Investment, Ranks Third Globally

Singapore attracted $160 billion (approximately S$215 billion) in direct foreign investment last year, marking a 13% increase from 2022. Amid a global decline in direct foreign investments, Singapore stands out as one of the few economies to achieve significant growth in this area.

According to the latest World Investment Report released by the United Nations Conference on Trade and Development (UNCTAD), Singapore led ASEAN member states in attracting foreign investment last year and maintained its global third-place position. While the top four rankings remained the same as in 2022—namely the United States, Mainland China, Singapore, and Hong Kong—only Singapore and Hong Kong saw growth in direct foreign investments, while other economies experienced declines.

Global Foreign Investment Inflows Rankings

According to UNCTAD data, the global foreign investment inflows rankings are as follows:

1. United States: $311 billion

2. Mainland China: $163 billion

3. Singapore: $160 billion

4. Hong Kong: $141 billion

5. Brazil: $83 billion

6. Canada: $80 billion

7. France: $78 billion

8. India: $53 billion

9. Germany: $27 billion

10. Spain: $27 billion
    

Singapore's $160 billion in foreign investment last year was just $3 billion less than Mainland China, which ranked second, and significantly higher than Hong Kong, which ranked fourth with $113 billion, a mere $3 billion increase from 2022, representing a 2.7% growth.

UOB's head of research, Mr. Gan Teck Khim, commented in an interview with Lianhe Zaobao: “Setting up regional headquarters or financial centers in Singapore allows companies to leverage the country’s financial and economic capabilities to seize business opportunities in the region. Although Singapore may not be the final destination for these funds, these advantages encourage more foreign investment inflows.”

The World Investment Report noted that global and regional crises, trade tensions, tightened financing conditions, and a significant slowdown in mergers and acquisitions—key drivers of direct foreign investment flows—led to a 2% decline in global direct foreign investment to $1.3 trillion in 2023.

ASEAN Breaks Records for Third Consecutive Year, Attracting $226.3 Billion in Investment

Mr. Gan pointed out that despite the global decline in foreign direct investment, ASEAN countries achieved record-breaking inflows for the third consecutive year, attracting $226.3 billion last year, a 1.2% increase, driven by strong economic growth and global value chain connectivity.

OCBC Chief Economist Selena Ling noted that Singapore faces competition from other ASEAN countries, including Malaysia's electronics industry, Thailand's robust automotive sector, and Indonesia’s natural resources for electric vehicle battery manufacturing.

“Although these countries are Singapore's competitors, there are also synergies. For example, ASEAN is a primary beneficiary of the 'China Plus One' strategy, with more Chinese companies seeking new markets in the region. Despite short-term challenges in the Chinese economy, it remains a large market with significant technological advantages,” Ms. Ling said.

Last year, foreign direct investment in Indonesia, Malaysia, and Thailand declined by 15% to 59%, while Vietnam saw a slight increase of 3.4%. Announced greenfield projects were a key driver of the increase in Asia’s investment amounts and numbers. Indonesia was the largest destination for these projects, with a 73% year-on-year increase in value.

Mr. Gan noted that the United States remained the largest source of foreign investment in the region last year, accounting for 32% of ASEAN's total inflows, more than double the 13% share in 2022. This underscores the importance of supply chain diversification and de-risking amid US-China tensions.

The sectors attracting the most direct foreign investment in ASEAN were financial services and manufacturing, accounting for 42% and 23% respectively. Notably, the share of investment in professional and technical services surged from 0.1% in 2022 to 9.5% last year.