Singapore is very attractive to foreign investors, mainly because of its:
- Clean politics, a sound legal system, and a stable currency.
- Business-friendly legal system and political environment.
- Low tax rates.
- A government renowned for its integrity and efficiency, making it a prosperous financial center.
- As an international financial center, it boasts world-class legal, accounting, engineering, and business consulting services.
Due to its friendly business environment, Singapore is considered one of the world’s freest economies and one of the easiest countries in which to conduct business activities. Many high-net-worth individuals include Singaporean investment projects in their asset allocation portfolios. The two most common investment methods in Singapore are real estate and funds.
Singapore’s real estate market is a low-risk investment because the government exercises strong control over the property market. Although property prices do not soar as they might in some developing countries, they rise very steadily due to Singapore being an island nation with a growing population, limited land, and continuous economic development. This makes it an excellent investment for hedging against risks: it can be used for self-occupancy, held for the long term, or rented out for a significant cash flow, and can be easily converted into other assets at the right time. In short, it is flexible with steady appreciation.
However, it is important to note that Singapore places restrictions on the types of property foreign investors can purchase locally. HDB flats, which are public housing built by the Singapore government for local residents, are not available for purchase by foreign investors. However, foreign investors can buy private condominiums, and the purchasing process is relatively simple. They can also obtain loans from local banks at very low interest rates (around 1% – 1.8%). By choosing the right condominium project and location, the rental income can typically cover the monthly mortgage payments, making it an investment option with relatively low financial pressure.
Being a financial center, funds are certainly another excellent investment option. Among them, ETFs are perhaps the simplest choice. Additionally, one can opt for closed-end mutual funds or American Depositary Receipts (ADRs), or purchase Singapore Savings Bonds. Almost any type of fund can be found in Singapore, with a wide variety of fund types available. You can also choose funds denominated in Singapore dollars or US dollars to hedge against inflationary pressures.
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