- Business Relationships
- Foreign direct investment
- FTAs and Treaties
- Development Cooperation
- Prospective fields of study (MOP)
Trade relations with the EU
Singapore is the EU’s 16th largest trading partner in goods and the EU’s 2nd largest ASEAN trading partner in 2021. The EU has a large positive trade balance in goods and services with Singapore, as the small island nation is generally dependent on imports food, basic materials, but also products and services. Singapore is also the main destination of European investments in Asia and the 3rd largest Asian investor in the EU (after Japan and Hong Kong). In 2021, the validity of the free trade agreement between the EU and Singapore (EUSFTA), negotiated since 2013, was fully manifested for the first time, but because it was a year still affected by covid measures, trade with the EU stagnated slightly. Currently, the full ratification of the EU-SG Investment Protection Agreement (EUSIPA), negotiated in 2018, is also awaited.
|Exports from the EU (million EUR)||27,721.60||31,245.20||28,894.40||24,118.20||27,259.90|
|Imports into the EU (million EUR)||17,672.10||19,421.90||17,993.60||16,915.80||15,596.40|
|Balance with the EU (million EUR)||-10,049.5||-11,823.3||-10,900.8||-7,202.4||-11,663.5|
Source: European Commission
Trade relations with the Czech Republic
Trade relations with Singapore are mainly governed by the involvement of companies in sub-parts of trade chains. A big role in both directions is played by electronics, both larger devices and chips, memories and sub-components. Vehicles and their parts are successfully exported from the Czech Republic. Thanks to this, the foreign trade balance for the Czech Republic has been positive for a long time.
|Exports from the Czech Republic (billion CZK)||10||7.5||8.1||10.1||10.6|
|Imports to the Czech Republic (billion CZK)||7.3||11.7||11.5||8.3||7.2|
|Balance with the Czech Republic (billion CZK)||-3||4.1||3.4||-1.7||3.4|
Trade relations with countries outside the EU
Singapore is dependent on imports, so it strives for the widest and most diverse import chains. At the same time, its position at the crossroads of world trade means that exporters from all over the world are interested in the country. Generally speaking, in terms of total value, trade with Asia is more significant than with Europe or the USA, but the situation may be different in terms of the sophistication of imported products and services. The most important trade partners are China and the USA, but neighboring Malaysia and Indonesia cannot be neglected.
|Exports from countries outside the EU (million EUR)||289 413.4||318,614.8||303,030.6||294 317.3||360,680.1|
|Imports to countries outside the EU (million EUR)||260,567.8||295,319.5||287 238.9||263 315.6||329 333.6|
|Balance with non-EU countries (million EUR)||28,845.7||23,295.3||15,791.8||31,001.7||31,346.5|
Source: EIU, Eurostat
Foreign direct investment
Foreign direct investment (FDI) in Singapore’s corporate sector at the end of 2020 (more recent data not available) was SGD trillion, an increase of 11.3% from the end of 2019. This increase was mainly due to higher foreign direct investment to equity, which included paid-in capital and accrued reserves. At the end of 2020, FDI capital investment increased by 12.7% from the previous year and accounted for the majority of Singapore’s FDI stock (net inter-company loans accounted for the remaining 3.6%). The most important investors are companies from North America (SGD 600 billion), followed by Europe with 10% less, and about another 15% less investment comes from Asia. Most industries saw an increase in foreign direct investment by the end of 2020. The finance and insurance sector retained the largest share of FDI in Singapore at SGD trillion, or 55.5%, followed by wholesale and retail trade and manufacturing. Together, these three sectors accounted for 82.4% of the FDI stock at the end of 2020.
Foreign direct investment and, in general, the presence of Czech companies in the territory is not very significant.
FTAs and treaties
Treaties with the EU
Singapore and the EU have an FTA between them (EUSFTA), which entered into force in November 2019, but its expected impetus to increase trade exchange was limited by the objective situation associated with the COVID-19 pandemic. The EUSFTA deals with trade liberalization, it is a “new generation” trade agreement with an ambitious and comprehensive scope. It includes areas such as tariff liberalization, reduction of non-tariff barriers to trade and promotion of services and investment. Other trade-related issues include, for example, stronger protection of certain geographical indications based on the register of geographical indications. The agreement will also ensure better access to public procurement opportunities.
The full ratification of the EU-SG Investment Protection Agreement (EUSIPA), negotiated in 2018, is also currently pending. This agreement includes investment protection and dispute settlement in the area of investment protection. Since 12 EU member states already have their own bilateral agreement on investment protection with Singapore, this agreement is not expected to have an immediate and drastic benefit, rather only to be replaced by more modern and, above all, uniform provisions on investment protection at the EU level.
Contracts with the Czech Republic
- Agreement on the promotion and protection of investments, signed on 04/08/1995, entered into force on 10/08/1995
- Agreement on avoidance of double taxation, signed on 21/11/1997, entered into force on 21/08/1998
- Agreement on visa-free travel, concluded in the form of an exchange of notes on 8 December 1997, entered into force on 8 January 1998
- Air Transport Agreement, signed on 1/19/2009
- Protocol governing the Agreement between the Government of the Czech Republic and the Government of the Republic of Singapore on the avoidance of double taxation and the prevention of tax evasion in the field of income taxes; signed on 26/06/2013
Singapore is not a recipient of foreign development aid, focusing itself more on providing immediate humanitarian aid and capacity building.
Prospective fields of study (MOP)
Healthcare and pharmaceutical industry
Singapore’s population is aging and by 2030, it is predicted that up to a quarter of Singaporeans will be elderly. Singapore therefore plans to build new hospitals and homes for the elderly. In addition, it invests significant funds in health care for its residents, which already reach about 4.5% of GDP and increase by about 10% every year. Opportunities are also found in innovative digital solutions for health care providers that would make care more efficient or better.
Singapore (“Silicon Valley of Asia”) is characterized by high digitization in practically all aspects of human activity, which provides opportunities for high-quality turnkey solutions that will prevail in the fierce competition in a market worth at least CZK 700 billion. While the government’s priorities are smart cities and cyber security, private companies are interested in R&D cooperation, for example in robotics, artificial intelligence and data processing. Banks and non-banking institutions are intensively developing the financial technologies of the future.
Agricultural and food industry
The food consumption of nearly 6 million Singaporeans is more than 90% dependent on imports from abroad. This is also why the country is the fifth largest export market for the EU in Asia in food and beverages (in 2020 it reached the amount of CZK 50 billion). Singapore also has disrupted supply chains due to the global pandemic, so there is a unique opportunity to enter Singapore and the entire South Asian region through a country with high purchasing power and a willingness to experiment in both food and alcohol products. The country also wants to solve this situation through innovative technological solutions, which is another opportunity for Czech foodtech and argotech companies.
Singapore is a small country that is aware of its vulnerability and strives to keep its defense spending to GDP ratio at 3%, the 3rd highest military investment in the world (after the US and Israel) on a per capita basis. In 2019, the government announced a modernization program, which by 2030 is supposed to modernize basically all components of the army. Czech companies will find opportunities both in military equipment and technology, as well as in modern training methods.
Water management and waste industry
Singapore is a highly developed small coastal city-state that feels very vulnerable to the consequences of climate change. That is why the government has committed itself to the transformation to a carbon-free economy as part of the so-called Green Plan and emphasizes innovative solutions enabling more efficient management of water and waste and the highest possible recycling rate, all of which is as environmentally friendly as possible.