Business Environment

Building a conducive environment for business growth and innovation

Last updated 1 November 2024

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Upholding an open and rules-based regional trade architecture

Sustaining a pro-business environment

Singapore was the world’s leading business environment for the 15^th consecutive year in the Economist Intelligence Unit’s business environment rankings for 2023. We also ranked as the most competitive economy in the International Institute for Management Development’s World Competitiveness Yearbook 2024.

Our value proposition lies in our access to a deep pool of local and global talent, robust infrastructure, strong rule of law, efficient government services, and connectivity to a growing Southeast Asia region. These strengths have allowed us to continue attracting businesses across various industries.

Supporting our enterprises

We continuously strive to make Singapore a conducive place for businesses to thrive. From managing business costs to improving regulatory processes and Government-to-Business interactions, we supported companies through a variety of initiatives.

Managing business costs and encouraging transformation

Based on the Singapore Business Federation’s National Business Survey 2023/2024 [PDF, 1.42 MB], rising business costs remained a key challenge for businesses. The most significant costs were wages, pass-through from suppliers, and electricity costs.

We have helped businesses manage immediate costs and transform.

To help businesses adjust to the mandatory wage increases for lower-wage workers, we provided transitionary support by co-funding the wage increases through the Progressive Wage Credit Scheme, first introduced in 2022.
To support training, productivity initiatives, and investment promotion activities, we topped up the National Productivity Fund (NPF) with $4 billion in 2023. As at September 2023, nearly $2.7 billion has been committed across 53 NPF programmes and schemes. The completed programmes and schemes have benefitted over 22,000 companies (of which 87% were small and medium enterprises (SMEs)) and about 120,000 individuals.
To provide near-term relief to businesses while supporting their capability building, we introduced the $1.3 billion Enterprise Support Package [PDF, 132 KB] at Budget 2024.

Feature Story: Facilitating access to project financing through the Enterprise Financing Scheme (EFS)

EFS facilitates enterprises’ access to financing in various areas.

Apeiron Bioenergy, a company that produces clean fuel from waste products, is a beneficiary under the EFS. With support from the EFS, Apeiron Bioenergy was able to access bank loans to finance and grow its trades, providing the working capital needed to support feedstock collection activities. Apeiron was able to deliver its first contract of clean biofuel feedstock to the United States and expand feedstock collection operations in Asia and the United Arab Emirates in 2023.

Workers from Apeiron Bioenergy unloading used cooking oil for clean fuel production.

We sought to reduce costs for businesses by streamlining transaction processes, while maintaining an effective and fair regulatory regime that facilitates the growth of good businesses.

Feature Story: Supporting companies via Tender Lite

Under Tender Lite, tenders with estimated value of up to $1 million have fewer and simpler contract conditions, which is about a 20% reduction in contract conditions compared to a typical tender. The reduction includes the removal of clauses requiring security deposits and liquidated damages by default, which helps to reduce the cost and risks borne by businesses.

With both Tender Lite and Quotation, around 90% of government contracts will be subjected to fewer and simpler conditions. This makes it easier for businesses, especially SMEs, to participate in lower-value contracts to build their capabilities and track records before competing for higher-value contracts.

Developing a supportive ecosystem for innovation

A thriving research, innovation and enterprise (RIE) ecosystem is key to unlocking new growth opportunities and helping businesses stay competitive via new Intellectual Property (IP) assets, protection and technological solutions. The $28 billion RIE2025 plan has continued to strengthen Singapore’s RIE capabilities.

Business expenditure on research & development(R&D), a proxy for measuring corporate innovation, increased from $5.3 billion in 2017 to $7.1 billion in 2021. The private sector spent $1.73 for every dollar spent by the Government on R&D. However, there is still room to encourage more private sector R&D investments and improve the innovative capacity across different enterprise segments.

Bar Chart showing the business expenditure on R&D

Our RIE efforts have enabled Singapore-based businesses to develop, testbed, and commercialise innovative solutions to drive business growth. One way is through our Centres of Innovation (COIs), which have helped build our companies' innovation capabilities by providing technical expertise and facilities to SMEs. Between 2021 and 2023, we supported more than 300 SMEs in embarking on over 350 innovation projects.

Feature Story: Citicall Communications – Partnering the Centre of Innovation for Electronics & Internet of Things [COI-EIoT]

Communications services provider Citicall Communications was looking to adapt its communication systems products for cable cars to enhance entertainment and safety in the cabins.

Partnering with the COI EIoT enabled Citicall Communications to incorporate IoT and edge computing in its smart server. When integrated into cable cars, this allows passengers to make calls from inside the cabin, ensuring efficient communication and real-time monitoring while in the sky. Citicall Communications plans to bring the product to other markets.

We also created new R&D translation platforms and provided additional resourcing to catalyse key sectors. Recent initiatives included:

The National Semiconductor Translation and Innovation Centre [PDF, 132 KB] , which commenced in April 2024, fosters collaboration and boosts R&D translation outcomes in the areas of flat optics and silicon photonics, to enhance the performance, efficiency and functionality of semiconductor devices.
The Nucleic Acid Therapeutics Initiative [PDF, 168 KB] (NATi), which commenced in June 2023, positions Singapore as the regional node for research, clinical translation, and commercialisation of RNA drugs and vaccines.
The Medtech Catapult [PDF, 129 KB], which commenced in April 2024, is an initiative to accelerate the development of novel Life Science Tools and Medical Devices, by working with companies and product owners to translate research into commercial products.
A new tranche of funding for the National Robotics Programme [PDF, 195 KB] (NRP), which started in 2016. The NRP will step-up the translation of our robotics R&D capabilities, particularly in sectors like manufacturing, logistics, facilities management, and healthcare.

Intellectual Property (IP)

In 2024, Singapore moved up the World Intellectual Property Organization’s Global Innovation Index, ranking fourth globally and top in Asia. Through the Singapore IP Strategy 2030, we continued to facilitate our enterprises' use of intangible assets (IA) and IP for growth.

In September 2023, we introduced the GoBusiness IP Grow platform to help enterprises connect with IA/IP service providers. As at October 2024, more than 2,500 connections were established, with close to 150 listed service providers providing enterprises with IA/IP solutions such as trademark and patent registration and IP management, to support their business expansion.
In September 2023, we introduced the “Intangibles Disclosure Framework” to help enterprises disclose their IA in a comprehensive and consistent manner. This enabled potential investors and business partners to better assess enterprises’ business and financial prospects when making investment and collaboration decisions, thereby facilitating enterprises’ access to financing and more opportunities for business growth.

Upholding an open and rules-based regional trade architecture

To maintain businesses’ confidence in operating and using Singapore as a launchpad to opportunities in the region, we continued to advocate for free and open trade, and a rules-based multilateral trading system.

We have built an extensive network of 27 Free Trade Agreements (FTAs) that are currently in-force, including regional economic initiatives such as the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
We are also a founding member of novel economic partnerships that are different from the traditional FTAs, but facilitate broader economic cooperation, such as the Indo-Pacific Economic Framework.
These overlapping and mutually reinforcing concentric trade circles will help to strengthen multilateralism, the rules-based trading order and enhance Singapore’s value proposition as a trade hub for our economic partners.

For our economy to thrive, Singapore must remain a trusted jurisdiction, through strong rule of law and a stable legal system.

The quality and expertise of legal professionals in Singapore remained highly trusted within and beyond Singapore. In 2023, we achieved $1.4 billion in our exports of legal services, a 25% increase from $1.1 billion in 2019.
In 2023, the Singapore International Arbitration Centre recorded a 38% increase in caseload from 2019, the second highest ever after 2020. The caseloads at the Singapore International Mediation Centre and the Singapore International Commercial Court have also steadily increased, reaching historic highs in 2023. This trend of rising caseloads reflected our strong reputation as an international dispute resolution hub.

We continued to uphold high standards to foster a responsive and forward-looking regulatory environment that supports enterprise and innovation in Singapore.

Since April 2023, the functions of setting accounting standards for companies, charities, co-operative societies, and societies in Singapore by the Accounting Standards Council and of developing the accountancy sector by the Singapore Accountancy Commission, were merged with the Accounting and Corporate Regulatory Authority (ACRA). The consolidation of these functions in ACRA will strengthen regulation, standards-setting, and sector development to meet evolving needs.
High-quality audits, financial reporting, and business information underpin transparency and trust. From 1 July 2023, ACRA commenced Quality Control inspections on Public Accounting Entities (PAEs). Together with the tiered assessment framework for audit inspections, this will drive improvements in Public Accountants' and PAEs’ compliance with professional standards.
Given the heightened risks of money laundering and illicit financing activities, ACRA amended the Accountants Act to specify its powers to conduct Anti-Money Laundering and Combating the Financing of Terrorism inspections on PAEs and impose sanctions if they fail to comply with requirements. The Corporate Service Providers (CSP) Bill was passed in July 2024 to expand ACRA’s regulatory oversight of CSPs and companies, tighten Singapore’s penalty regime, and enhance transparency around nominee arrangements.

From strength to strength

Singapore must continue to adapt to global economic shifts, leverage technological advancements, and uphold good governance, to ensure that our business environment remains conducive for enterprise growth, innovation, and long-term sustainability.