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What is Foreign Direct Investment (FDI) and Direct Investment Abroad (DIA)? |
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FDI in Singapore measures the amount of investment by foreign investors in their Singapore affiliates where they own at least 10 per cent of paid up capital. The 10 per cent rule is recommended in the IMF Balance of Payments Manual, fifth edition (BPM5). Foreign investment in Singapore companies with less than 10 per cent equity interest are considered as foreign portfolio investment.
Conversely, Singapore’s Direct Investment Abroad (DIA) refers to the amount of investment made by Singapore-based companies in their overseas affiliates where they own at least 10 per cent of paid up capital. |
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What constitutes FDI and DIA? |
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FDI stock comprises three components i.e. paid-up shares in affiliates, reserves attributed to foreign investor and net outstanding debt owed by the affiliates to their foreign parent company.
DIA stock consists of the following: paid-up shares in overseas affiliate, attributable reserves due to Singapore-based investors and net outstanding debt owed by the overseas affiliates to their Singapore-based parent company. |
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What is the difference between FDI and Investment Commitments? |
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Investment commitments, another measure of investment, refer to investment value in terms of fixed assets which foreign investors commit to invest in Singapore. It differs from FDI, which is more a financial valuation, in a few areas. For instance, purchases of fixed assets financed by loans from banks in the host countries would count as investment commitments but not FDI. On the other hand, reinvested earnings and other reserves of the affiliate are not included in investment commitment but included in FDI. |
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In what circumstances will FDI stock decline from one year to the next? |
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The stock of FDI may decline due to several reasons, of which the most common ones are:
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partial/complete divestment in direct investment enterprise by foreign direct investors; |
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direct investment enterprise buying back its shares from the direct investor; |
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direct investment enterprise is operating at a loss; |
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dividends distributed by direct investment enterprise are higher than current earnings recorded; |
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advances and redemption of inter-company loans or movement in short term trade credits with foreign direct investors resulting in reduction of liabilities of direct investment enterprise to their foreign direct investors; and |
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valuation changes and/or currency translation changes. |
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In what circumstances are negative FDI data recorded? |
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Negative stock of FDI may be recorded when:
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continuous losses in the direct investment enterprise leading to negative reserves; and/or |
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the value of loans/trade credits/debt securities extended by direct investment enterprise to foreign direct investors exceeding the corresponding value advanced by foreign direct investors to the direct investment enterprise. |
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Where can I find statistics on FDI and DIA? |
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FDI statistics are published in the report “Foreign Equity Investment in Singapore”. Detailed statistical tables on FDI, earnings and return on investment by country and activity are presented in the report |
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DIA statistics are available in the report “Singapore’s Investment Abroad”. The data are disaggregated by country, activity of Singapore investor and activity of overseas investment. |
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Which are the major investor countries in Singapore and which are the major destinations of Singapore’s overseas investment? |
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The stock of FDI in Singapore stood at $470 billion as at end 2008. United States ($52 billion) and United Kingdom ($52 billion) were the top two investor countries. Other countries with significant investment in Singapore include Netherlands ($49 billion), Japan ($49 billion) and British Virgin Islands ($31 billion).
The stock of DIA undertaken by Singapore’s corporate sector stood at $298 billion as at end 2008. The bulk of Singapore’s overseas investments were channelled to China ($48 billion), British Virgin Islands ($31 billion), United Kingdom ($25 billion) and Malaysia ($24 billion). |
