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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 are negative FDI data recorded? |
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Negative FDI is often interpreted as withdrawal of investment by foreign investors from the host economy. While one can observe a negative value of FDI in such a scenario, it can also arise when:
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continuous losses in the Singapore affiliate leading to negative reserves; and/or |
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loans extended by Singapore affiliate to their foreign parent company exceeds the amount loaned by the foreign parent to its Singapore affiliate. |
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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 $346 billion as at end 2006. United Kingdom ($53 billion) and United States ($46 billion) were the top two investor countries. Other countries with significant investment in Singapore include Japan ($44 billion), Netherlands ($34 billion) and Switzerland ($26 billion).
The stock of DIA undertaken by Singapore’s corporate sector reached $226 billion as at end 2006. The bulk of Singapore’s overseas investments were channeled to British Virgin Islands ($33 billion), China ($31 billion), Malaysia ($18 billion) and Indonesia ($16 billion). |
