Why Singapore is becoming a refuge for investors

When KPMG executive Anton Ruddenklau moved to high-rise Singapore from the leafy streets of a London commuter town, one of the first things he noticed was how easy it was to do business in the Southeast Asian nation.

“People are set up to build relationships here,” he told CNBC by phone.

It was January 2021, and Ruddenklau moved to Singapore to lead KPMG’s financial services advisory practice in the country. “You arrive and you realize that actually the government has a nation-building mindset that’s hugely enabling,” he said.

And, while Ruddenklau said Singapore as a market by itself is “not particularly interesting,” because of its small population, investors like it for its location, English common-law and large private capital markets, he added, describing it as a “hub” for capital flows into and out of Asia.

The level of foreign direct investment (FDI) in Singapore as a percentage of GDP is one of the highest in the world, according to the World Bank, with many international investors seeing the country as something of a refuge.

“A big reason Singapore attracts overseas investors is credibility,” according to Geoff Howie, a market strategist at the city-state’s stock exchange SGX Group. “It offers policy stability, strong institutions, deep trade and financial connectivity, and a currency that is increasingly seen as an anchor of macro discipline rather than a swing factor,” he told CNBC by email.

Indeed, the Singapore dollar hit its highest level against the U.S. dollar since October 2014 this week. As of Wednesday, it was trading at about 1.26.

In the five years that Ruddenklau has lived in Singapore, he’s observed it move away from being a “little red dot” — an affectionate, colloquial term referring to its size on the map — to something much more. Now it is “much more of a globally significant middle power,” Ruddenklau said, referring to a term Canadian Prime Minister Mark Carney used last week to describe his own country.

Tian Ong Foo, regional head and Singapore location head of Private Banking at Standard Chartered, told CNBC via email that the island nation is a “strategic base” to invest in markets like Indonesia, Malaysia and Thailand, “without taking on operational and regulatory complexity of those markets directly.” Super app Grab, for example, is run out of Singapore and operates in seven other countries in the region including Vietnam, Thailand and the Philippines.

“Compared to other hubs, it provides lower geopolitical risk, strong regulatory clarity, and a mature financial ecosystem,” Foo said.

Srini Nagarajan, managing director and head of Asia at British International Investment (BII), the U.K.’s impact investment body, described Singapore as the “perfect place” from which to invest into emerging economies in the region.

Nagarajan focuses on climate finance, while BII — which concentrates on the Philippines, Vietnam and Indonesia — has a mandate to invest up to £500 million (about $685 million) in green projects and technology in Southeast Asia by the end of this year. “These markets provide some of the best opportunities to take the most carbon out of the atmosphere in the shortest period of time,” Nagarajan said.

In October, BII committed $60 million into the Green Investment Partnership, an initiative set up by Singapore’s central bank — the Monetary Authority of Singapore, or MAS — to fund, among others, bio-energy and solar projects.

Morgan Stanley said many investors consider Singapore an “illiquid safe haven”, in a research note last year. But new policies designed to “reinvigorate” the stock market are set to change this, the bank added, noting an “unprecedented” $4 billion cash investment by the MAS to provide liquidity for small and mid-cap stocks.

Morgan Stanley estimated that the MSCI Singapore Index could double in value between 2025 and 2030, as the country enters “a new era of wealth creation.”

“Sixty years after its leap into independence, the country is now transforming from a safe harbor for global capital into a strategic engine of innovation and influence,” it said. 

Singapore is much more than just a refuge for investors, SGX’s Howie said: “It isn’t just about escaping volatility. It might be more about accessing a marketplace that offers both credible and evolving economic foundations that are conducive to value-focused investing.” But Ruddenklau said the island nation is a refuge for some. “If you’re high net worth or you’re [a] family office, absolutely,” he said.

Another reason the city-state is attractive for such investors is the lower prevalence of fraud and financial crime compared with other nations in the region. Singapore ranked 10th on the Global Fraud Index of 112 countries published in October, although it dropped from first to 10th for “fraud resilience” between 2024 and 2025, according to index publisher Sumsub.

Equity markets are attractive, according to Howie. “The market has just had its strongest rally in two decades, driven by earnings rather than speculation,” he said. The benchmark Straits Times Index rose about 29% in the year to Jan. 28, with banks, industrials, infrastructure and regionally-exposed businesses performing well.

Kelvin Tan, founder and CEO of Straits42 Group, singled out residential property as appealing for U.S. investors in particular, because it is exempt from ABSD — or Additional Buyer’s Stamp Duty — a tax of 60% of the property’s value that buyers from most countries must pay. Nationals from Norway, Switzerland, Iceland and Liechtenstein are also exempt from ABSD.

If you’re looking for high-risk, high-reward, Singapore might not be the place for you. But is Singapore the boring market some have suggested?

“I suspect that tag was associated with narrow returns … and limited narratives,” Howie said. “Today, it is better described as reliably investable. In a world where investors increasingly prize resilience, governance and downside protection, that reputation might become a strength, not a weakness.”

“Investors do not want surprises,” Ruddenklau said. “They want predictable, and Singapore gives them that.”

— CNBC’s Anniek Bao and Arjun Kharpal contributed to this report.