FAQ on Trade & Investment

Investment

  • What is Foreign Direct Investment (FDI)?
  • How is FDI different from Fixed Assets Investment (FAI) commitments?
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  • Under what circumstances will FDI be negative?
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  • Do changes in FDI stock positions equate to FDI flows?
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    Trade in Services

  • What is International Trade in Services?
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  • How is the International Trade in Services statistics compiled?
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  • What are the services categories compiled by DOS for International Trade in Services?
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  • What are Foreign Affiliates statistics?
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    What is Foreign Direct Investment (FDI)?

    Foreign Direct Investment (FDI) refers to cross-border investment, where a direct investor residing in one economy owns 10 per cent or more of the ordinary shares or voting power in a direct investment enterprise, residing in another country.

    FDI is measured by the sum of three components:

    1. equity capital invested by the direct investor in the direct investment enterprise;
    2. retained earnings accrued to the direct investor, which are earnings generated by the direct investment enterprise after deducting the dividends payable to the direct investor; and
    3. net intercompany loans between the direct investor and the direct investment enterprise.

     

    How is FDI different from Fixed Assets Investment (FAI) commitments?

    FDI flows compiled by the Department of Statistics cover the various industries and sectors of the Singapore economy, whereas FAI commitments cover investments in Singapore facilitated by the Economic Development Board. Some key differences between FDI flows and FAI commitments are:

    • FDI flows are recorded only when a direct investment transaction takes place whereas FAI commitments are recorded during the period when the undertaking to implement the project is made (regardless of whether the actual investment on fixed assets has taken place during the period).
    • FDI flows only includes the financing from the direct investor and related entities, and not the external financing (e.g., borrowings from banks) whereas FAI commitments do not take into consideration the source of the financing.

    For more information, you may view the Understanding FDI and FAI Commitments Infographic.pdf (399 KB)

     

    Under what circumstances will FDI be negative?

    Negative FDI may be recorded when:

    • negative retained earnings are accrued to the direct investor due to losses incurred by the direct investment enterprise
    • the value of loans from the direct investment enterprise to the direct investor is larger than the loans from the direct investor to the direct investment enterprise

     

    Do changes in FDI stock positions equate to FDI flows?

    No. Changes in stock positions consist of not only flows (i.e., net transactions), but also other changes in volume (e.g., write-offs, re-domiciliations) and revaluations (due to exchange rate and other price changes) during the period. Hence, the change in direct investment stock is not equivalent to the direct investment flows for that period.

     

    What is International Trade in Services?

    Singapore’s International Trade in Services are statistics that measure services transactions between Singapore and its overseas trading partners.

     

    How is the International Trade in Services statistics compiled?

    The Department of Statistics (DOS) compiles International Trade in Services statistics based on international guidelines from the United Nations Manual on Statistics of International Trade in Services (MSITS) and International Monetary Fund's Balance of Payments and International Investment Position Manual (BPM). These guidelines ensure consistency and comparability across countries.

    The main data source used for compilation is the International Trade in Services Survey conducted by DOS. Administrative data is used where available to supplement the estimates.

     

    What are the services categories compiled by DOS for International Trade in Services?

    DOS compiles statistics on International Trade in Services for these services categories:

    • Manufacturing Services on Physical Inputs Owned by Others
    • Maintenance and Repair Services
    • Transport
    • Travel
    • Insurance
    • Government Goods and Services
    • Construction
    • Financial
    • Telecommunications, Computer and Information
    • Charges for the Use of Intellectual Property
    • Personal, Cultural and Recreational
    • Other Business Services (includes Accounting, Advertising and Market Research, Architectural, Business Management, Engineering and Technical, Legal, Research and Development, Operating Leasing, and Trade-Related Services)

    Detailed services categories which provide additional breakdown are also available. You may refer to SingStat Table Builder via the following selections: Trade & Investment >> Trade in Services (TIS)>> International Trade in Services (TIS).

    In addition, DOS also compiles exports and imports of services by trading partners. You may refer to SingStat Table Builder via the following selections: Trade & Investment >> Trade in Services (TIS)>> Export of Services or Import of Services.

     

    What are Foreign Affiliates statistics?

    DOS compiles statistics of foreign affiliates in Singapore also known as inward foreign affiliate statistics (inward FATS). A foreign affiliate refers to an enterprise where a single foreign investor has majority ownership (more than 50% ownership of the enterprise).

    Inward FATS provide an overview of the activities of foreign affiliates in Singapore through a range of indicators such as value added, number of enterprises, employment, exports and imports of goods and services.