Country

Amount Invested

United States of America

$153,000,000,000

Japan

$109,300,000,000

British Virgin Islands

$87,000,000,000

Cayman Islands

$77,700,000,000

Netherlands

$69,500,000,000

United Kingdom

$62,200,000,000

Switzerland

$43,600,000,000

Hong Kong

$43,400,000,000

Luxembourg

$37,600,000,000

Bermuda

$35,000,000,000
Table : Top 10 Sources of FDI in Singapore for 2014

Source: Department of Statistics, Singapore

Table : FDI by Activity in Singapore
Activity

Amount Invested (in billion)

Financial & Insurance

515,562

Wholesale & Retail Trade

176,577

Manufacturing

147,562

Professional & Administrative

74,671

Transport & Storage

37,449

Source: Department of Statistics, Singapore

For the year 2015, there are a total of 190,100 enterprises in Singapore. 99% of the total
enterprises are composed of SMEs, and 82% of which are local-owned enterprises. 1 However,
Singapore has a different definition of SME compared to the Philippines. Singapore defines SME

1 https://www.singstat.gov.sg/docs/default-source/default-documentlibrary/statistics/visualising_data/profile-of-enterprises-2015.pdf

as Companys annual sales turnover of not more than S$100 million or employment size of not
more than 200 workers. 2
Table : Top 5 Sources of FDI in Malaysia for 2014
Country

Amount (in RM billion)

Singapore

7.5

Netherlands

6.8

Hong Kong

3.4

Cayman Islands

2.4

Bermuda

2.3

Source: Department of Statistics, Malaysia

As for the industries in Malaysia, the service sector had the most FDI with 46.6%, followed by
mining & quarrying sector with 36%, and manufacturing sector with (13.2%).
Table : Number of SMEs in Malaysia 2011
Industry

Total

SMEs

Services

591,883

580,985

% of SMEs
over total
98.2%

Manufacturing

39,669

37,861

95.4%

Construction

22,140

19,283

87.1%

Agriculture

8,829

6,708

76%

Mining & Quarrying

418

299

71.5%

Total Establishments

662,939

645,136

97.3%

Source: SMEs Annual Report Malaysia, 2011/2012

2 http://www.bcm.org.sg/Portals/0/Resources/New%20SME%20Definition.pdf

Based from the data in the table, the SMEs comprises 97.3% of all the enterprises in
Malaysia. However, Malaysia has a different definition of SME for those which are under
manufacturing, and those which are under serves and other sectors. In order for an enterprise to
be classified as medium under the manufacturing sector, it should have a sales turnover of at
least RM15 million, but not more than RM50 million, or its number employees must be at least
75, but not more than 200. For the small enterprises, it should have a sales turnover of at least
RM300,000, but should be less than RM15 million. In order for an enterprise to be classified as
medium under the service and other sectors, the sales turnover must be at least RM3 million, but
not more than RM20 million, or its number of employees must be at least 30, but not more than
75. For the small enterprises, it should have a sales turnover of at least RM300,000, but should
be less than RM3 million.3
Investment Laws in ASEAN Countries
In Singapore, they also have foreign investment laws to be implemented in order attract
investments, as well as protect their local firms. Unlike here in the Philippines, they allow
foreign investors to own 100% of its equity except for industries which are considered to be
Singapores national security such as telecommunications, media, financial services, and legal
and property ownership. For telecommunications, foreign investors do not have any limitation
relating to its equity. However, the Infocom Development Authority of Singapore is responsible
for giving licenses to those who would want to invest in telecommunications. 4 For media, foreign
investors are allowed, but are only limited to 49% foreign equity or less. For banking, the
3 http://www.smecorp.gov.my/index.php/en/policies/2015-12-21-09-09-49/smedefinition
4 Singapore, Telecommunications Act.

government of Singapore already removed the 40% limitation to foreign investors, but it is not
yet ready to approve foreign investors in acquiring local banks. Last June 2004, the government
already permitted foreign banks to operate, but they are strictly prohibited from accessing ATM
networks of local banks.5
In Thailand, there are also Investment Laws just Singapore and Philippines. The main law
governing the foreign investments in Thailand is the 1999 Foreign Business Act (FBA) which
took effect after revoking the previous 1972 National Executive Council Announcement No. 281
or the Alien Business Law. In order to attract potential foreign investments, the Board of
Investments give out privileges such as incentives, including tax benefits to foreign investors and
its shareholders. In order to receive these privileges, the BOI prescribes the minimum capital for
businesses, and the investor is given 6 months in order to meet the conditions of BOI. Similar to
the Negative List of FIA, the FBA of Thailand also categorizes businesses to which foreign
participation is totally restricted or partially restricted. The categories are named as: Schedule 1,
which are businesses totally closed to foreign investors; Schedule 2, which are businesses only
allowed with the approval of the Minister for Commerce and the Cabinet or foreign-owned
businesses which were already operational before FBA was implemented; Schedule 3, which are
businesses that are not capable of competing against foreigners. A Foreign Business License is
needed in order to be a part of those under Schedule 2 and 3.6
In Malaysia, there are also investment policies to be followed just like other countries in order to
attract foreign investments. Malaysia gives privileges to foreign investors by offering them

5 Singapore, Banking Act

6 Thailand, Foreign Business Act

incentives and other advantages such as Pioneer status, Investment tax allowance and tax
holidays, reinvestment allowance, and etc.7 Since 2009, the government of Malaysia liberalized
the rules for foreign investors in some sectors in order to increase the competitiveness of all
firms, which are mostly comprised of SMEs.8 However, there are still some restrictions on
foreign equity in some sectors such as 30% in banks, 70% in insurance companies, 30% in retail,
and 70% in telecommunications.9 Authorities also evaluate if the incentives they offer would
benefit their economy against its costs. In order to help the government evaluate this, the OECD
has created a Checklist for Foreign Direct Investment Incentive Policies.10

7 Malaysia, Promotion of Investment Act 1986 and Income Tax 1967

8 http://investasean.asean.org/files/upload/IPR_Malaysia_2013_Summary.pdf
9 Id.
10 Id