The UK and US are undisputedly the top leaders of the global financial markets, offering immense opportunities for traders and investors to grow their portfolios. However, with ongoing geopolitical tensions and market disruptions, many investors are shifting to more stable emerging markets. Here are a few reasons why Singapore has emerged as a hub for forex trading.
Singapore: An Economic Overview
Forex trading in Singapore is thriving due to the country’s economic appeal. Singapore’s booming economy and business-friendly policies are core factors pushing the country to become a center point for forex trading in Asia. Following its independence in 1965, Singapore has advanced swiftly from a low to a high-income economy. The GDP growth has been among the most impressive in the world, at an average of 7%, growing as high as 9.2% within two decades.
With most of the population at middle-income status, Singapore’s GDP per person is $88,000, doubling in over twenty years. The median wage per Singaporean resident working full time has grown by 43% compared to 8% in the US. Now at $46,000, the median full-time wage in Singapore beats that of Britain, which is currently at $44,000.
Putting the focus on Asia, Singapore now leads in salaries, disbursing around 50% higher than Hong Kong, the fourth largest economy in Asia, following China, Japan, and South Korea. In 2017, the Monetary Authority of Singapore announced it had under management $2.4 trillion in assets, which was about three-quarters that of Hong Kong at the time. Fast forward to 2022: Singapore has grown its assets and managed $3.6 trillion, just 8% less than Hong Kong’s.
Now, in 2024, Singapore is the third largest forex trading center globally, sitting closely behind London and New York. The city-state is the largest forex hub in Asia-Pacific and pulls close to 1 trillion US dollars daily in forex exchange trading volume.
Keys Drivers for Singapore as an Emerging Market
Within the sectors of forex trading, shipping, commodity trading, and private businesses, the country has emerged as one of the most desired destinations for investors. Here are the top factors driving Singapore’s emergence:
1. Strong Focus on Research and Development
The Singapore government offers tax incentives, research grants, and public-private partnerships in a bid to promote research and development. It launched Research, Innovation, and Enterprise (RIE) 2025, a plan to promote research in key sectors like manufacturing, health and biomedical sciences, and urban solutions.
One such effort is the plan to become the global hub for advanced manufacturing by 2030, with a strong focus on semiconductors, petrochemicals, and aerospace. One of Singapore’s biggest attractions for investors is the semiconductor industry. Recently, Global Foundries, one of the Nasdaq-listed companies, announced the opening of a fabrication plant. This plan features a total investment of $4 billion with 1,000 projected job opportunities for process engineers and equipment technicians.
2. Strategic Location for Pan-National Business and Forex Trading
Businesses and investors looking to expand into Asia markets, particularly the rest of ASEAN, use Singapore as a strategic gateway. The Singapore Department of Statistics reported the total import-export volume to be US$964.5bn in 2023, with machinery, transport equipment, and chemicals accounting for most commodities traded.
Singapore’s Asia-Pacific geographical location, incorporation of the English language as its primary working language, and business-friendly international policies make the country an ideal location for business and strategic investments.
Additionally, the city’s overlapping trading hours with major financial centers like Tokyo, London, and New York further improves its appeal as a forex trading hub. The country does not tax forex trading except when it’s the trader’s primary source of income.
3. Commitment to Sustainable and Innovative Projects for Economic Development
Home to over 1,500 fintech companies, Singapore is one of the leading countries in the innovative sector. The city-state has a strong reputation as a region for data centers and fintech.
The Monetary Authority of Singapore (MAS) plans to invest $100 million in Singaporean dollars to develop the country’s AI and quantum sphere to stay ahead in innovative tech solutions. This is in addition to the government’s Green Data Center plan to harness 300 MW of data center capacity by promoting renewable, low-carbon energy sources and other resource-efficient technologies.
In line with economic development goals, the Singapore government offers various tax incentives to promote foreign direct investments in the country. These tax incentives include the Start-Up Tax Exemption Scheme, Start-Up SG Tech, and the 100 percent investment allowance scheme.
Why Singapore is the Ideal Destination for Forex Traders
Singapore’s strong reputation as a stable political and economic terrain is attracting wealth managers, traders, and investors from around the world. As Asia’s leading GDP and its tax exemptions on forex trading, Singapore stands out as an ideal location for forex traders seeking financial markets with less chaos and market disruptions.