Singapore adopts an open foreign investment regime. Generally, there are no restrictions against or controls over foreign investments except in some specific sectors highlighted below.  Apart from foreign investment restrictions in these sectors, there are also certain sectors where prior approval from the relevant government authorities would be required before an investor (whether local or foreign) can acquire shares beyond a certain specified percentage and these are usually the regulated industries, such as finance, postal and telecommunication.

Foreign investment restrictions are imposed on limited sectors with a primary focus on national security

Foreign investors generally refer to any individuals who are not Singapore citizens or any entities that are not majority-owned or controlled by Singapore citizens. We do not have regulations targeting foreign investments from any particular countries but under some of the free trade agreements that Singapore signed with foreign countries, investments in certain specified sectors may be exempted from foreign investment restrictions (subject to the terms of the free trade agreements). 

Some key sectors which are subject to foreign investment restrictions include:

• Broadcasting;
• Newspaper;
• Real estate; and
• Legal profession.

In addition, investments in certain sectors that are strategically important for the social, financial and economic infrastructure of the country are controlled by the government through regulatory approvals and licensing requirements.

Broadcasting

Any foreign source, or a company that is controlled by any foreign source, is prohibited from holding 49% or more of the shares or controlling 49% or more of the voting power, in a broadcasting company or its holding company (including where the holding company is an umbrella variable capital company ("VCC")). The foreign source includes any:

• a foreign government;
• a foreign company, association or society constituted outside Singapore (whether it has a branch office or place of business in Singapore);
• a non-Singapore citizen (whether he is a resident of Singapore); or
• any body corporate, unincorporated association or body constituted in Singapore where one or more of its members or directors are not Singapore citizens or are foreign companies and is declared by the Minister for Communications and Information ("Minister") to be a foreign source.

The Minister is empowered under the Broadcasting Act 1994 of Singapore, to declare any other source outside Singapore to be a foreign source. The license of a broadcasting company that falls foul of this requirement will be canceled.

Any acquisition of substantial shareholdings in, or control of shareholdings and voting power in, broadcasting companies must be approved by the Minister. The Minister will only grant his approval if he is satisfied that the person is a fit and proper person, the broadcasting company will continue to conduct its business prudently and comply with the laws (despite the change of shareholding and control) and it is in the national interest to do so.  

In addition, the chief executive officer and at least half of the directors of a broadcasting company must be Singapore citizens.

A person is not allowed to receive any funds from any foreign source to finance any broadcasting service by a broadcasting company unless it is approved by the Info-communications Media Development Authority ("IMDA"). IMDA may grant its approval if it is satisfied that the fund is intended for bona fide commercial purposes. A person who contravenes this requirement commits an offense punishable by a fine and/or imprisonment.

Newspaper

A newspaper company must have two classes of shares, namely, management shares and ordinary shares. Management shares must only be issued or transferred to Singapore citizens or a corporation that has been approved by the Minister in writing. All directors of a newspaper company must be Singapore citizens.

In addition, any acquisition of substantial shareholdings in, or control of shareholdings and voting power in, a newspaper company must be approved by the Minister. The Minister will only grant his approval if he is satisfied that the person is a fit and proper person, the newspaper company will continue to conduct its business prudently and comply with the laws (despite the change of shareholding and control) and it is in the national interest to do so. 

The Newspaper and Printing Presses Act 1974 of Singapore, prohibits any person from receiving any funds from a foreign source on behalf of or for the purpose of any newspaper without the prior approval of the Minister. Approval will be granted by the Minister if he is satisfied that the funds are for bona fide commercial purposes. It is an offense punishable by a fine and/or imprisonment to receive foreign funds in breach of this requirement.

Real Estate

The restrictions on foreign ownership of property apply to landed residential property, including vacant residential land, houses, shophouses for non-commercial use, strata landed house which is not within an approved condominium development under the Planning Act 1998 of Singapore, etc. Any transfer or sale of a landed residential property to a foreign person without the requisite approval under the Residential Property Act 1976 of Singapore, is null and void.

A foreign person means any person who is not a Singapore citizen or a Singapore company, limited liability partnership ("LLP") or society. A Singapore company or a Singapore LLP is one that is constituted in Singapore and whose directors, members, or partners (as the case may be) are all Singapore citizens, Singapore companies and Singapore LLPs. A Singapore society means a society constituted in Singapore and all of whose members are Singapore citizens, and all of whose trustees are Singapore citizens or a trusted company licensed under the Trust Companies Act 2005 of Singapore.

A housing developer who is a foreign citizen, a foreign company, foreign LLP or foreign society may purchase vacant residential land to construct flats or dwellings for sale by applying for a Qualifying Certificate. The foreign housing developer is subject to additional conditions under the Qualifying Certificate regime. Publicly listed housing developers that are foreign companies, but with a substantial connection to Singapore, may apply to the Controller of Residential Property for an exemption from the Qualifying Certificate regime. Such applications will be assessed on a case-by-case basis.

Legal Profession

Foreign law firms are only allowed to provide Singapore law-related legal services in Singapore in limited contexts if they have obtained the relevant license to do so pursuant to the Legal Profession Act 1966 of Singapore.

A foreign lawyer must seek approval from the Director of Legal Services under the Legal Profession Act 1966 before he is allowed to be a director, partner or shareholder in a Singapore law practice or to share the profits of the Singapore law practice. Such approval may be granted with such conditions as may be prescribed by the Director or Legal Services.

Please refer to our response to "What are the relevant thresholds?".

Please refer to our response to "What sectors are subject to Foreign Investment Restrictions screening?" and "What are the relevant thresholds?" Where Ministerial or regulatory approvals are required in relation to the ownership of shares in a regulated entity and they are not obtained, the Minister or regulators have, among other things, the power to restrict the transfer or disposal of the shares.

The COVID-19 pandemic did not have any impact on the foreign investment restrictions applicable to the selected sectors discussed above.

The Singapore Economic Development Board ("EDB") undertakes investment promotion and industry development in the manufacturing and internationally tradeable services sectors. Singapore adopts an open foreign investment regime and maintains external connectivity and business continuity so as to attract foreign investments that will enhance Singapore's position as a global center for business, innovation and talent.

Please refer to our response to "What sectors are subject to Foreign Investment Restrictions screening?" and "What are the relevant thresholds?". Foreign Investment Restrictions are only imposed on limited sectors within structured legal and regulatory frameworks. There have been no significant changes and developments in the past 6 months in the manner in which foreign investments are reviewed in these sectors. In certain cases, foreign investment in the form of joint ventures or mergers and acquisitions can give rise to antitrust concerns and may require notifications to, filings with and/or approvals from the competition authorities in Singapore.

In November 2023, the Significant Investments Review Bill was introduced in the Singapore Parliament. The Bill sets out a new regime to regulate and control significant investments in critical entities that are crucial to Singapore's economy and society with an aim to ensure the business continuity of these critical entities. This new investment management regime complements existing sectoral legislation which provides ownership and control safeguards for entities in sectors that are critical to Singapore’s national security interests. Please refer to our response to "What sectors are subject to Foreign Investment Restrictions screening?".

The Bill aims to cover critical entities not adequately covered under existing sectoral legislation. Therefore, only a handful of entities are expected to be regulated under the Bill. Entities that are incorporated, formed, or established in Singapore, carry out activities in Singapore, or provide goods and services to persons in Singapore will be designated under the Bill (“Designated Entities”) and subject to, among others, ownership and control requirements. These requirements include:

• A person who becomes a 5% controller of a Designated Entity must notify the Minister for Trade and Industry (“Minister”).
• A person must seek the Minister’s approval before becoming a 12%, 25%, or 50% controller, an indirect controller, or acquiring as a going concern (parts of) the business or undertaking of a Designated Entity.
• A person who intends to sell his/her stakes in a Designated Entity which would result in him/her ceasing to be a 50% or 75% controller of the Designated Entity must seek the Minister’s approval before doing so.
• A Designated Entity must notify the Minister of the above-mentioned changes in ownership and control of the Designated Entities after becoming aware of the events.
• A Designated Entity must seek approval for the appointment of its key officers such as the chief executive officer, directors, and the chairperson of its Board of Directors.

Designation under the Bill is on an individual entity basis, instead of on a sectorial basis. The ownership and control requirements will apply to both foreign and local investors. The Ministry of Trade and Industry will be engaging with the entities being considered for potential designation under the Bill to address their concerns. 

If the Bill is passed by the Singapore Parliament, the new investment management regime under the Bill is expected to come into force in 2024.