Singapore as a Base for French Investment and Expansion in ASEAN

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www.aseanbriefing.com, Nov. 16, 2022 – 

Singapore and France have enjoyed a long history of bilateral relations, with France being one of thirteen countries to recognize Singapore's independence in 1965. Since then, bilateral trade has steadily grown, reaching over US$15 billion in 2021.

Now Singapore has become an essential base for not only French companies looking to establish their regional headquarters but also a base for expansion into other Southeast Asian markets. As such, over 1,900 French companies in the city-state cover a wide range of sectors from electronics to finance to aerospace.

A robust relationship built over the years

The trade in goods and services between Singapore and France was impacted by the pandemic, and although total trade did slightly improve by 0.8 percent in 2021 according to the Direction Générale du Trésor, it was still 24 percent lower compared to 2019.

In 2021, Singapore was France's 12th largest trading partner. France saw over US$8 billion worth of exports to the city-state in the same year. This included perfumes, and cosmetics products (US$1.51 billion), garments (US$1.1 billion) beverages, spirits, and vinegar (US$1.09 billion), electrical and electronic equipment (US$1.02 billion), aircraft, spacecraft (US$841 million).

Meanwhile, Singapore exported more than US$3 billion worth of goods to France in 2021 which mostly comprised electric and electronic equipment (US$1.48 billion), pharmaceutical products (US$473 million), and machinery, nuclear reactors, and boilers (US$390 million).

French companies expanding their presence in Singapore

For instance, French multinational energy company TotalEnergies has had its regional headquarters in Singapore since 1982 and expanded its office in 2019. In 2021, French utility company Engie announced that it will double its research and innovation team in Singapore over the next three years and collaborate with local higher education institutions to focus on low-carbon cooling systems, the integration of renewable energy, and the greening of data centers. The move was supported by the Singapore Economic Development Board.

Soitec, the French chipmaker, announced in 2021 a multi-million-dollar upgrade for its factory (a 300 mm silicon-on-insulator wafer fabrication plant), and in 2022, amid the ongoing global chip shortage, Soitec planned to add US$ 570 million to its initial investment thus doubling the size of its factory.

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