Investing in Singapore
Singapore Investment Framework
CPF (Central Provident Fund)
Mandatory contributions: 37% total (20% employee + 17% employer for most) split across three accounts:
- Ordinary Account (OA): 2.5%/year interest. For housing, education, and investment (CPFIS). Can be used to buy stocks, ETFs, unit trusts, and gold.
- Special Account (SA): 4.08%/year (2026 rate). For retirement. Higher rate than OA. Not available for investments outside of CPFIS-limited options (since 2024 SA has been closed for new members; existing SA balances remain).
- MediSave Account (MA): For healthcare expenses.
CPF Investment Scheme (CPFIS): Allows investing OA/SA balances in approved instruments (ETFs, unit trusts, bonds, insurance policies).
SRS (Supplementary Retirement Scheme)
Voluntary contributions: Up to $15,300/year (Singapore citizens/PRs). Contributions are tax-deductible. 50% of withdrawals are taxable (the other 50% is exempt). Tax rate applies based on your marginal rate at withdrawal (expected to be lower in retirement).
Cash Account
No capital gains tax. No dividend tax. No estate duty (abolished in 2008). One of the most tax-friendly jurisdictions for individual investors. Interest income up to ~$20,000/year is tax-exempt for individuals.
Singapore Stock Market
SGX (Singapore Exchange): One of the largest REIT listing venues globally. Heavy weighting in financials (~40%), REITs (~15%), and telecoms.
Straits Times Index (STI): The 30 largest companies listed on SGX. Notable: DBS Group, OCBC Bank, United Overseas Bank (UOB), Singapore Telecommunications (Singtel), CapitaLand Investment.
Popular ETFs: ES3 (Nikko AM STI ETF), G3B (SPDR Straits Times Index ETF), MBH (Nikko AM SGD Investment Grade Corporate Bond ETF), A35 (Nikko AM Singapore Bond ETF).
Singapore Savings Bonds (SSB)
Government-backed bonds with up to 10-year maturity. Interest rates increase over time (step-up structure). Fully redeemable at any time with no penalty. Current interest (2026): ~2.5-3.0% for the first year, stepping to ~3.0-3.5% by year 10. Maximum holding per individual: $200,000.
Best Brokers for Singapore Investors
- DBS Vickers: Traditional broker, integrated with DBS/POSB. Good for SGX stocks.
- Interactive Brokers Singapore: Best for US stocks, options, and low FX fees. US estate tax risk on US assets over $60K.
- Saxo Markets Singapore: Good platform for global markets. Higher FX fees.
- Tiger Brokers: Low commissions, US and SG stocks. Popular with younger investors.
- FSMOne (Fundsupermart): Best for unit trusts and bonds.
- POEMS (Phillip Securities): SGX, US, and regional markets. CFD trading.
Key Considerations
- US Estate Tax Exposure: Singapore is a common law jurisdiction. If you hold US-listed stocks worth over $60,000 USD, you may face US estate tax (26-40%) upon death. Consider LSE-listed/UCITS ETFs instead.
- Foreign Tax Credits: Singapore has a territorial tax system. Dividends from foreign stocks may have withholding tax that cannot be recovered in Singapore.
- CPF Life: The national annuity scheme for retirement. Minimum Sum (2026): $205,800 in your Retirement Account at age 55.
- REITs: SGX is a global hub for REITs (i.e., CapitaLand, Mapletree, Frasers). REIT dividends are subject to 0% withholding tax for individuals (for specific REITs with REIT status).
- Currency Risk: SGD is managed by MAS against a basket of currencies (NEER). Historically has appreciated modestly over time.