Kearney’s 2026 FDI Confidence Index places Singapore 8th, up from 15th last year—its highest rank since 2012, when it was 7th. In an Index that surveys more than 500 senior executives at leading global companies on where they plan to invest over the next three years, that shift represents the sharpest movement within this year’s top 10.
The Index is forward-looking, which is what gives it real utility. It reflects intent rather than historical outcomes, and this year that intent suggests a global environment that is steadily recalibrating. Asia now accounts for 10 of the top 25 markets, marking the first time in 13 years that Europe does not hold the largest share. Japan has risen to 3rd, China to 4th, and South Korea to 11th, while Thailand and Malaysia have re-entered the list. Singapore has made the most significant leap among them.
For me, the movement in ranking points to something less visible. Rankings are ultimately an outcome; the more important story lies in the consistency of the groundwork behind them. That continuity across policy, capability-building, and institutional trust is what investors appear to be responding to more clearly this year.
What investors are telling us about Singapore
The Index asks a specific question: for each market under consideration, which two factors most strongly drive investment decisions? The responses for Singapore point to a broad-based set of strengths rather than a single defining attribute.
Technological innovation is cited by 34 percent of investors as the primary reason to invest, followed by economic performance at 30 percent—supported by continued expansion in biomedical manufacturing, electronics, and AI-driven semiconductor and server growth. Ease of doing business is mentioned by 28 percent, talent by 26 percent, and transparent governance with low levels of corruption by 25 percent.
What stands out is the balance across these factors. Singapore’s attractiveness reflects how these elements reinforce one another: a strong innovation ecosystem operating within a stable regulatory environment, supported by deep talent and efficient business processes. In a year when 84 percent of global investors indicate that industrial policy is a critical factor in their decisions, and 79 percent highlight the uncertainty created by frequent policy changes, that consistency carries particular weight.
Technological innovation has also moved to the center of investment decision-making. It now ranks as the most important overall consideration across the Index, overtaking regulatory efficiency and domestic economic performance. Investors cite it as the strongest or joint-strongest reason to invest in 10 of the 25 ranked markets, including Singapore. This points to a structural shift in what drives attractiveness—one that Singapore has been positioning for over time.
Why the region is moving together
Singapore’s rise sits within a broader regional realignment. The shift toward Asia in this year’s Index reflects a set of overlapping dynamics rather than any single market story.
Part of this is geopolitical. Investors identify rising geopolitical tensions as the most likely global development over the coming year. In that context, what Kearney describes as “middle powers” are assuming greater relevance—markets that operate within established global rules, offer neutrality, and allow companies to build regional presence without being forced into binary alignments. Singapore, alongside markets such as Japan and Saudi Arabia, fits this positioning.
Another part is structural. Investment flows into developing Asia are becoming more concentrated, with ASEAN attracting around US$225 billion in FDI inflows in 2024. Supply chain diversification has also evolved: rather than exiting markets, companies are building optionality into their operating models, creating multiple pathways that allow them to respond to disruption more flexibly.
Within this broader shift, Singapore serves as a launchpad to the region through its strategic connectivity and partnerships such as the Johor–Singapore Special Economic Zone and the Batam–Bintan–Karimun region in Indonesia. According to the Orbis Crossborder Investment Database, Singapore is the most popular regional headquarters destination in Asia. This advantage continues to compound rather than plateau.
The ecosystem behind the confidence
Rankings tend to follow underlying conditions. The willingness of investors to commit capital over longer horizons in Singapore reflects the continued development of the broader ecosystem in which they operate.
The 2025 figures provide a useful indication: S$14.2 billion in fixed asset investment commitments and S$8.9 billion in total business expenditure per year, both up from the previous year. These are expected to generate around 15,700 jobs and S$18 billion in annual value-added over time.
Individual investments illustrate the nature of this confidence. Tekscend Photomask’s new Singapore plant, Alcon’s expansion of its Tuas manufacturing site as it marks 20 years in Singapore, and ANTA Sports’s plan to establish 1,000 Southeast Asia stores from its regional base here are not incremental decisions; they are long-term bets on Singapore’s innovation capacity, manufacturing ecosystem, and role as a strategic gateway to regional growth.
These commitments are supported by deliberate policy moves. Since 2024, Singapore has secured more than 70 AI centers of excellence and launched initiatives to accelerate AI adoption among enterprises. Singapore’s long-term commitment to research and innovation is also being reinforced through the Research, Innovation and Enterprise (RIE) 2030 Plan, which continues to deepen national capabilities in areas such as precision medicine, biomedical sciences, and advanced manufacturing.
The underlying digital infrastructure also plays a role. The digital economy now contributes close to 18 percent of GDP, reflecting sustained efforts by public institutions to build capability over time. This progress is increasingly visible in global benchmarks, including Kearney’s Global Cities Report, where Singapore has entered the top five and risen sharply in future outlook rankings.
As a mature investment destination, Singapore’s next phase of competitiveness will likely come from strengthening areas where it can build differentiated advantage, particularly in technological innovation. Given the structural limits in areas such as natural resources, the greater opportunity lies in deepening capabilities in AI, semiconductors, advanced manufacturing, and sustainability-related sectors. With strong fundamentals already in place, Singapore is well positioned to reinforce its role as a trusted, innovation-driven hub for Asia Pacific growth.
Taken together, these developments reflect a broader strategy focused on long-term competitiveness, innovation, and resilience—one that investors appear to be recognizing more clearly this year.
