PUBLISHED May 3rd, 2024 09:28 pm
The foreign exchange (forex or FX) market is strongly driven by the macroeconomic positioning of several countries, many of which can negatively or positively influence traders’ profitability. When market participants see a currency performing well, the price movements are evident in this country’s economic situation. Singapore became the third-largest FX center in 2023, trailing closely behind New York and London. Every day, Singapore sees over one trillion dollars in trades, and most of this positivity can be attributed to the country’s strategic positioning. It thrives as Asia’s corporate treasury hub and vibrant international financial center. Therefore, it has a lot in store for the online trading market and investors. In this article, we’ll unpack the advantages and perks of trading in this market.
Key Facts About the Foreign Exchange Climate in Singapore
The Monetary Authority of Singapore (MAS) published a report which provided an overview of the key facts of Singapore’s FX market. The average trading volume as of 2022 is $929 billion, and it is currently the #1 financial center in Asia. There are over 50 FX future and options contracts traded on Singapore-based exchanges, and its monetary authorities are constantly working with key players to facilitate and anchor e-trading facilities in the country. In addition, Singapore is a suitable trade environment for foreign investors and has other benefits like easy immigration policies and taxation. All these factors combined make the region a forex-friendly climate for investors.
What Makes Singapore Favourable for Online Traders
Investment in Singapore is easy due to its business-friendly environment. This is why you’d find that the country is listed as one of the best places for these forex professionals to live in. It is home to several international banks, investment institutions, firms, and some of the biggest investors in the currency market. Here are other factors that make it the perfect location for people looking for the best place to trade forex.
Favourable Regulation
The regulatory climate in Singapore is one of the many reasons you’d find most traders living or trading in the markets. For one, some regulatory bodies are on standby, taking strict measures to ensure the safety of investors. They have guidelines for brokerage and trading platforms and non-negotiable requirements. For instance, MAS follows up and ensures that these brokers submit necessary financial reports, trading statistics, and complaints that clear them for continued operations. There is a list of MAS-approved brokerage platforms that are fit to run operations in the country. Traders are exposed to a long list of safe and advanced trading platforms, with TradingView being one of the many available options.
High Foreign Direct Investment (FDI)
Singapore is appealing to investors as an offshore wealth-building and management location — it is the 3rd largest global recipient of foreign direct investment. Its geographical location is one of the factors contributing to this, and its proximity to major markets like China and Japan opens it up to roughly 3 billion consumers for businesses. Singapore also has one of the busiest ports in the world, with Changi International Airport’s connectivity making it accessible to immigrants, digital nomads, and investors from different regions. Generally, Singapore allows easy access for foreign retail and institutional investors, having built a system for them to thrive.
Low Taxation
There is a reason Singapore is regarded as a tax haven. It has a relatively low corporate tax bracket for institutional investors. Another significant advantage of the tax climate in this country is that traders are not required to pay taxes on capital appreciation of their investments. That is, they do not pay from their capital gains. This is quite the opposite for countries like the United States, where the government takes a sizable percentage of your gains. The volume of trades also determines how much tax you pay in the country. For instance, under the progressive resident tax rate, there are 0% for earnings up to $20,000 and not more than 22% for up to $320,000. Generally, Singapore is a low-tax-paying country, which makes it appealing to retail and institutional traders.
Quality Infrastructure
Singapore has always been a vibrant community for travellers, tourists, and migrants, and it is doing the same for online traders. It has achieved this through its quality infrastructure, top-tier internet connectivity, and a welcoming atmosphere for digital nomads. Rankings in the 2022 Network Readiness Index (NRI) had Singapore as the biggest in Asia for ICT infrastructure. According to Statista, the country has the fastest average fixed broadband speed globally, with a range of 278 Mbps. The country’s vision of being a world-class tech-driven location is yielding positive results and benefiting professionals in different fields.
Seamless Online Trading With Singapore’s Growing Economy
If you began reading this article with the question, “Why trade forex in Singapore?” in the back of your mind, you should have a bucket load of reasons to hold on to now. There are many good reasons why the country attracts e-traders, and the best part is that the listed benefits are open to all. Whether you’re a traveler or an immigrant trading forex, you have full access to make the most of all the country has to offer. This could be your cue to consider being a part of the financial market in Asia’s most prominent investment hub.