Singapore attracts most foreign investment in Southeast Asia, ranks 2nd globally after US

SINGAPORE: Southeast Asia’s strong performance in terms of investments was noted in a recent report. In 2025, the region attracted a record US$244 billion (S$314.52 billion) in foreign direct investment (FDI), marking a 10% increase from the year before.

The July 21 report from Bloomberg, based on an analysis from United Overseas Bank (UOB) using UN Trade and Development (UNCTAD) data, revealed that Southeast Asia’s growth was larger than the average around the world of 6%.

Importantly, it showed that the region remains a popular destination for international investors, in part due to a diversification of supply chains.

Among Southeast Asian nations, Singapore is still the investment powerhouse, having attracted US$151 billion (S$194.65 billion) in foreign investments in 2025, or 61.9% of the total for the region. Notably, the city-state ranked as the world’s second-largest FDI destination after the United States, which is an astonishing feat for a country with a relatively small population and land mass.

This means that almost two out of every three investment dollars coming into Southeast Asia went to Singapore. 

Notably, many multinational companies route investments through Singapore before expanding elsewhere in Asia, so its FDI statistics include regional headquarters, financial and holding company investments, investments into technology and data centres, manufacturing and logistics projects, and capital later reinvested into neighbouring countries.

In terms of FDI, Indonesia followed with US$21.4 billion (8.8%), and Vietnam took third place with US$20.4 billion (8.3%). For Thailand, it was US$19.1 billion (7.8%), for Malaysia it was US$15.4 billion (6.3%), and the Philippines attracted US$9billion (3.7%). The other Southeast Asian nations took in the rest (3.2%).

However, Malaysia’s FDI grew the fastest in 2025, increasing by 51% in large part due to data centres, digital infrastructure and technology. Similarly, Thailand and Vietnam’s FDI grew.

Indonesia’s FDI, meanwhile, fell by 14%. However, according to UOB, this does not necessarily mean a loss of confidence on the part of investors, as Indonesia continues to attract major long-term investments in industrial projects, acquisitions and infrastructure.

UOB said that the region’s strong performance is because of such long-term trends that include firms moving supply chains away from China, increased investment in digital infrastructure, such as data centres and cloud computing, and also growing interest in green industries and renewable energy. /TISG

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