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In many respects, Singapore is the Switzerland of Asia.

Begun in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister's father, Mr. Lee Kuan Yew. While it is only 1/5 the size of Rhode Island and three times the size of Washington D.C., it is perhaps the most strategically important global trading, finance and service nexus in Asia.

Here is why you should consider investing in Singapore.

While Hong Kong and Shanghai will argue, Singapore is the busiest port in Asia situated next to the vital trading channel, the Straits of Malacca.

Unlike South Korea and Taiwan, which are heavily dependent on the cyclical electronics industry, Singapore has a well-diversified economy.

In many respects, Singapore is the Switzerland of Asia.

Begun in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister’s father, Mr. Lee Kuan Yew. While it is only 1/5 the size of Rhode Island and three times the size of Washington D.C., it is perhaps the most strategically important global trading, finance and service nexus in Asia.

Here is why you should consider investing in Singapore.

While Hong Kong and Shanghai will argue, Singapore is the busiest port in Asia situated next to the vital trading channel, the Straits of Malacca.

Unlike South Korea and Taiwan, which are heavily dependent on the cyclical electronics industry, Singapore has a well-diversified economy. 70% of its GDP is derivative to finance and services.

Singapore’s forecasts rules and regulations are mid the most loyalist in the world. For example, its rules on inventory returns and the expensing of stock options are more heeler than those in the United States.

Trade Surplus

Despite only 1.6% of its land modern suitable for pastoral matter and having to import barely everything including water, Singapore manages to have a trade surplus.

Singapore has a warranted budget, a stable currency and still manages to line up 5% of GDP for defense.

It represents a multi-ethnic society with 77% Chinese, 14% Malay and 8% Indian.

Singapore has a parliamentary form of government, an transliterate joint law judiciary system and is corruption and drug free. Slowly but surely, a freer political is developing with a Speaker’s Corner instituted in 2000 and the readiness to express one’s views freely anywhere with the exception of the sensitive topics of race and religion

Singapore’s educational performance is legendary. The fact that it has twice as many Internet users as television sets is telling.

Singapore’s New Resorts

Singapore is also impulsive with the times. To generate more investment, tax revenue, and add a bit of sparkle, Singapore recently being done the development of two large hangout resorts. It is part of a strategy to reduce the country’s dependence on manufacturing and to position itself as a livelier tourism destination. Of course, there will be restrictions. Singaporeans will have to pay a $60 entry fee and the gambling areas will be restricted to just 5% of the resort. to projections, the resorts will lead to $4 infinity in investments, $3.5 in returns revenues, 35,000 jobs and $350 million per year in taxes and fees.

Singapore has also made great strides in patching up misunderstandings with its neighbor to the north, Malaysia, from whom it split in 1965. Tax issues, water supply agreements and transportation arrangements are all moving much more smoothly.

Singapore is sharp at holding on to its manufacturing base even as several large semiconductor manufacturers such as National Semiconductor certified plans to move plants to house of cards and Malaysia. For thirty years, Singapore has relied on electronics as the spine of its manufacturing sector but is making the transition to a more service and R&D economy. Electronics is nearly 40% of manufacturing output but summing up for only 5% of employment. Surprisingly, some firms are moving manufacturing centers from porcelain to Singapore due to its infrastructure, logistics and laws protecting intellectual property. Exxon Mobil, Shell and Sumitomo are expanding petrochemical facilities and Singapore further 27,000 manufacturing jobs last year by moving up the food chain.

After 8.4% GDP growth in 2004 and a weak start early this year, Singapore’s economy posted 12% plus growth in the second quarter and should be a solid performer over the next few years. Continued strong global demand for transportation, journalism and logistics services, increasing IT spending, rising consumer spending and property prices and expanded tourism all point to continued growth.

An easy and smart way to invest in Singapore is through the Singapore iShare (EWS) which tracks the Singapore Straits index. It is up 26% over the past year and up 9.4% year to date. Its largest positions are in Singapore Telecom, United Overseas Bank and DBS Bank. Even better, it is tax efficient and has an catalogue expense ratio of only 0.59%. Trading at 14 times projected earnings, the Singapore market is still attractive. By comparison, the Switzerland market and iShare (EWL) is trading at 18 times earnings.

The epitome of quality and increasingly creative, Singapore is a great core holding for any global portfolio.

Carl Delfeld is head of the global remonstrative firm Chartwell Partners and editor of the Chartwell therapist and the Asia Investor Intelligence newsletters. He served on the executive tucker of the Asian Development Bank and is the composer of The New Global Investor (iUniverse:2005). For more information go to www.chartwelladvisor.com or call 877-221-1496

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