Singapore > Legal market overview
Singapore’s longstanding economic success has been built upon having one of the world’s most open, highly developed and stable economies, and a business-friendly environment that is conducive to attracting foreign direct investment. While manufacturing has historically been a strong suit, there is a notable trend towards high-end value-added industries, such as pharmaceuticals and biotechnology. Also, as one of the world’s leading financial centres, a number of foreign banks are headquartered in the city-state, and it is an economic hub for commercial activities elsewhere in Asia.
The flip-side of having an export-led trade-oriented economy, however, is that Singapore is particularly sensitive to economic and political headwinds across South East Asia, and further afield in India and China. Indonesia, for example, is one of the world’s fastest growing economies and investors use Singapore as a launch pad for investment activities there. Although it was anticipated that the 2014 election of Joko Widodo would lead to a major drive towards infrastructure investment and development, this has not yet materialised due to delays and bureaucratic infighting. Global macroeconomic trends that have dragged on the Singaporean economy include a slowdown in China, weak growth in Thailand and Malaysia, and economic stagnancy in the Eurozone. In the equity capital markets space, there were precious few IPOs of note in Singapore and little activity by way of primary fundraisings. More than 40% of companies listed on the Singapore Exchange originate from outside of Singapore. Economic growth in Singapore slowed to 2.9% in 2014, compared to 4.4% in 2013, and remained sluggish in the first half of 2015.
Aside from the above, the city-state’s highly developed legal system (particularly when compared to neighbouring countries) has enabled it to position itself as the main legal centre in the region for cross-border disputes and international arbitration; the Singapore International Mediation Centre (SIMC) and Singapore International Commercial Court (SICC) both recently opened in 2014 to expand the range of dispute resolution services available and attract more high-value disputes.
The legal market has traditionally included the four largest domestic firms: Allen & Gledhill LLP, Drew & Napier LLC, Rajah & Tann LLP and WongPartnership LLP. Other key local players include Colin Ng & Partners LLP, Shook Lin & Bok LLP and TSMP Law Corporation. Given Singapore’s status as a gateway to the rest of Asia, however, the government continually seeks to enhance the profile of the city-state’s legal market internationally. The sector’s gradual liberalisation has led to a notable influx of foreign entities, several of which have been awarded qualifying foreign law practice (QFLP) licences, or adopted strategies such as joint law ventures and foreign law alliances. The effect has been to place greater competitive pressures (including pricing) on the longest-established players. This trend continues apace; 2014 and the first half of 2015 were markedly noted for tie-ups between local and foreign firms. In a standout market development, among various others, US firm Morgan Lewis merged with local outfit Stamford Law Corporation to form Morgan Lewis Stamford LLC.