US firms remain committed to Singapore, but rising costs could affect future investment: AmCham CEO
Dr Lei Hsien-Hsien, CEO of the American Chamber of Commerce in Singapore, tells CNA that artificial intelligence and hiring challenges are also reshaping how companies decide where to invest.
American Chamber of Commerce in Singapore CEO Lei Hsien-Hsien speaking to CNA in an interview.
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SINGAPORE: American companies remain committed to Singapore despite rising business costs, but more needs to be done to ensure the country continues to attract investment, said the CEO of the American Chamber of Commerce in Singapore (AmCham).
In an interview with CNA, Dr Lei Hsien-Hsien said high operating costs, hiring challenges and the rapid adoption of artificial intelligence are prompting companies to rethink where they invest and locate teams across the region.
Dr Lei added: “I think the cost of doing business (in Singapore) has been quite challenging in some ways; even though talent is very strong here, they do command a higher salary, which means that some jobs are going overseas to other countries.”
According to AmCham’s 2025 Manpower Survey, employers hiring entry-level talent find it challenging to recruit local candidates with the necessary technical skills, as well as realistic salary and promotion expectations.
But Dr Lei noted that businesses continue to balance the costs of operating here against the benefits it offers, including the country’s connectivity to the region.
“The Singapore commitment is here. I think that there’s some work to do to make sure that it is cost-effective and efficient and productive to continue to bring your company to Singapore and think about Singapore also as a gateway to the rest of the region.”
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GROWING UNCERTAINTY OVER AI
Dr Lei said AI has prompted companies to focus more closely on productivity and efficiency, while hybrid and remote working have also influenced decisions on where employees should be based.
“How many people do they want to put in Singapore? How many people will they move to other locations? That’s where the investment quantum changes, and the distribution of investment changes,” she said.
While AI promises productivity gains, it is also creating fresh uncertainty for businesses.
Governments are taking different approaches to regulating the technology, from introducing new rules governing its use to tightening controls on exports of advanced AI technologies.
For example, the European Union has begun implementing its AI Act – the world’s first comprehensive legislation governing AI – while the US has tightened export controls on advanced AI chips on national security grounds.
Mr Steven Okun, CEO of public affairs consultancy APAC Advisors, said companies are preparing for a range of possible outcomes.
“We don’t know what’s going to happen with AI from a risk scenario perspective. You could see one world where AI remains as it is today – available and affordable,” he said.
“You could see AI also under a different scenario – where it becomes much more expensive and becomes limited, and that could be because of a political backlash, and that governments need to do something because too many of their citizens are losing jobs, or that inequality is increasing.”
“You have sovereign risk on AI. Are countries going to not allow AI to be used outside of their borders? That could be a large risk,” he added.
SINGAPORE STILL A PREFERRED REGIONAL HUB
Despite the challenges, Dr Lei said AmCham has not observed companies moving out of Singapore because of higher business costs.
Dr Lei said the country’s support for innovation and regional connectivity continue to make it an attractive business hub, adding that many companies also cite Singapore’s appeal to senior executives as a factor in keeping their regional headquarters here.
Mr Okun said Singapore’s competitive advantage lies in the certainty it offers businesses rather than lower costs.
“Singapore competes on certainty; it doesn’t compete on cheap. It doesn’t compete on cost; it competes on its strengths.
“What does Singapore have that a lot of countries that it competes with do not have? Rule of law, enforceable contracts, no corruption. You have infrastructure that works.
“Businesses very well recognise that they are willing to pay more to be in a place like Singapore,” he added.
LONG-TERM INVESTMENT OUTLOOK
Beyond costs, companies are also navigating an increasingly uncertain global business environment, including changing regulations and geopolitical tensions.
“It would be far easier to do business across borders if we had some way to predict the regulations that surround certain industries,” said Dr Lei.
She said companies are also considering how trade agreements and other policy developments influence investment decisions.
“We’ve had trade agreements that either worked or didn’t work, conversations about which countries businesses should be setting up in. How do they prioritise?” she said.
“Overall, our member companies are telling us they are here in Singapore. They believe in the region. They will continue to invest. The question is, are they going to invest as much as they thought they would a few years back?”
Source: CNA/mp(ca)
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