Singapore’s May 3 Election: Implications for Foreign Investors

Singapore’s upcoming general election on May 3, 2025, is poised to shape the direction of the city-state’s political and economic landscape. It will serve as a key test for Prime Minister Lawrence Wong, who succeeded Lee Hsien Loong in 2024.

The outcome could shape how the next government prioritizes economic challenges, responds to global trade pressures, and calibrates its approach to regulation, even as the core fundamentals that attract foreign investment remain firmly in place.

Political parties contesting the 2025 election

A range of political parties is vying for seats in Parliament. While the People’s Action Party (PAP) has governed Singapore since 1959, recent elections have shown increased support for the opposition.

People’s Action Party

The incumbent PAP, now led by Lawrence Wong, is campaigning on a platform of continuity, experience, and proven governance. The party has framed its appeal around Singapore’s need for strong leadership amid global uncertainties.

Workers’ Party (WP)

The WP remains the strongest opposition force and is campaigning for more transparency, affordable housing, and healthcare system expansion. It has made significant gains in recent elections and seeks to expand its parliamentary footprint.

Progress Singapore Party (PSP)

Founded by former PAP member Tan Cheng Bock, the PSP positions itself as a centrist alternative focused on accountability and safeguarding Singaporean identity.

Singapore Democratic Party (SDP)

Led by Chee Soon Juan, the SDP emphasizes progressive taxation, minimum wage policies, and civil liberties.

Other parties, including the Singapore People’s Party (SPP), National Solidarity Party (NSP), and Red Dot United (RDU), are also contesting in selected constituencies.

A Look Back: The 2020 General Election

In the 2020 general election, the People’s Action Party retained power but with its lowest vote share since independence — 61.2 percent. The Workers’ Party made historic gains by winning 10 seats, including retaining Aljunied GRC and capturing the newly formed Sengkang GRC. The Progress Singapore Party, although not winning any seats, received strong support and was offered Non-Constituency MP (NCMP) roles.

The 2020 election signaled a growing desire among Singaporeans, especially younger voters, for more political diversity and accountability. Key issues at the time included job security during the COVID-19 pandemic, the cost of living, and transparency in governance. These sentiments have continued into the 2025 election cycle and may influence how voters perceive party platforms this time around.

Key issues influencing voter sentiment

Cost of living

Rising living costs remain the top concern for voters. Despite cash transfers and rebates, many Singaporeans feel squeezed by inflation in housing, food, and transport.

Housing affordability

The high cost of both public and private housing, especially for young Singaporeans, is prompting calls for deeper reforms and increased supply.

Employment and foreign talent

While Singapore’s unemployment rate remains low, there is sensitivity around the balance between foreign talent and local job opportunities. Parties are proposing differing views on Employment Pass (EP) policies and local hiring priorities.

Healthcare system capacity

An aging population and limited healthcare capacity have become increasingly urgent issues. The WP, for instance, proposes a significant expansion in public hospital beds.

Political representation

Younger voters are increasingly advocating for greater political diversity, transparency, and civil liberties. This could influence voting outcomes in key constituencies.

Trade Policy Watch: U.S. Tariff Threats Add Pressure to Singapore’s Election Landscape

In April 2025, the United States implemented a 10 percent universal tariff on imports from all countries, including Singapore. This was part of a broader shift in U.S. trade policy under President Trump, aimed at addressing trade imbalances. The tariffs target a wide range of sectors, including high-tech and value-added exports such as electronics and chemicals.

Singapore’s government has responded by forming a national task force to support affected businesses and workers. Prime Minister Lawrence Wong has expressed concern that such measures may accelerate global economic fragmentation.

How the next government responds will be critical. A newly elected Parliament, whether dominated by the PAP or more balanced with opposition voices, will need to signal how Singapore intends to manage external economic threats. Investors will be watching for trade diversification strategies, bilateral responses, and alignment with regional partners like ASEAN and China.

Implications for foreign investors

Foreign investors should be aware that while Singapore’s regulatory stability is unlikely to be disrupted, the tone and focus of policy may adjust slightly depending on the election results.

However, no major political party has indicated plans to reverse Singapore’s core pro-investment policies. Opposition parties, such as the Workers’ Party, Progress Singapore Party, and Singapore Democratic Party, have instead focused their platforms on social equity and cost-of-living concerns. Their proposals — ranging from tax relief for essential goods to redundancy insurance and minimum living wage — seek to address domestic issues while preserving Singapore’s status as a competitive, investor-friendly economy. Most parties, including opposition ones, broadly support maintaining Singapore’s competitive economic environment.

The election may still shape investor sentiment, as financial institutions and multinational firms monitor political signals closely. Even minor shifts in workforce policies, infrastructure priorities, or regulatory tone could influence specific sector planning. Additionally, foreign investors should assess how the next administration positions Singapore amid rising global protectionism, particularly considering recently imposed U.S. tariffs.

Regardless of the election outcome, Singapore is expected to remain a highly attractive destination for foreign direct investment. The country’s fundamentals — including a stable legal system, low corruption, world-class infrastructure, competitive tax regime, and strong government institutions — provide enduring confidence to investors. These structural advantages will likely outlast short-term political shifts or changes in parliamentary composition.

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