Why Choose Singapore for an Import-Export Company?

There are several reasons for Singapore’s emergence as a perfect destination for setting up an import-export company: Favorable geographical location; Reliable infrastructure; Attractive tax regime; Stable financial system; Low level of corruption; Skilled manpower

Where to Store Goods in Singapore?

In Singapore, you can store your import-export company goods in: Free-trade zone warehouses: Zero-GST warehouses; Licensed warehouses.

What are the best company structure for import-export company in Singapore?

The most suitable company structure for a trading (import-export) company in Singapore is a private limited company (Pte Ltd).

How to Start an Import-Export Business in Singapore

If you’re wondering how to start an import-export business, you should consider taking advantage of the benefits Singapore has to offer. The process of starting an import-export business can be relatively quick and easy, but it’s essential to understand all applicable regulations and required permits to remain in compliance with Singapore law.

The simplest way to start an import-export company in Singapore is to work with a corporate service provider. You are welcome to read more about the most efficient way to start an import-export business in Singapore.

Introduction to starting an import-export business
Why is Singapore a major trading hub?
Starting an import-export business in Singapore
Regulations on import and export of goods from Singapore
Regulations on import and export of goods transiting through Singapore
Regulations on import and export of goods NOT transiting through Singapore
GST and duty
Storing goods
Financial considerations
How we can help

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Introduction to Starting an Import-Export Business

Singapore is a world-class player in global commerce. It’s strategically located in the heart of Southeast Asia and] boasts extensive air and sea links that facilitate inter-regional and global trade. Thanks to these advantages, it has emerged as a major trade hub in the global supply chain.

Singapore now ranks as the No. 14 largest exporter and the No. 15 largest importer in the world. Therefore, if you’re trying to determine how to start an import-export business, Singapore is an excellent jurisdiction for incorporating your venture.

Why Is Singapore a Major Trading Hub?

There are several reasons for Singapore’s emergence as a key trading center, including:

Singapore has one of the best infrastructures among the world’s top cities according to the Mercer Quality of Living study. This small state operates a network of 3,122 kilometers (i.e., 1,940 miles) of highways.Business-friendly regulations. The country is ranked second in the Ease of Doing Business global rankings. Singapore’s liberal attitude towards the import and export of goods, ease of company setup, and minimal bureaucratic hurdles contribute to this ranking.

These factors have attracted nearly 70% of the world’s largest commodity trading companies (such as Vitol, Wilmar International, Golden Agri-Resources and more) that generate more than US$1 trillion annual turnover from their Singapore operations.

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help starting import-export company in singapore

Starting an Import-Export Business in Singapore

If you’re wondering how to start an import-export business, you should first register your company in Singapore. The company registrar in Singapore is called Accounting and Corporate Regulatory Authority (ACRA), which is the national regulator of business entities in Singapore.

The most suitable company structure for a trading enterprise is a private limited company. Foreigners are required to work with a Singapore-based corporate services provider, such as CorporateServices.com to incorporate their companies.

The requirements for registering a private limited company include:

requiremnts for import-export company in singapore

1

A company may have 1 to 50 shareholders — local or foreign persons. Shareholders can be individuals or corporate entities.

2

The minimum paid-up capital is just S$1, which can be increased at any time.

3

A company must have at least one Singapore-resident director.

4

A company must appoint a Singapore-resident company secretary.

5

A company is required to have a local registered address.

6

The company name must be approved before proceeding with the registration process.

7

Once the company is incorporated, it will receive a unique entity number (UEN), which is a standard and unique identification number for each Singapore entity. All government agencies identify a company by its UEN, making it easy for intra-agency communication and integration.

Regulations on Import and Export of Goods from Singapore

Once your venture is registered and has obtained a UEN, you may commence trading activities. Be aware that your import and export business must follow the relevant import or export regulations described below to be in compliance with Singapore law.

Importing goods into Singapore

Singapore legislation defines importation as bringing goods into the customs territory of the state (except goods that are in transit) by any means, from any place (including a free-trade zone) for the importer’s own use or the use of another person. To carry out any import activities, you must obtain the necessary permits by following the steps below

To pay duties, taxes, fees, and other charges on the services provided by Singapore Customs, you need to register and maintain an Inter-Bank GIRO (IBG) account. Such an account allows you to make payments directly from your bank account to Singapore Customs. The application for the IBG is submitted to the Customs Department. Again, you can contact a corporate service provider to provide this service for you.

In certain cases, after obtaining the IBG, the government may require you or your declaring agent (DA) to provide financial security. A declaring agent is a сompany that makes an application for a permit, certificate, licence, or form of approval on behalf of an importer (including where an importer is concurrently registered as that DA).

A security is required when any of the import of goods involve:

Dutiable goods
The temporary import of goods for approved purposes
Operating licensed premises such as licensed warehouses and excise factories

A Banker’s Guarantee, Finance Company Guarantee, or an Insurance Bond may be used for this purpose. The amount of security required for a permit application depends on the type of goods and their trade movements; you can find these details on the Customs website. Customs may also require security to be furnished for situations not mentioned above or vary the amount on a case-by-case assessment.

You’ll need a customs permit to import the goods. As an importer, you may register yourself as a declaring agent or appoint a declaring agent to act on your behalf. Permit applications are submitted by the declaring agent online through the TradeNet online system and can be submitted by your corporate service provider.

However, Singapore legislation defines certain goods as controlled goods. These require an additional permit from competent authorities (CAs) before they may be imported into Singapore. In each case you should apply to the relevant CA. A non-exhaustive list of such goods and relevant CAs appears below.

Item	Competent Authority
Animals, birds and their by-products Endangered species of wildlife Ornamental fish Plants	National Parks Board
Fish and seafood products Fruit and vegetables Meat and meat products	Singapore Food Agency
Arms and explosives Bulletproof clothing Toy guns, pistols and revolvers Weapons, kris, spears and swords	Licensing Division Singapore Police Force
CD-ROMs and video games Films, videotapes, videodiscs and laser discs Newspapers, books and magazines Pre-recorded cartridges and cassettes Telecommunication and radio communication equipment Toy walkie-talkies	Infocomm Media Development Authority
Medicines Pharmaceuticals Poisons	Health Sciences Authority
Dangerous cargo	Singapore Customs
Ionising Radiation (IR) irradiating apparatus & radioactive material (e.g. x-ray equipment) Non-Ionising Radiation irradiating apparatus (e.g. ultraviolet sun lamps)	National Environment Agency

After you’ve obtained the necessary permits, the last step is cargo clearance. The appropriate documents must be submitted at an entry point. The main document is a printed copy of the approved customs permit. Supporting documents may include the invoice, packing list, and the bill of lading or air waybill.

These documents must be preserved for five years from the date of customs permit approval in either physical or digital form.

Take note that there are certain categories of goods — such as weapons, nuclear materials, obscene materials, reproductions of copyrighted materials, etc. — that are prohibited and may not be brought into or out of Singapore in any case. See the full list in the Regulation of Imports and Exports Regulations.

Exporting goods

Singapore legislation defines export as taking goods out of the customs territory of the state — except trans-shipped goods or goods in transit — by any means, to any place, including a free trade zone. The procedure for fulfilling export requirements is similar to that for importing goods. You should follow the steps described below.

Your company must acquire a customs permit to export goods. You may register yourself as a declaring agent or appoint a declaring agent to act on your behalf. The appropriate permit applications must be submitted online through the TradeNet system. Again, contact your corporate service provider to assist with these tasks.

When importing goods, additional permits or licenses from the respective competent authorities (CAs) are required to export controlled or strategic goods.

Controlled goods

Below are some examples of controlled goods and the relevant competent authorities where you may get the necessary permit:

Item	Competent Authority
Animals, birds and their by-products Endangered species of wildlife Ornamental fish Plants	National Parks Board
Fish and seafood products Fruit and vegetables Meat and meat products	Singapore Food Agency
Arms and explosives Bulletproof clothing Toy guns, pistols and revolvers Weapons, kris, spears and swords	Licensing Division Singapore Police Force
CD-ROMs and video games Films, videotapes, videodiscs and laser discs Newspapers, books and magazines Pre-recorded cartridges and cassettes Telecommunication and radio communication equipment Toy walkie-talkies	Infocomm Media Development Authority
Medicines Pharmaceuticals Poisons	Health Sciences Authority
Dangerous cargo	Singapore Customs
Ionising Radiation (IR) irradiating apparatus & radioactive material (e.g. x-ray equipment) Non-Ionising Radiation irradiating apparatus (e.g. ultraviolet sun lamps)	National Environment Agency

Strategic goods
This category includes goods and technology that are intended or likely to be used as weapons of mass destruction. If you plan to export strategic goods, you will have to apply for a Strategic Goods Control Permit through the TradeNet system. You may find the full list in the Strategic Goods (Control) Order here.

Regulations on Import and Export of Goods Transiting Through Singapore

Singapore legislation defines transiting as bringing goods into Singapore from a place outside the country for the sole purpose of moving it to another state either by the same or another transport. The term “transhipment” is also used for this concept.

If your import-export business will engage in the transit of goods through its Singapore operations, it will be considered as a transhipment agent. Accordingly, you will be required to account for the movement of your goods while they are being transited through Singapore.

Please follow the six steps below to obtain the relevant permits and authorization from the relevant competent authorities.

The next step is to register with customs as a declaring agent for the export or import operations. In addition, your company must be registered as a transhipment agent. Additionally, your business must originally be registered with ACRA as a shipping agent, air cargo agent, or freight forwarder.

After Singapore Customs considers your applications for declaring and transhipment agent status, it will provide an email reply to inform you that your company is successfully registered as such an agent. Once the registration has been approved, your entity will be able to proceed to the next steps to submit applications for obtaining the main transiting document — the transhipment permit.

You must apply for the relevant transhipment permit where it is required. For instance, when transhipping goods from one free-trade zone (FTZ) to another FTZ, you need a Through Transhipment with Inter-Gateway Movement permit. When transhipping controlled goods within the same FTZ, you must apply for a Through Transhipment within the same FTZ permit. Each permit application typically costs S$2.88. You are welcome to find more details on this topic here.

Regulations on Import and Export of Goods NOT Transiting Through Singapore

Singapore’s trade and relevant customs legislation covers only issues of import, export, or transit procedures. These cases apply to situations where goods are brought into, out of, or through the territory of Singapore. When your Singapore-incorporated import-export business intends to trade abroad or transit goods through the territories of third states, these cases will be regulated by the legislation of those countries.

In most cases, when buying and selling goods abroad on a regular basis, the laws of a country where you operate will require you to register a business. You’ll usually have to choose between incorporating a subsidiary company, working through a representative office, or other legal form provided by the relevant national laws.

When planning to operate your import-export business activities abroad, you must make sure you are in line with the national customs, tax, and corporate legislation.

GST and Duty

Importing

Singapore duty and the goods and services tax (GST) must be paid for importing dutiable and non-dutiable goods into the state for domestic consumption. The GST is charged at the rate of 9% of the cost, insurance, and freight (CIF) value. GST is administered by the Inland Revenue Authority of Singapore (IRAS) and collected by Singapore Customs.

The import duty must be paid on imports of specific types of goods such as liquors, tobacco products, motor vehicles, and petroleum products. The rate is different for each type of goods.

Exporting and transit

Neither GST nor duty is levied when exporting from or transiting goods through Singapore.

The most convenient way is to pay duties and GST is through the GIRO system, mentioned above. It authorizes Singapore Customs to make direct deductions from your bank account.

Where to Store Goods?

Note that GST and duties payable for the goods are suspended while the goods are in warehouses and until the goods are removed from the premises and brought into the local market for consumption.

Financial Considerations

Corporate bank account for your Singapore import-export business

Opening a corporate account in a local bank is one of the essential aspects of your Singapore import-export company. This will ensure timely payment, access to world-class banking services for trade, and reliable savings of your funds.

Given the large number of commercial banks in Singapore, companies have many options to open an account. CorporateServices.com has created a panel of reliable partner banks — which includes DBS Bank, OCBC Bank, UOB, Standard Chartered, Citibank, HSBC — where you can open an account with ease. To learn more, read our article on opening a corporate bank account.

Business loans

Corporate loans are offered by most banks in Singapore. The most common types of business loans are:

Unsecured Business Term Loan: The lump sum is usually between $50,000 and $300,000, repayable via equal monthly installments from three to five years.
SME Micro Loan is a government assisted financing scheme for local SMEs. The maximum funding of $100,000 is available for companies with annual revenues less than $1M or with less than 10 employees.
SME Working Capital Loan is a government assisted financing scheme from Spring Singapore that launched June 2016. Up to $300,000 financing for Singapore SMEs is available.

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Letter of credit

In Singapore, a letter of credit (LC) is a common practice. This is a banking service where a buyer’s bank guarantees that payment to a seller will be received on time and for the correct amount. In the event the buyer is unable to make payment, the bank is required to cover the full or remaining amount of the purchase. This eliminates the risk of nonpayment against delivery for the seller and risk of nondelivery against payment for the buyer.

Global Trader Programme for Import-Export Businesses

A very attractive option for your import-export company to decrease its tax burden is the Global Trader Programme (GTP). The GTP provides a reduced corporate tax rate of 5% or 10% on qualifying trading income for three or five years. Qualifying trading income includes income from physical trading, brokering of physical trades, and derivative trading income.

Trade Credit Insurance Scheme (TCIS)

Trade Credit Insurance (TCI) is an insurance protection that your import-export business can purchase to protect itself against nonpayment from buyers, allowing you to acquire new customers with greater confidence and reduced default risk.

If your company qualifies, the government can support up to 50% of the minimum insurance premium for TCI policies that are provided commercially by Singapore-registered credit insurers. This is subject to a maximum lifetime support of S$100,000 per company.

Your venture qualifies if your import-export business:

Is registered and physically present in Singapore (i.e., incorporated in Singapore with the ACRA;)Has a minimum of 30% local shareholding
Has maximum group employment of 200 employees or maximum group revenue of S$100M

How Can We Help?

Incorporating your venture in Singapore is a sensible strategy for an import-export business. The procedure is transparent, cheap, and clear. If your Singapore-incorporated сompany decides to start importing to or exporting from Singapore for commercial purposes, you’re required to apply for permits or licenses from the appropriate competent authorities and follow the procedures described above.

Obtaining such documents can be simple and fast, allowing your company to enjoy the numerous governmental programs that support import-export business.

If you’re thinking of starting an import-export business, contact CorporateServices.com to learn more. Your account executive will make the process as easy as possible and obtain any import or export permits you need to start trading — while taking advantage of the benefits and attractive tax laws Singapore has to offer.

how we can help setting up an import-export trading company in Singapore

The challenge we faced was finding a partner who could add the value and benefits of an easy-to-use online platform but couple it with the provision of astute guidance about the most efficient company setup structure. We found the online platform very simple, very easy-to-use, and backed up with very effective messaging tools to ask and receive timely guidance. On top of this, if you need to send a simple email or schedule a call outside of the system, the response rate has been very impressive. I would not hesitate in recommending the friendly team at Corporate Services to anyone looking to set up a venture in Singapore.

ROGER SMART, TIGER PARTNERS (SG) PTE. LTD.