Overview:
Known for its ease of doing business, global business outlook, and strategic geographic location connecting Eastern and Western shipping ways, Singapore is a hospitable nation for foreign traders with connections to more than 600 ports spanning over 120 countries. In conformity with Singapore’s reputation for its business-friendly and transparent regulatory environment, import and export procedures in the country are simple, efficient and straightforward. Applying and receiving the requisite permits and licenses can be done hassle-free with a third party PR service consultant who can also aid in trading business growth and prosperity by providing expert accounting services.
BENEFITS OF SETTING UP A TRADING COMPANY IN SINGAPORE
Singapore today is one of the most lucrative import-export business destinations globally and not without reasons. The flourishing trade and business opportunities are generally attributed to several reasons that can attract and motivate you to set up an import-export company in Singapore for global trading. Almost 70 per cent of all reputed global trading houses have their presence in this island city-state.
1. Strategic Location
Centrally located, this South Asian nation acts as the gateway between the East and the west and notably 30 per cent of all Asian trading worth trillions of USD takes place through Singapore.
2. World Class Infrastructure Facilities
The port of Singapore takes pride in one of the best infrastructures in the world that can support the demands of the world’s busiest and largest container and bunkering port for shipping and trade. Singapore's land infrastructure is equally impressive with good roads, transport and airports facilities like Changi linking 300 cities in 70 countries and the country ranking 5th in the world and 1st in Asia in the World Bank's Logistics Performance Index. The country also has a nationwide electronic data interchange facility.
3. Ease of Doing Business
Singapore ranked second in the World Bank's "Ease of Doing Business" rankings 2020 with its business-friendly strategy of easy company setup and a liberal import and export regulations.
4. Attractive Corporate Tax System
Singapore has very competitive income tax rates both for corporates and individuals at 17 and 22 per cent respectively. Additionally, it also offers several tax incentives and has Double Taxation Avoidance Agreements with more than 70 countries further simplifying global trade.
5. Absence of Corruption and Bureaucracy
Singapore is a rule-based country with a high degree of transparency and no bureaucracy in business systems. It also ranks 1st in Asia and 7th in the global anti-corruption index.
6. Skilled Human Resources
The Singapore government supports human capital development and continuously promotes the HR Industry Manpower plans. The nation has a high literacy rate with more than 50 per cent of the workforce having higher education degrees. Singapore employs more than 14,000 people in the Commodities sector and has the 4th largest pool of trading talents in the world. http://www.skillsfuture.sg/
7. Socio-Economic Stability and Security Singapore is committed to providing the highest level of safety and security to its business community and is well integrated into the mainstream global economy and business. As one of the best international financial hubs with more than 500 financial institutions, the nation provides for almost 30 per cent of commodities trade finance in Asia.
8. TradeNet Facility TradeNet, launched in 1989 is the world’s first national single window for trade integrating import, export and transhipment documentation processing procedures and facilitating fulfilment of trade formalities of trade and logistics communities.
NINE STEPS FOR SETTING UP A TRADING COMPANY IN SINGAPORE
1. Incorporating the Company
For starting a trading business, you must register your Singapore company first with the company registrar in Singapore, Accounting and Corporate Regulatory Authority (ACRA) which is the national regulator of business entities in Singapore. The import-export company registration procedure is similar to incorporating any other company. The most common form for a trading enterprise is a private limited company. To incorporate an Import Export company, foreigners are usually advised and required to work with a company secretary services Singapore.
2. Reviewing Controlled Goods
Before initiating the import and export processes, it is advocated to review the products for any classification under controlled goods category subject to restrictions by relevant Singapore regulatory authorities. Some goods such as medicine and food products are considered controlled goods and in such cases, the relevant competent authority will be listed next to the HS code, Harmonized Commodity Description of the goods on the Singapore Customs’ database. If you are in doubt and not sure how good is classified, you must apply for an official classification ruling for use in Singapore.
3. Reviewing Strategic Goods
Goods and technology that meet the technical specifications described in the Strategic Goods Control List are subject to controls under the Strategic Goods (Control) Act (SGCA). The Strategic Goods Control List is found in The Schedule to the Strategic Goods (Control) Order 2020 and includes items from the four multilateral export control regimes – Australia Group, Missile Technology Control Regime, Nuclear Suppliers Group and Wassenaar Arrangement. You must double-check if goods fall under the Strategic Goods category and need additional regulations from appropriate authorities as per Strategic Goods order, 2020.
4. Activating Customs Account
Once you have critically reviewed the goods for your import-export business activities, You must activate your Customs Account so that you can transact with Singapore Customs. You can sign up to receive free notification alerts whenever permit applications containing your entity's Unique Entity Number (UEN) in the Importer/Exporter fields are approved by TradeNet®. You can also update or terminate your entity's Customs Account and your particulars via this service. A Key Personnel can also use this service to authorise the staff of the entity (known as Authorised Personnel) to access the Customs Account and Declaring Agent Account services. Once you have activated your Customs Account you can apply for a Declaring Agent (DA) Account to submit permit applications using their TradeNet® User ID. Existing DAs can update their particulars, renew or terminate their DA Account with their TradeNet user ID. It takes only 15 to 30 minutes to complete the Customs Account Activation application and doesn't cost you anything. You can use the following link as a guide for completing the application.
5. Applying for Customs Permits and Licenses
On completion of Customs Account Activation Process, you have to apply for a Customs Import Permit or a Customs Export Permit issued by Singapore Customs. This permit is applicable for all imported or exported goods. For obtaining customs import or export permit, you may register yourself as a declaring agent or appoint a declaring agent to act on your behalf. Permit applications are submitted online through the TradeNet system. For container cargos, the relevant container number and shipper seal number must be declared while applying for customs permit.
6. Applying for Inter-Bank GIRO Account
To pay duties, fees, GST and other charges from your account to the Singapore Customs' services directly you need to register and maintain an Inter-Bank GIRO account. The IBG form is directly submitted to the Singapore Customs department. Once you successfully register and maintain the IBG, the government may or may not require you or your declaring agent to provide financial security as an importer. You can make relevant GST and/or duty payments through the IBG once the customs import permit is approved. Based on the nature of goods e.g. Controlled and/ or Strategic Goods, you must apply for additional goods specific licenses from the Singapore government.
7. Furnishing Security
Security is needed for any undertaking involving goods subjected to duties as tobacco, liquor and motor vehicles, temporary import of goods for approved purposes, and the operation of licensed premises, including warehouses and excise factories. Bank guarantees, Finance Company guarantees and insurance bonds are acceptable forms of security. For security amounts and other details, you can visit the Singapore Customs page.
8. Authorizing Declaring Agent
The day following approval of the interbank GIRO (IBG) application or successful registration of your security with Singapore Customs, the Key Personnel of your entity whose particulars are registered with a Unique Entity Number (UEN) Issuance Agency such as Accounting and Corporate Regulatory Authority, Registry of Societies etc. or the Authorised Personnel of the entity may authorise your Declaring Agent to use
● Your IBG for the payment of duties and Goods and Services Tax for your customs permit
● Your Security for your permit applications.
Up to 20 Declaring Agents can be authorized and you can add or remove any DA. For more details, you may follow the given link.
9. Preparing Documents for Cargo Clearance
Before cargo clearance at entry points, several documents must be submitted to checkpoint officers and for both conventional cargo and container cargoes. Printed copies of the approved customs permit and supporting documents including invoice, packing list, and Bill of Lading or AirWays bill are needed for clearance. While importing container cargo by sea, the documents do not need to be presented on an immediate basis to checkpoint officers at the entry point. In most cases, all documents in connection with the import of goods must be kept for five years from the date of customs permit approval in either physical or digital form and must be presented to Singapore Customs upon request.
10. Registering Claimants
A Claimant registration is needed before a Claimant Organisation waivers can be granted the Goods and Services Tax (GST) relief and/or duty exemption. For more details, you can visit the following websites.
BOTTOMLINE
It is a very logical and strategic choice for an individual or a company to start a trading business in Singapore with many benefits accrued. You need to carefully judge the existing business scenario both from Singapore and global perspective along with your areas of expertise and accordingly choose your specific trading business.
