If you're intending to set up an import or export business, Singapore will be the perfect launchpad for your company. By the way, we can help you register your company online within a day. Drop us a chat!
Reasons to choose Singapore to set up an import or export company
Other than her ideal geographical location that oversees a huge amount of trade between the East and the West, here are some other reasons why you should choose Singapore to set up your import or export company:
Low barrier to entry
Singapore adopts a liberal stance towards import and export and allows businesses to set up their companies easily. Furthermore, bureaucratic obstacles are also minimal, resulting in Singapore coming in second in the Ease of Doing Business global rankings. Additionally, registering a company for trading purposes is fuss-free and procedures can be done online with a minimum capital of just S$1, so you can easily set up your business.
Attractive tax system
You can look forward to competitive income tax rates for companies and individuals, at 17 percent and 22 percent respectively. In the latter situation, most individuals pay a significantly lower tax below the 22 percent cap. In addition, various tax relief schemes are made available. Double taxation is also eliminated following Singapore's conclusion of over 70 avoidance of double taxation agreements.
5 Steps to set up import or export company
Once you've decided to set up an import or export company in Singapore to benefit from the above advantages, here's what you need to proceed.
You will have to register your business in Singapore and choose from a business structure -- sole proprietorships, partnerships, limited partnerships (LP), limited liability partnerships (LLP), and limited liability companies. A private limited company is the most common and flexible option, most businesses would opt for this entity.
This process might seem daunting, but you can always trust us at Osome to handle the procedure for you. Most of our clients opt for private limited companies, since this entity meets most entrepreneurs' needs with its fast procedure.
A private limited company registration can be done through the Accounting and Corporate Regulatory Authority (ACRA) via BizFile+, with the following key requirements:
- At least one shareholder, who can be an individual or a corporate body
- One resident director, who may be a Singaporean citizen, permanent resident, EP holder or Dependent Pass holder
- One resident company secretary
- Initial paid-up share capital of at least S$1
- A physical office address in Singapore
When the company is successfully incorporated, you will receive an email from ACRA which includes the company's Unique Entity Number (UEN) -- the standard identification number issued to any registered business entity in Singapore.
Activate your Singapore Customs Account
First things first - activate your company’s Customs Account so your company can conduct any import or export trading. Fret not, activation is free and does not incur any extra costs.
To activate, simply head to the Singapore Customs' Customs Account portal to submit an application. You will need a valid UEN for this process. Make sure to include a primary and secondary contact person in your application, so this person can receive all correspondence from the Singapore Customs. You will receive the outcome of the application within 4 working hours.
Check if your goods are controlled
Some goods including medicine and food products are considered "controlled" goods, which means that the import and export are subject to additional regulations by the relevant authorities. Other examples of controlled goods include:
- Toy guns, or replicas
- Helmets intended for military combat protection
- Toy or replica explosives, ammunitions, grenades or improvised explosive devices
- Pieces of clothing meant to protect against attack, including bulletproof vests
Elizabeth has the intention to import or export food products. Her products are subject to the Singapore Food Agency's rules and regulations on the kind of food that can be imported or exported. After scrutinisation, Elizabeth was issued a license from the agency, since her food products have met the criteria.
Check if your goods are considered strategic
Strategic goods factor in technology and goods that are intended to be used as tools of mass destruction. To export such goods, you need to apply for a Strategic Goods Control Permit via the TradeNet system.
Examples of strategic goods include:
- Bombs, grenades, torpedoes, smoke canisters, mines, rockets, missiles, depth charges, demolition‑devices, demolition‑charges, “pyrotechnic” devices, demolition‑kits, simulators and cartridges specially designed for military use
- Equipment specially designed for military use
Apply for licenses and permit
After the activation of your Customs Account, the next step will be to apply for a Customs Import Permit or a Customs Export Permit with the Singapore Customs. This permit is needed for the import or export of all goods.
These permit applications can only be done through Declaring Agents, an entity acting on behalf of the trading company to apply for a permit. You may appoint a Declaring Agent to apply on your behalf for a service fee, typically at S$2.88 per application. You can also register yourself as a Declaring Agent to submit your own permit application. However, you will be subject to a strict set of criteria to assess your suitability as a Declaring Agent.
The application can be applied through the Singapore Customs’ TradeNet system. Upon approval, you can start your import or export business. Take note of your permit’s validity period, which is decided based on various considerations including the type of goods involved and the place of release and/or receipt.
What to consider when importing goods to Singapore
The transportation of goods into the state's customs territory is defined as importation under the Singapore legislation, with the exception of goods in transit by any means from any place for the purpose of the importer's use or use of another individual.
Before you can get started on importing goods, make sure you’ve done the following 3 things:
Set up an inter-bank GIRO account
Register and maintain an inter-bank GIRO (IB) account so you can directly pay duties, fees, taxes and other charges from your account to the Singapore Customs' services. The IBG application is submitted to the Singapore Customs department. Upon acquiring the IBG, the government may or may not require you or your declaring agent to provide financial security as an importer.
Declare financial security
You may require a security for the importation of goods that consists of temporary import of goods for approved purposes, dutiable goods, and operation of licensed places such as excised factories and licensed warehouses.
In these cases, a Finance Company Guarantee, a Banker's Guarantee or an Insurance Bond may be used. The amount of finance security required is determined by the type of goods and trade movement, and other situations will also be assessed on a case-by-case basis.
Get documents ready for customs clearance
One last step before your company can start importing! Follow up with cargo clearance after obtaining your necessary permits. Take note that the documents have to be submitted at an entry point, with the following:
- Main document of the approved customs permit in printed copy
- Supporting documents which may include the packing list, invoice, air waybill or bill of landing
The documents have to be kept for five years from the date of permit approval.
What to consider when exporting goods from Singapore
To get started on exporting goods from Singapore, you have to declare the goods to Singapore Customs.
Here’s how to declare:
If your company has goods transiting through Singapore
Register as a Declaring and Transhipment Agent with ACRA after you have activated your Customs Account. If your application is successful, you will be notified and proceed with a transhipment permit. Similar to the procedure of importing or exporting goods, you will need to check if your goods are controlled and furnish financial security. You may then proceed to apply for Customs Transhipment Permit and prepare documents for cargo clearance.
If your company does not have goods not transiting through Singapore
Only the import, export or transit procedures fall under the jurisdiction of Singapore's trade and relevant customs legislation, in cases where goods are taken into, out, or via Singapore's territory. However, when your incorporated company based in Singapore has the intention to engage in overseas trade or transit goods through another state's territory, these will be regulated by the respective place's legislation.
If you intend to buy and sell goods overseas regularly, the country's laws will require you to register with them. You can choose from the options of incorporating a subsidiary company, through a representative office or other legal forms. Take note to check that you adhere with the country's tax, corporate legislation and national customs.
GST & duty
Goods and Services Tax (GST) and duty must be paid for the importation of dutiable and non-dutiable goods into Singapore for domestic consumption. However, GST and duty will not be levied on goods exporting from or transiting through Singapore.
Storage of goods
When it comes to storing goods, you can choose to keep them at Licensed Warehouses, Zero-GST Warehouses or Free Trade Zone Warehouses.
If financial considerations is a factor when setting up your import or export company in Singapore, fret not for there is always help offered by the government and various schemes. Consider a corporate bank account, corporate loans, Letter of Credit, the Global Trader Programme or Trade Credit Insurance Scheme (TCIS).
To set up an import and export company you would have to incorporate your company and apply for the relevant permits and licences for the goods you are importing and exporting.
If you’re ready to start, don’t baulk at the amount of paperwork involved. We’re here to help. With a paid-up capital of as low as S$1, registering a company in Singapore is easy. Leave it to our experienced corporate secretaries to manage the formation online.