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
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?
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:
Regulations on Import and Export of Goods from Singapore
Importing goods into Singapore
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.
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
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 7%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?
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.
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.
Letter of credit
Global Trader Programme for Import-Export Businesses
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.
ROGER SMART, TIGER PARTNERS (SG) PTE. LTD.