Singapore is one of the most developed economies in the world. At the base of this economy are the trading activities Singapore has with numerous countries. Singapore is considered to have the most open and pro-business economy in the world. Singapore is also known as a territory with very low tax rates. Singapore is a very attractive destination for foreign businessmen due to its investment climate and political stability, but it also represents an important foreign direct investment source for other countries.
Singapore is the 14th biggest exporter worldwide, but also the 15th biggest importer in the world. According to the World Trade Organization, Singapore has the highest trade to GDP (Gross Domestic Product) ratio of 407.9% among all countries in the world.
Our company formation specialists in Singapore can assist foreign investors interested in setting up trading companies in the city-state.
The trading industry in Singapore
Foreign investors interested in setting up a business in one of the largest and most prolific economic sectors of Singapore are advised to try the trading industry. Singapore is an international trading hub, as well as one of the friendliest countries in the world in terms of trading regulations.
Singapore is known for exporting various goods manufactured by local companies, among which the most appreciated are:
- – machinery and equipment, such as electronics and industrial appliances;
- – household products which range from textiles to various house appliances;
- – agricultural products, beverages, and foodstuff, as well as raw materials;
- – transport equipment and machinery, but also auto vehicles spare parts.
The regulations related to importing and exporting such products vary, however, if you are a foreign business and want to open a company in Singapore, our local consultants can advise you.
Singapore’s exports
As mentioned above, Singapore is one of the largest exporters in the world and its main trading partners are China, Malaysia, Indonesia, Hong Kong, and Australia. As a percentage, 14% of Singapore ’s exports go to China, Malaysia, and Indonesia import 12% each from companies in Singapore, as for Hong Kong and Australia, represent 7,5%, respectively 6% of the territory’s total exports. Other countries Singapore exports to are the United States, India, Japan and in Europe Singapore exports its products mostly in Germany, Belgium, the United Kingdom, and the Netherlands. When it comes to exported goods, on the top of Singapore’s list is refined petroleum that represents approximately 30% of all exported goods. Singapore also exports computers and computer spare parts, packaged medicines, and gold.
Imports in Singapore
It is a well-known fact that most Singapore imports are destined for re-export. On top of Singapore’s import list is petroleum that represents 35% of its total imports, followed by computer and computer spare parts that represent 10%. Singapore imports petroleum gas in smaller amounts. Singapore companies also import broadcasting equipment and office machinery. Most part of imported products by Singapore come from China and Malaysia and represent about 20% of the city’s total imports. Other trade partners are South Korea, Japan, and India in the Middle-East, but Singapore also imports from the United States, the UAE and Germany. In smaller percentages Singapore imports from other European countries such as Switzerland, France, and the United Kingdom.
Import and export procedures – explained by our experts in opening companies in Singapore
The number of trading companies in Singapore has increased significantly due to the development of the Republic as a trading hub in Southeast Asia. In order to be allowed to import and export goods in, respectively out of Singapore, a trading company must apply for an IN Permit and an OUT Permit. These permits are issued by Singapore Customs and in order to obtain one, several steps must be followed:
- – the company must obtain a Unique Entity Number (UEN) and open a customs account;
- – the company must also open an Inter-bank GIRO account;
- – apply for the import or export permit.
All companies involved in the import and export of goods in Singapore must be registered for GST (Goods and Services Tax). Additionally, companies must check in the types of products to be imported or exported fall under the category of controlled goods. Our company formation consultants can offer more information on the licensing of trading companies. They can also assist businessmen who want to open a company in Singapore.
Opening a trading company in Singapore
Both local and foreign entrepreneurs are allowed to open companies in the import-export sector in Singapore. These can operate as companies which import or export products, or as trading companies which engage in both types of activities.
In order to open a trading company as a foreign investor in Singapore, the businessman will need to apply for a work permit and then start the company registration procedure. One will need to have a local address for the company and have the documents required for the Singapore company formation procedures drafted, notarized and filed with the Accounting and Corporate Regulatory Authority (ACRA).
As a trading company, the Singapore business will also need to register with the Customs Authorities in the city-state. Obtaining a GST number is mandatory in order to register with the Customs in Singapore.
The trading company can operate in Singapore or in one of its free zones where certain customs duties apply for the import, export, and warehousing of certain products.
It must be noted that apart from the regular import and export licenses, there are certain categories of goods which require additional permits, based on the specific regulations applied by the Singapore Customs. These are called controlled goods. Among these products are:
- – high-tech products;
- – firearms;
- – foodstuff.
Foreign investors who want to set up trading companies in Singapore are invited to reach out to our local representatives for information and guidance. We can help them set up private limited companies in Singapore or any other type of company available for incorporation in this city-state.
Import and export incentives in Singapore
In order to encourage the trading industry, Singapore has enabled several incentives companies operating in the city-state on in one of its free zones may benefit from. Among these are:
- – the Licensed Warehouse Scheme Type 1;
- – the Licensed Warehouse Scheme Type 2;
- – the Zero-GST Warehouse Scheme;
- – the Temporary Import Scheme;
- – the Industrial Exemption Factory Scheme.
Our company formation agents in Singapore can provide you details about the incentives available for the trading industry and can also help you in registering your company. For assistance in opening a company in Singapore, please contact us.