How to Set Up an Import and Export Company in Singapore

If you plan on setting up a trading company or starting an import and export business, Singapore will be an ideal launchpad for you. It has long been recognized as an important ‘port of call’ for traders, especially those dealing with eastern and western time zones. This article will guide you on starting a trading company, the requirements you have to meet, and other obligations you should consider if you wish to conduct import, export, or transit activities in Singapore.

Why setting up an import and export company in Singapore?

Here are several reasons you should choose Singapore to incorporate an import and export company.

Favorable geographic location

Singapore crosses a strategic sea lane through which a large amount of trade (worth nearly $5 trillion annually) flows between East and West. Nearly 30 percent of all Asian trade is conducted via Singapore.

Business-friendly regulations

Singapore ranks second in the Ease of Doing Business global ranking. Thanks to its flexibility towards imports and exports of goods, ease of company establishment, and minimal bureaucratic hurdles. 

Attractive tax system

Singapore’s income tax rates are competitive for both companies (17%) and individuals (the tax rates are progressive and capped at 22%, and most payers pay a much lower rate). Apart from that, various tax relief schemes are also available, for instance, tax exemption schemes for new start-up companies. Double taxation was also abolished after Singapore concluded more than 90 double tax avoidance agreements.

Skilled workforce

Singapore employs more than 14,000 in its trade and sales sector. This country of only 5 million has the 4th largest pool of trading talent in the world – after London, New York City, and Houston. Also, 47% of the country’s workforce has a higher education degree.

Setting up a Singapore import and export company within 3 steps

Now you have come to the most anticipated part – setting up your import and export company in Singapore. Here is what you will need to do.

Register your business

First things first, you will have to register your Singapore company and choose a business structure – sole proprietorship, partnership, limited partnership (LP), limited liability partnership (LLP), and limited liability company. A private limited company is the most common and flexible option most entrepreneurs choose.

The registration process may seem stressful, but at Biz Atom, we make sure that the private limited company registration procedure is fast and hassle-free. This process can be done  through the Accounting and Corporate Regulatory Authority (ACRA) – the national regulator of business entities in Singapore, with the following key requirements:

• Your company may have 1 to 50 shareholders —  local or foreign persons, each of whom can be individuals or corporate entities.
• At least one resident director 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, which can be increased at any time.
• A local registered address.

Once your company is successfully incorporated, you will receive an email from ACRA which includes a Unique Entity Number (UEN), which is a standard and unique identification number for each Singapore entity. 

Activate your Singapore customs account

You should activate your company’s customs account so you can carry out import or export trade. Activation is free and does not incur additional costs.

To activate the customs account, go to the  Singapore Customs Account portal to apply. A valid UEN is needed for this process. Be sure to include primary and secondary points of contact in your application to receive all correspondence from Singapore Customs. Normally, the application result will be ready within 4 working hours.

Apply for permits and licenses

After activating your Customs Account, the next step is to apply for a Customs Import Permit or Customs Export Permit with Singapore Customs. This permit is required for the import or export of all goods.

Applications for these permits can only be made through a declaring agent, an entity acting on behalf of a trading company, to apply for a license. You can appoint a declaring agent to apply on your behalf for a service fee, typically S$ 2.88 per application. You can also register yourself as a declaring agent to submit your permit application. However, you must go through a rigorous set of criteria to assess your suitability as a declaring agent.

The permit applications are submitted by the declaring agent online through the TradeNet online system. However, Singapore legislation defines certain goods as controlled goods. This requires an additional permit from the Competent Authorities (CA) before imported into Singapore. In such a case, you must apply to the relevant CA.

Other than medicine and food products, some other examples of controlled goods are:

• Toy guns or replicas
• Helmets intended for military combat protection
• Handcuffs
• Toy or replica explosives, ammunition, grenades, or improvised explosive devices
• Pieces of clothing meant to protect against attack, including bulletproof vests

Regulations on the import of goods 

Singapore legislation defines importation as transporting goods into the state’s customs territory – except goods in transit by any means, from any place (including free trade zones) for the importer’s use or use by others.

Before you start carrying out import activities, make sure you’ve done the following things:

Apply for an interbank GIRO account

Setting up an interbank GIRO (IBG) account enables you to pay duties, fees, taxes, and other charges from your account to the Singapore Customs’ services. The application for the IBG is submitted to the Customs department. You can always rely on Biz Atom to handle this procedure for you. 

Proclaim financial security

You or your declaring agent might be required to provide financial security to the government. It is usually needed to import goods that consist of temporary import of goods for approved purposes, dutiable goods, and operation of licensed places such as excised factories and licensed warehouses. 

You can use a Finance Company Guarantee, a Banker Guarantee, or an Insurance Guarantee in these cases. The amount of collateral required for a license application depends on the type of goods and their trade movements; You can find these details on the Customs website. The customs may also require you to provide financial security for other situations or change the amount on a case-by-case basis.

Prepare documents for customs clearance

Once you have obtained the necessary permits, the final step is cargo clearance. You will have to submit these documents at the entry point:

• The main document, which is a hard copy of the approved customs clearance
• Supporting documents that may include invoices, packing lists, and bills of lading or airwaybills

Regulations on the export of goods 

Singapore legislation defines exports as removing goods from a country’s customs territory – except goods sent by shipment or goods en route – by any means, including free trade zones.

The procedure for meeting export requirements is similar to importing goods. You must activate your customs account to get a customs approval letter, apply for permits and licenses, and get your documents for customs clearance ready. 

As in importing, additional permits or licenses from the respective CA are required to export controlled or strategic goods. Strategic goods 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 online system.

What to consider if your goods are transiting in Singapore

Transiting is when you bring goods into Singapore from a place outside the country for the sole purpose of moving them to another state by the same or another transportation. Another term used for this concept is “transshipment.”

To obtain the relevant permits and authorization from the relevant CA, you must activate your customs account and then register as a Declaring and Transhipment Agent with ACRA. You will also need to check if your goods are controlled and provide financial security. You may then apply for Customs Transhipment Permit and prepare documents for cargo clearance.

What to consider if your goods are NOT transiting in Singapore

Singapore’s trade and relevant customs legislation cover only matters of import, export, or transit procedures. These cases apply to situations where goods are taken into, out, or via Singapore’s territory. However, when your Singapore-incorporated company intends to engage in foreign trade or transit goods through the territory of another state, this will be governed by the legislation of the respective countries.

Other things to consider

Here are some other things to consider when doing import and export activities in Singapore.

GST and duty

You have to pay Goods and Services Tax (GST) and duties for importing dutiable and non-dutiable goods into the state for domestic consumption. However, you don’t have to pay them when exporting from or to transit goods through Singapore.

Goods storage

As for the goods storage, you can choose one of these three warehouses to keep your goods:

1. Licensed warehouses

Licensed warehouses allow you to store dutiable goods, such as liquor, tobacco, motor vehicles, and petroleum.

2. Zero-GST warehouses

With the Zero-GST warehouse scheme, you are allowed to store only non-taxable goods for an indefinite period in an area designated with permission from Singapore Customs, with GST suspended.

3. Free Trade Zone warehouses

You can store all goods, including duty-free items, in a Free Trade Zone (FTZ) warehouse, except liquor and cigarettes. However, duties and taxes are levied on commodities that arrive by rail and road, which can not be deposited into the FTZ. 

Financial considerations

There is always support and various schemes offered by the Singapore government to help you with finances. Consider a company bank account, corporate loan, Letter of Credit, Global Trader Program, or Trade Credit Insurance Scheme (TCIS). 

Registering your import and export company with Biz Atom

First, you need to register your business in Singapore to set up your trading company in Singapore. This will enable you to have all the necessary permits and licenses for conducting import and export activities in the country. If you have made the decision, please appoint Biz Atom as your corporate service provider who will be committed to handling the procedure and ensuring the smooth process of your company formation. 

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