What do I need to start an import-export business?
How to set up an import-export business in Singapore? Singapore is a world-class player in world trade. Its strategic location in Southeast Asia and extensive air and sea links to facilitate interregional and global trade has made it a major trading hub in the global supply chain. It is currently ranked 14th in the world for exports and 15th for imports. So if you are planning to start an import-export business, Singapore would be the ideal jurisdiction to set up such an enterprise.
Renowned for its ease of doing business, its penchant for international business and its strategic position as a maritime link between East and West, Singapore is an ideal hub for foreign investors.
Singapore’s developed infrastructure system and twenty free trade agreements with thirty-one countries make it one of the best trading bases in Southeast Asia.
How to apply for an export license? In keeping with Singapore’s reputation as a business-friendly economy with a clear regulatory system, the country’s import and export procedures are simple and efficient, and permits and licenses can be obtained in a very short time.
Why is Singapore a major shopping center?
How do I start an import-export business? There are several reasons why Singapore has become a key trade center and why it is beneficial to open an import-export business in Singapore:
- Favorable geographical location. Singapore is located on a strategic sea route with a huge trade volume between East and West (worth about $5 trillion a year). Nearly 30 percent of all Asian trade is conducted through Singapore.
- Reliable infrastructure. According to the Mercer Quality of Living study, Singapore has one of the best infrastructures among the world’s leading cities.
- Business-friendly rules. The country ranks second in the global ease of doing business ranking. Singapore’s liberal attitude towards importing and exporting goods, the ease of setting up a company, and minimal red tape contribute to this rating.
- Attractive tax regime. Income tax rates are competitive for both companies (17%) and individuals (the tax rate is capped at 22%, and most payers pay a significantly lower rate). In addition, numerous tax incentive schemes are available. Singapore has more than 70 double taxation treaties, further simplifying international trade by eliminating double taxation.
- Stable financial system. Singapore’s financial system is closely integrated with international financial markets. It has over 500 world-class financial institutions. The country provides 25-35% of trade finance for commodity trading in Asia.
- Low corruption. It is a country that follows the rules, where contracts are respected. Nepotism does not exist.
- Skilled workforce. Singapore employs over 14,000 people in trade and sales, and the small country of just 5 million has the 4th largest trading talent in the world after London, New York, and Houston. Besides, 47% of the country’s workforce has a university degree. However, wages in the country are relatively low.
When wondering- what do I need to start an import-export business– most entrepreneurs choose Singapore because of its prospects. These factors have attracted nearly 70% of the world’s largest commodity trading companies, which generate over $1 trillion in annual turnover from their operations in Singapore.
How to set up an import-export business in Singapore?
You must first register your Singapore company and apply for an export license to start a trading business. The Registrar of Companies in Singapore is called ACRA, the national regulatory authority for business entities in Singapore. Although the procedure is similar to the registration of any other company, it is quick and hassle-free. The most suitable form for a commercial enterprise is a closed joint-stock company. Foreigners must work with a Singapore-based corporate service provider to register their company.
The requirements for registering a private limited company are as follows.
- A company can have from 1 to 50 local or foreign shareholders, each of whom can be an individual or a legal entity.
- The minimum paid-up capital is only S $1, which can be increased at any time.
- The company must have at least one Singapore resident director.
- The company must appoint a secretary for the Singapore resident company.
- The company must have a local legal address.
- The company name must be approved before registration.
- Upon registration, the company will receive a Unique Legal Entity Number (UEN), a standard and unique identification number for each legal entity in Singapore. All government agencies identify the company by their UEN, which simplifies inter-agency communication and integration.
How to apply for an import and export license?
You will need a customs clearance to import the goods. As an importer, you can register as a declaring agent or appoint a declaring agent to act on your behalf. Permit applications are submitted by the declaring agent online via the TradeNet online system and may be submitted by your corporate service provider.
However, Singapore law defines certain goods as controlled; this requires additional approval from the Competent Authorities (CA) before you can import them into Singapore. In each case, you should contact the appropriate certification authority.
You can search the Trade Net service using the product description and the Harmonized System product codes to check if your items are under control or prohibited. If an item is subject to control, you can directly check with the relevant CAs for their licensing requirements.
How to apply for an import and export license? After obtaining the necessary permits, the last step is cargo clearance. The relevant documents must be presented at the point of entry. The main document is a printed copy of the approved customs permit, and supporting documents may include an invoice, packing list, or air waybill.
These documents must be retained for five years from the date of approval of the customs permit in physical or digital form.
Please note that specific categories of goods, such as weapons, nuclear materials, obscene material, reproduction of copyrighted material, etc., are prohibited and cannot be brought into or out of Singapore under any circumstances.
Registering your business in Singapore is an intelligent strategy for a trading company. The procedure is transparent, cheap, and straightforward. When your Singapore company decides to start importing or exporting any goods from Singapore for commercial purposes, you need to apply for permits or licenses with the appropriate competent authorities and follow the other procedures described. It is easy and quick to obtain such documents. In addition, your company can take advantage of several government trade business support programs. Please contact a professional if you are considering registering your business in Singapore, you need help obtaining any import or export permits, or any other assistance.