Setting up a trading company in Singapore perhaps really is a prospective opportunity for entrepreneurs because Singapore has placed 14th as the largest merchandise exporter in the world according to the World Trade Organization’s statistics and has a trade to GDP ratio of 404.9.
Currently, it is estimated that there are approximately 3000 companies operating in Singapore consisting of international and local logistics and supply chain management enterprises. There are 200 shipping lines that are connected to 600 ports in over 120 countries that Singapore can offer with capable personnel and the latest technology. Airlines, shippers, cargo agents, and consignees won’t have to worry because the modernly equipped Changi Airfreight Center operates for 24 hours.
Like other types of company that are to be operational in the country, whether foreign or local, one must register the company first before everything else. There are requirements and several rules to be adhered to, but rest assured that the procedure of getting a company registered usually is quick and rather simple as long as the applicant complies to the guidelines.
All importers and exporters Singapore company registration with the Singapore Customs and acquire an active account. The Singapore Customs will be the one to approve the activity of importing and exporting goods. Account activation takes one to two working days to complete. Once your company has secured a Customs approval, it will be always valid without needing to be renewed.
Some types of businesses/companies in Singapore require licenses and permits. A trading company is one of them, for its main activity is importing and exporting goods in and out of Singapore. The company requires an IN Permit for importing as well as an OUT Permit for exporting. These permits can be obtained through TradeNet®.
Aside from the IN and OUT Permit, there are other permits and certificates that may be needed for certain types of items that are imported and/or exported such as Import Certificate and Delivery Verification (ICDV) for high-technology items and Strategic Goods Control (SGC) Permit for strategic goods and technology that may cause harm of mass destruction. Certain buyers will also require exporters for a Certificate of Origin (CO) that can assure them that the items are made in Singapore.
A certain type of items such as dutiable goods including intoxicating liquors, tobacco, motor vehicles, and petroleum products are levied on an ad valorem basis or specific rate basis. Goods that come into Singapore are subject to Goods and Services Tax (GST) that amounts to 7%. It is administered by the Inland Revenue Authority of Singapore (IRAS). Other fees that may arise as charged by the Singapore Customs are procedural and administrative fees. They are to be paid with GST and duties.
Trading business in Singapore often involves loaning, letters of credits, and insurance to ensure the continuity of their operation says an accounting firm, A1 Business. A loan can be obtained from the bank, choosing from a number of financing options offered such as overdraft, revolving line of credit, term loans, transaction loan, and others. Letter of Credit (LC) is when a buyer’s bank guarantees the payment to the exporter. It is the most preferable method of transaction among exporters and buyers due to its security. It also contributes to lessening various risks in payment activities.