STEP 1: Incorporate the Company
Similar to incorporating any company in Singapore, the most common business entity is the ‘private limited company’. The brief key requirements are as follows:
- at least one shareholder (individual or corporate entity)
- one local director (may be a citizen, permanent resident, EP holder or DP holder)
- one local company secretary
- initial paid-up capital of at least S$1
- a physical Singapore office address
STEP 2: Register for a Singapore Customs Account
It is mandatory for any company whose business activities include export, import or trans-shipment activities in Singapore to register themselves with Singapore Customs as an exporter, importer, common carrier and others.
You need to mentioned the company’s UEN (Unique Entity Number) in every application made by it for a permit, license, certificate or other document under the Regulation of Imports and Exports Act (Chapter 272A). All entities with a valid UEN can register for a Customs Account for free and is can normally be done within the same working day.
STEP 3: Apply for Customs Permits
Upon registering for a Customs Account, you may appoint a declaring agent for Customs Permits (either export, import or both). Do take note of which goods are liable of relevant tax and duties. In addition, Singapore views these items due to be imported or exported very strictly should these items be classified as controlled goods. So it is highly encouraged that due diligence be taken.
STEP 4: Apply for Inter-Bank GIRO
You must maintain an Inter-Bank GIRO account with Singapore Customs to facilitate the payment of duties, Goods & Services Tax (GST) and other fees to Customs directly. The approval process usually takes 3 to 4 weeks.
STEP 5: Security Lodgement requirement by Singapore Customs
All trading companies in Singapore are required to provide security if it engages in transactions involving taxable goods, temporary import of goods for approved purposes or operation of licenced premises such as licenced warehouses or excised factories. The amount of security lodgement vary on a case-by-case assessment.
For more information on Step 2 to 5, please visit the Singapore Customs website here.
STEP 6: Clearance of Goods
Please ensure that your permits are valid. For import/exports of container cargo, the shipper seal number and container number are required when applying for clearance. Procedures for clearance for cargo by sea differs from that of land or air. Do check with the relevant checkpoints for more information.
STEP 7: Letter of Credit
Almost all trading companies in Singapore apply for LC (Letter of Credit) which reduces the risk of non-payment against delivery for the seller and risk of non-delivery against payment for the buyer. The LC is a form of undertaking from the buyer’s bank to pay an exporter, through the exporter’s bank, for goods on behalf of the buyer.
STEP 8: Global Trader Programme
The Global Trader Programme (GTP) offers a reduced corporate tax rate of 5% or 10% on qualifying trading income for three or five years. These qualifying trading income includes income from physical trading, brokering of physical trades and derivative trading income. The GTP is only available to companies which conduct substantial operations in Singapore measured by local expenditure and employment.
For more information on the GTP, please visit the IE Singapore website here.
STEP 9: Trade Facilitation Scheme
The scheme addresses market gaps in trade financing for Singapore-based companies in emerging markets. Under this scheme, IE Singapore enters into risk sharing arrangement with Asian Development Bank (ADB) and Swiss Re Corporate Solutions to increase the capacity of credit guarantees to Singapore-based banks for protection against the non-payment risks of overseas issuing banks.
For more information on this scheme, please visit IE SIngapore's Access to Financing website here.
STEP 10: Trade Credit Insurance Scheme (TCI)
The Trade Credit Insurance (TCI) is a financial assistance programme under IE Singapore. It is an important tool for companies to protect their cashflow against non-payment by their buyers, thus allowing them to acquire new customers with greater confidence. TCI enables qualifying Singapore companies to receive support of up to 50% of the minimum premium for TCI policies held with Singapore-registered credit insurers, capped at S$100,000 per qualifying Singapore-based company.
For more information on how to qualify for the TCI, please visit IE SIngapore's Access to Financing website here.
If you are interested to incorporate a trading company in Singapore, Inter Group offers a wide range of services to assist you. Do visit our Solutions in Singapore page for more information or contact us.