Known for its ease of doing business, international outlook, and strategic position connecting Eastern and Western shipping lanes, Singapore is a welcoming locale for foreign traders. With connections to over 600 ports in 120 countries, Singapore boasts the world’s second busiest container port and is the gateway to the ASEAN region. In 2014 it was the world’s 14th leading exporter in world merchandise trade with a value of US$410 billion, and the 15th top importer, with a value of US$366 billion. Rated by the World Bank as the easiest place in the world to start, run, and do business, incorporating a trading company in Singapore can be done in just a matter of hours. Further, Singapore’s advanced infrastructure and 20 implemented free trade agreements with 31 partners add to its allure as Southeast Asia’s top trading post.
In accordance with Singapore’s reputation for its business-friendly and clear regulatory environment, import and export procedures in the country are simple and efficient, and acquiring the requisite permits and licenses can be done in short order. This article outlines the steps to acquire the necessary documentation and follow government protocols to engage in importing and exporting in Singapore.
Singapore’s Customs Act, Goods and Services Tax (GST) Act, and Regulation of Imports and Exports Act govern the import of all goods into the country. The party who imports goods into Singapore for their own account or use or for the account or use of some other person is considered to be an importer. GST and/or a duty payment applies to all goods imported into Singapore for domestic consumption. The GST rate is seven percent of the cost, insurance, and freight (CIF) value, and dutiable goods include intoxicating liquors, tobacco products, motor vehicles, and petroleum products.
In order to participate in import activities within Singapore, including applying for import permits or certificates, importers are advised to adhere to the following steps:
Step 1 – Review Controlled Goods
Before initiating the import process, it is recommended to double check whether the goods in question are controlled or subject to restrictions. When a good is restricted, the relevant competent authority will be listed next to the good’s HS code on the Singapore Customs’ database. If unsure about how a good is classified, one may apply for an official classification ruling for use within Singapore.
Step 2 –Activate Customs Account
To begin the import process, the importer must obtain a Unique Entity Number (UEN) by registering with the Accounting and Corporate Regulatory Authority (ACRA), or another relevant UEN issuance agency, which will allow the importer to activate its Customs Account.
Step 3 – Register for Inter-Bank GIRO Account
In order to pay duties, GST, and other fees, importers must have an Inter-Bank GIRO (IBG) account with Singapore Customs. To create an account, importers can submit an IBG form directly to Singapore Customs. Relevant GST and/or duty payments are made through the IBG once the customs import permit is approved.
Step 4 – Furnish Security
Security is required to be furnished for undertakings involving dutiable goods, temporary import of goods for approved purposes, and for the operation of licensed premises, including warehouses and excise factories. Bank or finance company guarantees and insurance bonds are acceptable forms of security.
Step 5 – Obtain Customs Import Permit
To acquire a customs import permit, importers may register themselves as a declaring agent or appoint a declaring agent to act on their behalf. Permit applications are submitted online through the TradeNet system. When applying for the customs permit for containerized cargo, the relevant container number and shipper seal number must be declared.
Step 6 – Prepare Documents for Cargo Clearance
Various documents must be submitted to checkpoint officers when cargo is being cleared at an entry point. For both conventional cargo and containerized cargo, a printed copy of the approved customs permit and supporting documents such as the invoice, the packing list, and the Bill of Lading or Air Waybill are required for submission. If importing containerized cargo by sea, these documents do not need to be immediately presented to checkpoint officers at the entry point.
In most cases, all documents in connection with the import of goods must be kept for five years from the date of customs permit approval in either physical or digital form, and must be presented to Singapore Customs upon request.
Exporting goods from Singapore falls principally under the Customs Act, the Regulation of Imports and Exports Act, and the Strategic Goods (Control) Act. All goods exported from Singapore must be declared, though they are not subject to GST and duty. A certificate of origin can be acquired for any exported good created in Singapore through the online TradeNet platform.
Step 1 – Review Controlled Goods
As with importing, exporters should confirm whether the goods in question are governed by any restrictions, based off the same Singapore Customs classification database.
Step 2 – Activate Customs Account
A UEN is required for all export activities, which is given by the ACRA or relevant UEN issuance agency. A Customs Account can be activated after obtaining a UEN, as is the case with importing.
Step 3 – Obtain Customs Export Permit
Procuring a Customs Export Permit follows the same process as obtaining a Customs Import Permit through Singapore Customs’ TradeNet system.
Step 4 – Prepare Documents for Cargo Clearance
If stated in the permit conditions or if the cargo being exported is a dutiable good, certain documents must be presented to checkpoint officers at the point of cargo lodgement. In such instances, both containerized cargo and conventional cargo require the approved customs export permit and supporting documents including the invoice, packing list, and the bill of lading or airway bill, in addition to having the permit number at hand.
A customs export permit is required for cargo clearance in the following instances:
- Export of dutiable goods from licensed warehouses;
- Export of goods from bonded warehouses;
- Export of goods under the Temporary Export Scheme; and
- Re-export of goods previously imported under the Temporary Import Scheme.
As is the case with import documents, all the relevant supporting documents relating to export of goods generally must be retained physically or digitally for five years from the date of approval of the customs permit.
Further Support from Dezan Shira & Associates
As one of the world’s busiest trading hubs, Singapore presents simple and streamlined import and export procedures. However, compliance with government regulations is essential, and leveraging Singapore’s free trade zones, warehousing schemes, and temporary import policies can result in different procedures and requirements. With decades of experience assisting foreign investors set up businesses in the region, specialists at Dezan Shira & Associates are well placed to help companies operate and succeed in Singapore.
This article was first published September 2016.
Since its establishment in 1992, Dezan Shira & Associates has been guiding foreign clients through Asia’s complex regulatory environment and assisting them with all aspects of legal, accounting, tax, internal control, HR, payroll and audit matters. As a full-service consultancy with operational offices across China, Hong Kong, India and emerging ASEAN, we are your reliable partner for business expansion in this region and beyond.