Free Trade Zones in Singapore
Singapore has a well-established network of free trade zones (FTZs) that play a key role in the country's position as a global trade hub. These zones offer businesses a range of benefits, including:
Duty and GST suspension: Duties and Goods and Services Tax (GST) are suspended for goods stored within the FTZ. You only pay these when the goods are consumed in the zone or leave for local consumption.
Simplified logistics: FTZs are strategically located near major transportation hubs like ports and airports, allowing for smooth movement of goods.
Foreign investment attraction: Singapore uses FTZs to attract foreign capital and boost international trade.
There are currently nine free trade zones in Singapore, catering to different industry needs. Some of the major ones include:
Changi Airport Cargo Terminal Complex
Jurong Port
Keppel Distripark
Pasir Panjang Terminal
Tanjong Pagar Terminal
Depositing Goods in Free Trade Zones
In Singapore, depositing goods in free trade zones (FTZs) is generally mandatory for most imported goods unless there are exceptions. Here's a breakdown of the process:
Mandatory Deposit:
Typically, all goods brought into Singapore by sea or air must be deposited in a FTZ first. This applies unless customs grants permission for alternative storage in approved premises like licensed warehouses.
Duty and GST Benefits:
The key advantage of FTZs is the suspension of duties and Goods and Services Tax (GST) on deposited goods. You only pay these taxes when the goods are:
Consumed within the FTZ itself.
Removed from the FTZ for sale or consumption in Singapore's customs territory.
Exceptions and Considerations:
Dutiable Goods (Liquor & Tobacco): There are special rules for these products. They can be temporarily stored in the FTZ for up to 30 days for transhipment or transfer to licensed premises. Longer storage requires moving them to licensed warehouses.
Through Bills of Lading: If your goods have a "through" bill of lading or airway bill (meaning they're just passing through Singapore), there are no restrictions on storage duration within the FTZ.
Setting Up a Business in Singapore that Involves Storing, Processing, or Re-exporting Goods
If you're considering setting up a business in Singapore that involves storing, processing, or re-exporting goods, an FTZ might be a suitable option.
Free Trade Zones (FTZs) in Singapore offer significant advantages for businesses involved in storing, processing, and re-exporting goods. Here's a breakdown of why FTZs are a great fit for such businesses:
Cost Savings: Duties and GST (Goods and Services Tax) are suspended on goods within the FTZ. This translates to significant cost savings, especially for businesses dealing with high-value goods or large volumes. You only pay these taxes when the goods leave the zone for final consumption in Singapore.
Efficient Logistics: FTZs are strategically located near major transportation hubs like ports and airports. This proximity simplifies logistics and expedites the movement of goods for processing, re-export, or further distribution.
Simplified Compliance: Operating within an FTZ streamlines customs procedures. The suspension of duties and GST reduces paperwork and simplifies compliance with import and export regulations.
Focus on Growth: By minimizing storage and processing costs, FTZs allow businesses to focus on core activities like value-added processing, inventory management, and building international trade networks.
Here are some additional factors to consider when deciding if an FTZ is right for you:
Industry Specialization: Some FTZs cater to specific industries. Researching individual zones might reveal one that aligns with your specific needs and offers specialized facilities or support services.
Business Volume: High-volume businesses benefit the most from the cost savings and efficiency offered by FTZs.
Future Growth: If you anticipate significant growth in your import, storage, or re-export activities, an FTZ can provide a scalable solution.
Overall, FTZs are a valuable tool for businesses in Singapore looking to optimize their supply chains, reduce costs, and enhance their competitiveness in the global marketplace.
How Bestar can Help
Bestar is a strong contender to assist you with setting up your business in Singapore, especially if you plan to leverage a free trade zone (FTZ). Here's how Bestar can help you:
Company Incorporation and Structure:
Bestar can guide you through the process of registering your business in Singapore. This includes selecting the most suitable business structure (sole proprietorship, limited liability company, etc.) based on your needs.
We can handle the paperwork and liaise with the Accounting and Corporate Regulatory Authority (ACRA) to ensure a smooth incorporation process.
FTZ Expertise:
Given our experience in company formation, Bestar possesses a good understanding of Singapore's FTZs. We can advise you on whether an FTZ is the right fit for your business model (storing, processing, re-exporting goods).
We are able to connect you with specific FTZs that align with your industry or have functionalities that cater to your needs.
Ongoing Support:
Bestar offers a range of services beyond incorporation, including accounting, bookkeeping, and corporate secretarial services. This ongoing support can be crucial for navigating regulations and ensuring compliance within an FTZ.
Our experience can help you understand the specific requirements and procedures related to depositing goods, duty and GST implications within the FTZ.
Consult with Bestar: Discuss your specific business needs and goals with us. This will allow us to tailor our services to your situation and provide the most relevant advice regarding FTZs.
By leveraging Bestar's experience and Singapore's well-established FTZ network, you can set your business up for success in terms of cost-efficiency, streamlined logistics, and a strong foundation for international trade.
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