Trade agreements have played a vital role in driving Singapore’s economic growth over the last couple of decades and consequently, have helped set the little island apart as a key hub for business activity within the region and beyond. As a leading global trading hub, not only does Singapore offer a diverse range of services, such as warehousing and distribution centres, air cargo facilities, port operations and container terminals, the city state also offers attractive tax rates and customs simplification programs. These services play a key role in allowing businesses to import and export goods safely and efficiently, forming strong economic partnerships with many foreign countries at the same time.
To promote its vision of becoming a global smart nation, Singapore encourages foreign companies to establish themselves in the country. For those who wish to ship their products or services into Singapore’s markets, understanding its trade policies and regulatory framework should be top priority.
What Are the Shipping Trade Policies and Regulations in Singapore?
Shipping trade policies and regulations differ from country to country. In some countries, shipping companies can freely choose their shippers, whereas other governments control the relationships between carriers and customers.
Singapore is a major port city and it also maintains an open door policy towards global trade. As such, it allows foreign carriers into its ports without restrictions. The main aim behind these liberal regulations is to reduce costs and promote national competitiveness. But aside from being a great location for exporters, Singapore is also a major logistics hub where businesses can send their shipments to other countries. Many companies choose Singapore as their preferred shipping destination due to the ease of importing and exporting cargo via its port. For instance, due to the fact that Singapore is located between Malaysia and Indonesia, – both of which ship millions of tons of goods every year – the tropical island makes for a major point of entry for international trade, especially since some types of cargo such as alcohol cannot legally enter either Malaysia or Indonesia.
That being said, despite Singapore being an open economy, it has also adopted stringent rules against importing certain items, such as guns and live animals. In addition, all shipments going out of Singapore face inspection before they leave the port. These inspections include checking for signs of tampering and non-compliance with import laws. To make things easier for you, we have compiled a list of the most important things that you will need to take note of before you consider shipping your products and services into Singapore.
1. Prohibited, Restricted and Strategic Goods
In Singapore, it is unlawful to import shipments without complying with various rules and regulations. As the island is a well-regulated country, Singapore has become very strict over recent years, especially with regard to the importation of certain products into its territory. If you want to bring these types of goods into the country, it would be wise to check if you need any licences or permits to avoid the heavy penalties. There are a number of prohibited and restricted items that you cannot take into the island state which include anything from drugs and tobacco, through to weapons and ammunition. The penalties for importing such items vary as well, depending upon their value and type. Strategic goods which include dual-use items, technology and military equipment, on the other hand, are subject to control under the Strategic Goods Control Act (SGCA).
The main distinction between prohibited and restricted goods is that prohibited means something is formally forbidden by law whereas restricted means something is put under control or limits.
- Chewing gum (except medicated and dental gum)
- Chewing tobacco and imitation tobacco products
- Cigarette lighters in the shape of dangerous weapons such as guns
- Controlled drugs and psychotropic substances
- Obscene articles, publications, videotapes, videodiscs and software
- Reproductions of copyright publications, videotapes, videodiscs, laser discs, records and cassettes
- Seditious and treasonable materials
- Endangered species of wildlife and products derived from the body of such animals
- Telecommunication equipment such as scanning receivers
- Animals, birds and their by-products
- Endangered species or wildlife and their by-products
- Meat and meat products
- Fish and seafood products
- Fruits and vegetables
- Arms and explosives
- Bullet-proof clothing
- Toy guns, pistols and revolvers
- Weapons, spears and swords
- Films, video and video games
- Publications and audio records
- Pharmaceuticals and medicines
- Telecommunication and radio communication equipment
Dual-Use Product Groups
- Systems, equipment and components
- Test, inspection and production equipment
2. Goods and Services Tax (GST) and Customs Duties
Goods and Services Tax (GST) is a broad-based consumption tax charged in addition to the price of imported goods, as well as a wide-ranging category of goods and services in Singapore. Imported goods are also subject to duty payment and a customs permit is required to account for the tax payment of the goods. Dutiable goods that incur both GST and duty costs are as follows:
- Intoxicating liquors
- Tobacco products
- Motor vehicles
- Petroleum products
All other goods are non-dutiable and incur GST only which is charged at 7% of the cost, insurance and freight (CIF) value, including any duties payable. Other charges such as shipping fees, taxes and packing costs are also borne by the importer.
3. Free Trade Zones
In addition to Singapore’s pro-business trade policies, the country also has 18 free trade agreements, 10 bilateral shipping agreements, as well as a comprehensive network of more than 70 tax treaties to elevate its attractiveness as a conducive business location for foreign companies. To make things even better, Singapore also offers free trade zones which are designated areas in which the payment of duties and taxes is suspended when shipments arrive, are stored, or sold within these zones. Key advantages of operating within the free trade zones include the elimination of import permits, customs duties on goods, and GST costs, as well as certain exemptions. However, companies who are looking to trade within these zones need to obtain a permit or licence from the relevant authorities administering the free trade zones. They are as follows:
- Tanjong Pagar Terminal and Keppel Terminal
- Sembawang Wharves
- Brani Terminal
- Keppel Distripark
- Keppel Distripark Linkbridge
- Pasir Panjang Terminal
- Jurong Port (including Pulau Damar Laut)
- Changi Airport Cargo Terminal Complex
- Airport Logistics Park of Singapore
4. Essential Cargo Documents
To ensure your goods are delivered successfully with no hassle and delays, essential documentation is required when transporting your cargo. We understand that shipping documentation can be a struggle to comprehend, which is why we have listed some key documents that you will need to prepare ahead of time before sending your shipments into Singapore below.
- Pro forma invoice
- Commercial invoice
- Packing list
- Bill of lading (BOL)
- Certificate of analysis
- Insurance certificate
- Certificate of origin
- Export licence
Partner with Halcon Primo Logistics
The shipping trade is one of Singapore’s major industries and the port city has become one of the busiest ports in Asia due to its strategic location. With over millions of container shipments passing through each year, there is always going to be someone looking to ship goods to Singapore and leverage its pro-business environment.