For Importing and Exporting Controlled Goods
The import and export of certain goods depend on the control of the Controlling Agencies and are therefore known as controlled goods. To import or export such controlled goods, you need a special permit, in addition to the regular IN Permit and OUT Permit. The permit applications are to be submitted to the relevant Controlling Agencies through the TradeNet® system or through your freight forwarding agency or cargo agent for processing and the approval. Some examples of controlled goods are cigarettes, tobacco products, petrochemicals, drugs, animals and food products.
For Importing High-Technology Items
Some high-technology items are dependent on the export control by the country that is exporting and the Singapore importer could be requested to furnish an Import Certificate and also a Delivery Verification (ICDV) given by the exporter. Importers have to apply for an ICDV from the Singapore Customs. Items covered under an ICDV have to be imported into Singapore directly, and cannot to be sent via other countries.
For export, trans-shipment, or transfer of Strategic Goods
In case of exporting, transhipping or bring in transit some Strategic Goods, you need to obtain a Strategic Goods Control (SGC) TradeNet Permit. Strategic goods have to be traded as per the Strategic Goods (Control) Act. This Act covers all the goods and technology that are planned or expected to be used for weapons of mass destruction.
For Exporting Local Goods
Some buyers may request exporters for a Certificate of Origin (CO), which is a document proving that the goods are manufactured in Singapore. There are two types of Certificates of Origin:
- Ordinary CO – This document is meant to satisfy the buyers that the goods exported are wholly obtained, manufactured or produced in Singapore
- Preferential CO – This document helps to improve the value of your exports by enabling the buyers to claim privileged tariff treatment while importing the products under Free Trade Agreements or one of the Schemes of Preferences
You could apply for a CO through TradeNet® or through your freight forwarding agency or cargo agent.
Taxes and Fees
Certain goods which are made in Singapore or imported into the country and are also subject to customs and/or excise duty are called as dutiable goods. Dutiable goods in Singapore include: tobacco products, liquors, vehicles, and petroleum products. Duty is levied on an ad valorem or specific rate basis. An ad valorem rate is basically a percentage of the total Customs value of the imported goods. A specific rate is a precise and specific amount per unit of weight or some other quantity like $300.00 per kg. Duty may be briefly suspended (up to the point of consumption) under the different Customs schemes.
Depending on the qualifying conditions, exemption of duty is granted for certain wine used at wine exhibitions and conferences approved under the Meetings, Incentives, Conventions & Exhibitions (MICE) Incentive Scheme “BE In Singapore – BEIS” which is administered by the Singapore Tourism Board. In addition, motorized bicycles that cannot be registered as motorcycles/scooters are also exempt from the excise duties.
Goods that are imported into Singapore are subject to the existing GST which is currently at 7% if those goods are to be used for local consumption. GST is regulated by the Inland Revenue Authority of Singapore (IRAS) and is collected by Singapore Customs. GST applicable on all dutiable and non-dutiable goods is to be paid on an ad valorem basis, that is, 7% on the total value of goods. The taxable GST is calculated depending on the CIF value plus all the duties and any other chargeable costs, which may or may not be reflected on the invoice. GST might be briefly suspended (up to the point of consumption) under the different Customs schemes. Please note that depending on some specific criteria, GST relief is given for the wine, which is used at wine exhibitions and conferences approved under the Meetings, Incentives, Conventions & Exhibitions (MICE) Incentive Scheme “BE In Singapore – BEIS”, which is administered by the Singapore Tourism Board.
GST can be charged from customers if you have registered with IRAS to collect GST. You could also get back GST through a refund on GST paid on the imports if the goods are eventually exported out of Singapore. You need to be GST-registered with IRAS to also apply for the refund.
Note: There are special schemes, for example, the ‘Major Exporter Scheme’ and ‘Import GST Deferment which decrease the burden of GST.
Singapore Customs charges some administrative fees. The best way is to make all payments for all fees, duties and also GST to Singapore Customs by GIRO, which authorizes Singapore Customs to directly make deductions from one’s bank account.
Singapore companies and businesses often depend on loans, LCs or letters of credit and insurance to take care of the financial risks that are involved in trading.
Letter of Credit (LC) is very commonly used in Singapore; in this, the buyer’s bank guarantees the payment to the exporter. This is the preferred option of payment both among exporters and buyers because the exporter’s payment is safeguarded before the goods are shipped and in the same manner, the buyer doesn’t need to make any payments till he/she receives the goods. Depending on the LC, other financing options available are Back To Back LC, Trust Receipt and Packing Credit.
Most Singapore banks work with the large import and export industry and give competitive trade finance services such as import and export products and bank guarantees. Some financing options offered by banks are overdraft, revolving line of credit, term loans, transaction loan, inventory financing, and factoring loans.
Trade Credit insurance provides businesses with protection against any risk of non-payment by the buying agencies which might arise due to commercial and non-commercial risks. If the buyers fail to pay on the pre-determined due date and even in the grace period, the insurer would pay after verifying the validity of that claim. International Enterprise Singapore, which is a Government initiative, gives trade credit insurance at appealing and competitive premium rates through its TCI Programme.
Depositing and Storing Goods
- Free Trade Zones (FTZs) are special areas that are selected in Singapore’s air and seaports where all the duties and Goods and Services Tax (GST) are suspended temporarily for the imported goods
- You would need to only pay the duties and taxes at the time when goods leave the FTZs and come into customs territory for utilization. All dutiable goods are allowed to be stored in the FTZs barring liquors and cigarettes
- If you are importing certain goods for exporting (re-exporting), then FTZs could help your cash flow in a big way as you would not have to pay duties and GST on the imports
- Please note that the goods that come by rail and road cannot be deposited into FTZs and duties and taxes are payable on them
- You are permitted to store dutiable goods in designated Licensed Warehouses. In this case, GST and duties would be suspended till such time that the goods are taken away from the premises and sent to the local market for selling or consumption
- You could store non-dutiable goods in designated Zero-GST Warehouses so that GST is suspended till such time that the goods are taken away from the premises and sent into the local market for selling or consumption
Thinking of setting up a trading company yet? Contact us at IMC and we would help you streamline the process of company incorporation Singapore or immigration services in Singapore.
