Trade Opportunities in Singapore
Comprising
the main island and some 63 offshore islands, Singapore is a land of immense
business potential. With Malaysia, Brunei and Indonesia as its neighbours,
Singapore is a cosmopolitan city state at the crossroads of international trade
routes.
The official languages of Singapore are Malaya, Chinese (Mandarin), Tamil
and English. Malay is the national language whereas, English is the language of
administration. The time zone in which the Republic lies and its efficient
telecommunications services permit its financial institutions to trade with
Europe, the US and Japan within a working day. As a result, the Republic is now
an important financial, foreign exchange and offshore dollar centre. The
Republic is also the "clearing house" for the region's wealth, the
world's top bunkering port and the third largest oil refining centre after
Rotterdam and Houston. In addition, Singapore is a major international air hub
served by 63 international airlines.
Economy
The
economy of Singapore staged a strong recovery in 1999. Growth was led mainly by
the rapid recovery in external demand, before it became more broad-based in the
second half of 1999 as private consumption demand also improved. The
manufacturing, transport & communications, and wholesale & retail trade
sectors provided the main impetus for growth. The manufacturing sector grew by
14 per cent in 1999 on the strength of the global electronics demand and the
regional recovery. The electronics and the chemicals industries chalked up
double-digit growth of more than 20 per cent.
Business
Hub
Singapore
is today a reputable financial centre, a key regional trading centre, the
world's busiest port and a top location for investments. The country's assets as
a business hub include its excellent infrastructure, strategic location, skilled
and industrious workhorse, advanced capabilities and a government whose approach
to business is both pragmatic and flexible.
Investment
Climate
US-based
Business Environment Risk Intelligence (Beri) ranked Singapore as the World's
second most profitable country to invest in now, and for the next one to five
years. The Republic has maintained its second position after Switzerland for the
fifth consecutive year. Singapore remained Asia's least risky country in
financial magazine Hormones's latest ranking beating Japan marginally by only
1.15 percentage points. Euromoney gave the island Republic a score of 89.17 out
of a total score of 100. In Manufacturing and Service Scores, investment
commitments saw a significant rise. This reflects the confidence of investors in
the Republic as a value-for-money location for doing business.
Infrastructure
and Services
Singapore
has a well-developed infrastructure that meets all the needs of business and
industry.
Singapore
is the telecommunications centre of South east Asia, featuring state-of-the-art
technology. There are three satellite earth stations, a comprehensive submarine
cable network, and three international digital gateways which provide Singapore
international telecommunications links.
Singapore
has also embarked on a multi-million dollar nation-wide multimedia broadband
infrastructure project known as Singapore ONE (One Network of Everyone) which
aims at uniting and connecting the whole of Singapore in one open network.
Singapore
has also drawn a master plan to create an e-commerce hub that would generate
trade of about S$4 billion. It was developed from the 1996 Electronic Commerced
Hotbed Programme which helped to build the "soft environment" for
e-commerce.
There
are 33 modern industrial estates and custom built facilities are available in
flexible sizes across the island. Ready-built factories also provide
industrialist with quick start-up with minimal capital outlay. In addition there
are specialised parks such as the wafer fabrication parks, business parks and a
petrochemical hub on Jurong Island. Access to the port and airport is convenient
via the Republic's extensive network of roads and eight expressways. The modern
and sophisticated port facilities enable Singapore to hold its position as the
world's busiest port.
Free
Enterprise Economy
The
Singapore economy is based on free enterprise, with no restriction on foreign
ownership of businesses and employment of foreign expertise. The repatriation of
profits and the import of capital are freely allowed. There is no capital gains
tax. The Singapore Government encourages business to thrive by keeping red-tape
to a minimum. It also has a reputation for being responsive to changes and is
willing to adapt quickly to new and unforeseen circumstances by altering its
outlook and modifying policies.
Asean
Economic Co-operation
Asean
- a regional grouping comprising Brunei, Indonesia, Malaysia, the Philippines,
Singapore, Thailand, Vietnam and most recently Laos and Myanmar - is a growing
market with great potential demand for consumer and capital goods as well as
technical skills. It can also be an effective springboard to markets in the
Western Pacific Rim and the Far East.
Incentives
Interest
income earned on moneys held on deposit in an approved bank in Singapore and
interest received from approved Asian Dollar Bonds by a non-resident individual
are exempt from income tax. Deposits and balances with, and negotiable
certificates of deposits by, Asian Currency Units of approved banks and approved
Asian Dollar Bonds are exempt from estate duty in Singapore if held by a person
who is neither domicile nor resident in Singapore at the time of death.
Douple
Taxation Relief
Singapore
has signed avoidance of double taxation and prevention of fiscal evasion
agreements with the following countries which are currently in force :
Australia, Bangladesh, Belgium, Bulgaria, Canada, China, Czech Republic,
Denmark, Finland, France, Germany, India, Indonesia, Israel, Italy, Japan,
Korea, Luxembourg, Malaysia, Mauritius, Mexico, Netherlands, New Zealand,
Norway, Pakistan, Papua New Guinea, Philippines, Poland, South Africa, Sri
Lanka, Sweden, Switzerland, Taiwan, Thailand, United Arab Emirates, United
Kingdom and Vietnam. Provisions in the different agreements are aimed at
eliminating or minimising double taxation on the same income earned.
No
Capital Gains Tax
There
is no capital gains tax, turnover tax, development tax or surtax on imports in
Singapore.
Import
and Export Regulations
Customs
Duties : Singapore
is virtually a free port with a very short tariff. The main dutiable items are
petroleum products, intoxicating liquors (including wine, beer, ale, stout and
porter) motor vehicles and tobacco products (including cigarettes and cigars).
All
dutiable goods imported into or manufactured in Singapore are subject to customs
duties in accordance with the Customs Duties order. Where the goods are
dutiable, ad valorem or specific rates may be applied.
Exemption
: Local
industries importing dutiable raw materials for industrial use may apply for
exemption of duty from the Customs and Excise Department as prescribed in the
Customs Duties (Exemption) Order.
Import/Export
Permits : Singapore
pursues a free trade policy. very few goods are dutiable or under control. Goods
in transit discharged into the airport and seaport free Trade Zones (FTZs) are
free from Customs formalities. One can therefore freely import and export most
goods into and from Singapore. However, he is required to obtain import/export
permits from the Customs and or Singapore Trade Development Board. All
declarations for Customs and TDB purposes are required to be submitted and
approved electronically through the EDI network called the Trade Net System. For
controlled items, importers/exporters must not enter into any financial
commitment or contractual obligations before they obtain the necessary licences
or approvals from the controlling agencies.
Goods
&Services Tax
A
Goods & Services Tax (GST) at a rate of 3 per cent is imposed on the supply
of goods and services in Sinagapore and on the importation of goods into
Signapore. The taxable value on imported goods is calculated based on 3 per cent
of the CIF value (cost, insurance and freight) of the goods plus commission,
other incidental charges and all customs duties payable. Reliefs from payment of
GST on imports may be granted on application to the Customs and Excise
Department as prescribed in the GST Order. Such approvals are subject to
compliance of certain conditions. Exports are zero-rated. Only a taxable person
can reclaim the GST paid as input tax.
Trade
In
1999, GDP grew by 5.4 per cent. Economic growth was bolstered by the
manufacturing sector, in particular the rise in global demand for electronics
goods and new pharmaceutical products. The Ministry of Trade and Industry has
forecast that the opening of the new millennium is likely to see Singapore's
economic growth at 4.5 per cent to 6.5 per cent in the year 2000. Singapore's
merchandise trade saw sustained recovery of 8.1 per cent in 1999 after a 7.5 per
cent contraction in 1998.
Merchandise
trade turned from a decline of 7.5 per cent in 1998 to a growth of 8.1 per cent
in 1999. The improvement in non-oil trade was largely because of the pick up in
demand in the crisis hit economies, which together accounted for 42.5 per cent
of Signapore's total non-oil trade. This was aided by the upswing in the global
electronics market as well as other pockets of growth like exports of chemicals
and integrated circuits (ICs). The growing strength in exports was supported by
the steady demand in the US, EU and China, NIEs of Hong Kong and Taiwan as well
as emerging new markets like Mexico and India. The US and EU, accounting for
48.5 per cent of total NODX (Non-Oil Domestic Exports) in 1999, remained as the
top 2 markets for domestic exports. In 1999, NODX to EU expanded by 7.0 per
cent. The robust growth was primarily contributed by domestic exports of
pharmaceuticals and disk media products to the EU. The strong exports of
integrated circuits (ICs) and printed circuits boards assembled (PCBAs) to the
US were partially dampened by the weak export of disk drives. This led to
overall NODX to US growing marginally by 2.2 per cent for the year.
Emerging
Markets :
NODX to the emerging markets, which accounted for 5.2 per cent of total NODX
showed mixed performance. Total NODX grew by 5.4 per cent in 1999 compared to
13.6 per cent in 1998. The slowdown was mainly in NODX to the Middle East and
Eastern Europe due to the adverse economic conditions especially in the first
quarter of 1999. Other emerging markets like India and Mexico performed
reasonably well.
Non-oil
imports, which started to pick up in April 1999, grew by 9.5 per cent for the
year. The growth was largely because of the rise in manufacturing activities, as
reflected in the double-digit growth of intermediate goods (66 per cent of the
non-oil imports) which are used as industrial inputs to produce final products
for exports. Import of consumer goods strengthened only in the second quarter of
1999, while import of capital goods remained weak. With its excellent
communications facilities and strategic geographical position, Singapore is the
ideal distribution and transshipment hub for the Asia-Pacific Region. As such,
international firms may find it advantageous to make Singapore, with its
excellent facilities, the distribution and servicing centre for the machinery,
capital goods and other products they sell in this region.
For
further details contact :
Singapore
Trade Development Board
Plot
No. C-4, 704/710 Balarma, 7th floor,
Bandra
Kurla Complex, Bandra (East), Mumbai - 400 051
C.
P. : Mr. Vaishnav Puri, Hon. Trade Representative