By Vlad Cuc, specialist in company formation matters
Free trade zones are areas through which companies can import, sell or export goods without customs, excise duties or goods and services tax (GST). Singapore also has free trade zones (FTZs) which enables companies in the trading sector to benefit from transportation facilities. These special areas are regulated by the Free Trade Zones Act enabled in 1966 and last amended in 2014. Singapore’s FTZs allows companies to store their merchandise temporarily until they are loaded to a ship or an aircraft without customs clearance.
Our specialists in company formation in Singapore can provide you with more information about the facilities offered in the city-state’s free trade zones. Those who want to open free zones companies in Singapore can rely on the services provided by our local consultants.
All Singapore free zones fall under the Free Trade Zones Law which was enabled in 1966 and last amended in 2014. The law provides for the following:
The main authorities which supervise the activities of free zone companies in Singapore are the Free Zone Advisory Committee, the Director of the Singapore Customs and the Ministry for Trade and Industry.
Our Singapore company formation consultants can offer detailed information on the provisions of the Free Trade Zones Law.
At the moment, Singapore has nine free trade zones:
Singapore companies operating in one of these FTZs are not required to pay customs duties until their goods exit the free zones. These companies also benefit from streamlined customs procedures when importing goods in the city-state.
In order to operate in one of Singapore’s free zones, local companies must obtain a permit from TradeNet which allows them to import, export and transport their goods overseas. Our specialists in company formation in Singapore can help local companies obtain the needed permit. Local companies must also obtain permission from the Customs Authorities in order to keep their goods in the FTZs. Foreign companies operating in Singapore must work with local transporters and traders in order to obtain a license.
Foreign investors seeking to open a company in one of Singapore’s free zones can do so without any restrictions. The minimum share capital for setting up a business in an FTZ depends on whether the company needs a warehouse or office spaces and it must be deposited within the first year of the registration. The company must also obtain a permit from the free zone’s authority.
We also invite you to read about Singapore's free zones in the scheme below:
Those who want to open companies in Singapore’s free zones must comply with certain requirements, which must respect the provisions of the Company Law but also those of the Free Trade Zones Act. All Singapore free zones are opened to both local and foreign investors seeking to operate in the city-state and entrepreneurs who can be natural persons or corporate ones must first obtain a permit from the PSA Corporation Authority.
The minimum share capital for setting up a free zone company in Singapore is 100,000 SGD for companies seeking to have warehousing spaces and 50,000 SGD for those in need of office spaces.
The registration of the company will then follow the same steps as those for setting up a business outside the free zones.
Corporations seeking to open free zone companies in Singapore must also file their certificates of incorporation and the audit accounts report for the last financial year.
Our Singapore company formation representatives can help with all the formalities related to setting up a free zone company.
There are two main types of licenses which must be obtained by those interested in operating in Singapore free zones. The first one is available for corporate users, while the second one is issued for individuals and has a temporary validity.
In order to apply for a PSA Pass, one must respect the conditions, safety and security rules imposed by the agency.
The following documents must be submitted for a temporary pass which is usually issued by an employer or sponsor for a worker in the company:
The temporary pass can be issued for 24 hours or 2 weeks, the latter being the maximum duration of such a permit.
In the case of a PSA permit, the validity period is 1 or 3 years and is subject to various fees. It takes no more than 4 days for the Authority to issue any of the two types of passes.
If you need more information or have any questions on free zones in Singapore, our agents here are at your disposal with detailed answers.
The main advantage of all free zones created in Singapore is related to the extensive storage facilities which can be accessed by both local and foreign companies. Apart from these, Singapore companies will also benefit from:
All Singapore free zones are located close to some of the largest waters transiting the city-state, which represents a great advantage for shipping companies. You can rely on our local advisors if you want to open a company in Singapore as a shipping company.
Two of the largest free zones in Singapore are Jurong Port and Changi Airport. The first one offers access to one of the largest rivers in Singapore, while the second one to the largest airport in the city.
Jurong Port can accommodate up to 15,000 vessels per year and represents one of the world’s largest multi-purpose ports with facilities which include a great number of warehouses and a cement terminal.
Changi Airport is dedicated to companies transporting goods by air and the free zone attached to the airport hosts both warehouses for the storage of goods, as well as office spaces for the Singapore companies operating here.
Keppel District Park is one of the most important free zones in Singapore which has undergone modernization in order to offer large warehousing and office spaces, as well as cargo distribution systems which are connected to other Singapore free zones, among which Brani Terminal, Tanjong Pagar and Pasir Panjang.
Keppel Distripark is also known for having quick access to some of the most important roadways and highways in Singapore.
With respect to the services available for those who want to set up free zone companies in Keppel District Park, we can mention the following:
Common carriers can also benefit from co-loading services even if they do not operate vessels.
If you want to open a company in Singapore and decide for Keppel District Park, our local advisors can help you.
The video below offers information on Singapore's free zones:
Considering all Singapore free zones offer similar operating conditions, choosing the appropriate economic zone for setting up a business can be difficult.
Here is some information on the characteristics of free zones in Singapore:
For assistance with the documentation and licensing for starting a company in a free trade zone, do not hesitate to contact our Singapore consultants in company formation. You can rely on us for personalized company registration services in Singapore.