Setting Up a Shop: Business Regulations in Singapore (2023)

Time to read: 6 minutes

In general, Singapore has a friendly approach to international trade. Companies, even small ones, generally have no problem establishing themselves and domestic consumers are usually open to products manufactured abroad.

That said, it's a good idea to familiarize yourself with some of the important trading laws in Singapore before entering the market.

We will answer the most important question at the beginning of this article: why choose Singapore? Then we dive into Singapore's surprising trade barriers. We end with a practical overview of what it takes to make a mark in the physical or online marketplace, including international currency transfer options.

• Why choose Singapore?
• Trade Barriers and Regulations in Singapore
• Set up shop in Singapore

Why choose Singapore?

In a literal world of opportunity, why would companies choose Singapore as their destination for expansion? The answer lies primarily in Singapore's reputation as an accessible business center.

A sovereign island city-state, Singapore is located at the southernmost tip of the Malacca Peninsula in Southeast Asia. It is a free port, a free trade zone: companies generally pay low taxes to stimulate economic activity. The working language is English, so communication is easy. This city-state's skilled workforce makes it an obvious choice for the most demanding manufacturing companies.

Let's take a look at some of the top reasons why businesses love Singapore.

Advantage 1: Low taxes

First,Singapore operates under a territorial tax system, which means income from Singaporean sources is taxed. In addition, companies are required to register for the Goods and Services Tax (GST) if their taxable turnover exceeds SGD 1 million per year. GST is a value added tax levied on the supply of goods and services in Singapore, andcurrent rate is 8%.

In addition to GST, Singapore also has a corporate income tax (CIT) system, where companies are taxed on income earned in Singapore. Hethe current VAT rate is 17%, usually lower than in the United States. Singapore also offers various tax credits and benefits to businesses, including tax credits for start-ups, partial tax credits for small and medium-sized enterprises, and tax credits for industries. .

If you are a US citizen and have a business in Singapore, please note that you still need to comply with US tax laws. This means that you must declare your foreign income and assets on your tax return to the Tax and Customs Administration. The good news is that there is a tax treaty between the US and Singapore to avoid double taxation. So, depending on the circumstances, youcan claim foreign tax creditsto offset your US tax liabilities.

But as always, it's worth consulting a tax professional familiar with US and Singaporean tax laws to make sure you're complying with all applicable rules.

Advantage 2: booming economy

Global praise for Singapore abounds in the business world. According toGlobal Talent Competitive Index (GTCI) 2022Singapore is the second most competitive country in terms of talent. In 2022, the World Bank also ranked Singaporethird on his listone of the best countries to do business.

Singapore's economy is not just growing, it's thriving. Finance, trade and manufacturing make up a large part of its economic activities, and government initiatives for businesses (especially, as we mentioned earlier, for small businesses) are designed to encourage foreign investment.

Advantage 3: trained personnel

Singapore has a low unemployment ratejskilled workforce;people are very polite, and most people benefit from access to quality higher education institutions. In general, students graduate from universities and enter the world of work with excellent qualifications.

Foreign companies in the biomedical sciences, logistics, chemistry, electronics and transport engineering sectors benefit greatly from opening stores in Singapore. It is relatively easy to obtainSingapore Entrepreneur Visa (EntrePass). You must ensure that you meet the relevant criteria, can demonstrate that you own at least 30% of the shares in your company, have received funding and have an innovative company that can create jobs.

Trade Barriers and Regulations in Singapore

As a free port, Singapore is not known for its strict trade rules, but for the ones thatrobimay seem unusual, at least at first glance. Here are some of the more interesting constraints companies face when they expand to Singapore.

motorcycle obstacles

in Singaporea multi-level licensing system for motorcyclistsbased on engine power. Road tax on motorcycles in the country is also based on engine power. Result? Engine manufacturers sometimes struggle to expand in the region due to the lack of demand for high-performance engines.

alcohol imports

Alcohol rates in Singapore are generally higher than in the USSingapore, tax charges depend on the type of alcoholtoo much alcohol per litre.

What is the US-Singapore Free Trade Agreement?

OpUnited States-Singapore Free Trade Agreement (USSFTA)came into effect in 2004 and removed tariffs and other trade restrictions between the United States and Singapore. The agreement covers several sectors, including telecommunications, information technology and financial services.

In addition to protecting intellectual property rights, it has the resources to enforce labor and environmental laws. With the implementation of the USSFTA, there has been an increase in investment and trade between the United States and Singapore. Americanexports to Singapore increased by 13.3%only in the last year.

Started an e-commerce business in Singapore

Setting up an ecommerce business in Singapore is simple and easyusually lasts one to three days. US companies can register atOffice of Accounting and Business Regulations(ACRA) and receiveunique entity number(UN). From there, they can set up a website and start selling products.

However, businesses should be aware of some important laws that apply to e-commerce. For example, companies must comply with laws in Singapore.Personal Data Protection Act (UODO)and obtain customers' consent before collecting and using their personal information. Companies must also comply with thisElectronic Transactions Act (ETA)and issue electronic receipts and invoices.

Lazada and LazMall: Online marketplaces in Singapore

Small businesses looking to sell online to consumers in Singapore usually set up profiles on Lazada. Foreign SME owners with successful LazGlobal trading accounts can apply for LazMall accounts after six months.

Here is a detailed description of how to set up a LazGlobal Seller Lazada account on the marketplace:

1. Setting up a company in Singapore:Before you do anything else, set up a branch in Singapore and make a logistics and shipping plan.
2. Create an account with Lazad: Go to the Lazada websiteand create a new LazGlobal reseller account.
3. Provide all required documents:To open a LazGlobal Merchant Account, you must provide valid proof of identity, company VAT number, proof of your business address, proof of business registration and other documents.
4. Create your Lazada store:Once your account is approved, you can create a Lazada storefront and upload it with your products.
5. Consider Hong Kong compliance:You can ship products directly to consumers who shop at your store or store them at the Lazada distribution center in Hong Kong. If you choose the second option, Lazada will fulfill your requests (for a fee).
6. Link a direct debit account:To recover funds from your Lazada account, you must link a collection account:AderFor example, an account is easy to create and there are no subscription costs or a minimum deposit.

withdraw money from singapore

Ready to expand to Singapore? In this case, you will almost certainly have to move money in and out of the country. Currency transfer options include:

• Banks on the main street:Until recently, traditional bank transfers were the most accessible currency transfer partners for businesses. Unfortunately, bank charges can be expensive and SWIFT slow, especially between the US and Southeast Asia.
• Companies that need:Digital currency transfer partners like Zyla can transfer funds quickly and offer an alternative to face-to-face banking.

At first glance, traditional bank transfers seem reassuringly simple. But the costs can quickly add up and affect your profit margins. To preserve as much capital as possible, many business owners choose trusted payment partners before expanding internationally.

Expansion to Southeast Asia with Zyla

If you have been successful in the United States, you may decide to expand abroad. Singapore is an excellent destination for US business expansion because it has a dynamic economy, a favorable attitude towards international trade and an open consumer base.

Entering a new market requires practical planning. Before you start trading with wholesalers or opening new accounts on the exchange, think about how you are going to move your money between Singapore and the United States.

The Zyla account is an easy way to pay trading partners and receive payments from the markets quickly.

• Open multi-currency accounts with local account information
• Make fast and secure global payments to suppliers, employees and partners
• Collect money from sales in the market
• Keep costs low with competitive rates

Zyla's free account allows businesses to collect and pay internationally, giving you the freedom to do business anywhere, all with the security of our online platform.Open an account today and you can be approved, set up and trading internationally within 24 hours.To start or find out by calling(855) 797-3366Hallo.