Doing business in Singapore
Before entering the Singapore business market there are a number of factors to take into account including culture, politics and business etiquette.
Austrade can help Australian companies familiarise themselves with local market conditions, as well as assist in developing export opportunities through a range of in-market and Australian-based services.
There is extensive information about doing business in Singapore on this website. Please check the Singapore profile under 'Country Profiles.'
For further information, go to the following:
Trade in goods
SAFTA has resulted in the elimination of all tariffs on goods originating in Australia and Singapore.
Prior to SAFTA, Singapore levied import duties on a limited number of Australian products, in particular beer, ale, stout and porter. All Australian products that meet the Rules of Origin, including beer and stout, now enter Singapore tariff-free. (Other Singapore Government taxes and charges, if relevant, are still payable.)
Trade in services
SAFTA has provided a more open and predictable business environment for services trade.
Under the Agreement there are a number of benefits for important services sectors:
Education
Education services represent a significant part of current services exports to Singapore, with 9242 students undertaking courses at onshore Australian educational institutions in 2006, making Singapore Australia’s twelfth-largest market.
Under SAFTA, Singapore has provided full national treatment and market access commitments for university, adult and vocational and technical education, with only limited exceptions. Australian education providers can operate relatively freely in Singapore. Singapore government scholarships for overseas use are also tenable at Australian universities.
SAFTA also provides a framework for both Governments to encourage cooperation between Australian and Singaporean educational institutions in a number of areas, including technical education, vocational training, distance education and teacher training.
Financial Services
Singapore is committed to providing market access and national treatment across a range of financial services, including banking, insurance and capital markets. In addition, financial services suppliers may transfer to or process information in Australia, including through electronic means.
Restrictions on the number of wholesale banking licences available to Australian banks were removed on 1 January 2007. Investors are also protected against expropriation, with compensation for expropriation or other loss.
While access to the Singapore financial services sector has improved through its commitments under the General Agreement on Trade and Services (GATS) and under SAFTA, some restrictions remain and apply to the establishment and operation of foreign banks, wholesale banks, offshore banks, merchant banks, finance companies, and Fund Management Companies (FMCs). For example, foreign banks may only operate as Singapore branch offices of Singapore-incorporated companies, and finance companies and all insurance brokers may only do so as Singapore-incorporated companies.
Details of these restrictions are listed in Annexes 4-I (B) and 4-II (B) of SAFTA, and are summarised in Annex I of SAFTA - A Business Guide.
Legal services
Under Singapore’s existing regulatory system, foreign law firms may set up offices in Singapore to advise clients only on the laws of their home country or international law.
Under SAFTA, conditions on the establishment of joint ventures in Singapore involving Australian law firms have been eased. These conditions include requirements with respect to the number of foreign lawyers of the foreign law firm that must be resident in Singapore and how many years of experience those lawyers are required to have. The easing of these requirements will allow Australian law firms to compete on a level playing field compared with larger US and UK law firms.
The number of Australian universities with law degrees recognised in Singapore has increased from four to ten. These universities are: the Australian National University, Flinders University of South Australia, Monash University, the University of Melbourne, the University of New South Wales, the University of Queensland, the University of Sydney, the University of Western Australia, Murdoch University and the University of Tasmania.
Singapore has also bound liberal conditions of access for Australian law firms and lawyers in relation to the practice of Australian law, third country law, and international law.
Telecommunications
Singapore is a key player in global telecommunications, and was one of the first countries in the world to have a fully digital telephone network. The Singapore Government has, in recent years, sped up the liberalisation of its telecommunications sector. All restrictions on direct and indirect foreign investment were eliminated in April 2000 to promote full competition.
SAFTA establishes disciplines for telecoms regulation by both countries that expand significantly upon World Trade Organization (WTO) commitments. It provides greater transparency of decision-making, rights of appeal, effective enforcement by the regulator in Singapore, non-discriminatory pricing for interconnection and consultations with industry in development of standards and policy.
The Agreement also commits Singapore and Australia to maintaining effective sanctions to enforce competitive safeguards and regulatory decisions, and to facilitate consultation with industry participants, including in the development of industry standards.
The Singapore-Australia Free Trade Agreement has ensured that Australian firms have better access to Singapore’s government procurement market.
Although Australia is not a party to the World Trade Organization Agreement on Government Procurement (GPA), Singapore matches its commitments under the GPA for Australia, which guarantees non-discriminatory national treatment for Australian firms in tendering for Singapore Government business. SAFTA guarantees this access without the limits on thresholds and product coverage that are included in GPA.
Under SAFTA, Singapore is also committed to providing opportunities for government procurement to be undertaken through electronic means, or e-procurement. Intellectual property and confidential information supplied under tender processes are protected.
There are three different types of government tender: open, selective or limited. Tender notices are posted on the Singapore Government’s Electronic Business website at www.gebiz.gov.sg. The website also contains information on tender bids and tender awards.
Under the Singapore Australia Free Trade Agreement, Australian investors receive treatment in Singapore that places them on a par with domestic investors, except in areas specifically exempted under the Agreement.
Singapore does not operate a screening process for inward foreign investment, but maintains limited restrictions at the sectoral level. Formal restrictions apply in a few areas, such as broadcasting, the domestic news media, retail banking, legal and multi-level marketing, the licensing of some manufactured goods and property ownership.
All tariffs on Australian products exported to Singapore, including beer and stout, were eliminated as a result of the Singapore-Australia Free Trade Agreement (SAFTA). Goods may now enter Singapore tariff-free provided they meet the Rules of Origin outlined in Article 3, Chapter 3 of SAFTA. However, other Singapore Government taxes and charges, if relevant, are still payable.
Documentation needed by Australian exporters and importers
Goods must be accompanied by a valid Certificate of Origin and a declaration by either the exporter or manufacturer stating that the products are the produce or manufacture of Australia. The declaration can appear on the invoice of the goods or on a separate document.
Go to Article 11, Chapter 3 of SAFTA and Rules of Origin for more information.
Documentation needed by Singaporean importers
Singaporean importers to Australia are required to produce both a Certificate of Origin and the exporter’s declaration when the product enters the country. Further details of documentation requirements can be found in the Australian Customs Notice No.2003/49.
Classifications – Harmonised Commodity Classification Codes
Even if there is no tariff payment required for specific products and goods, the Australian Bureau of Statistics still requires that exporters apply for an Australian Harmonised Commodity Classification Code (AHECC).
AHECC codes – internationally recognised numbers used to classify goods for export - are available from the Australian Customs Service. The first six digits are part of an international standard – the ‘Harmonised System’ – and the final two digits are specific to Australian exports. An example of an AHECC code for an exporter of fresh lemons would be: 08 05.30.00.
The Rules of Origin define the originating country or ‘nationality’ of a product and determine whether a product is eligible for preferential treatment. For goods to be eligible and receive duty free entry under SAFTA, they must originate from Australia or Singapore and be accompanied by a Certificate of Origin.
For products from Australia or Singapore to be eligible for duty-free access into the other market, they must be:
- wholly obtained goods produced in Australia or Singapore; or
- goods wholly manufactured in Australia or Singapore; or
- goods partly manufactured in Australia or Singapore, provided that the following conditions are met:
- the last process of manufacture was performed in Australia or Singapore
- the goods have a minimum level of local content
- goods partly manufactured in Australia or Singapore, provided that the following conditions are met:
- the goods meet the accumulation provisions (see section below) and
- the goods have a minimum level of local content
Local value content
Under SAFTA, all products whether originating from Australia or Singapore need to meet a level of local value content. The minimum level of local value content for most goods is 50 per cent. However, a 30 per cent level of local value content applies to a limited number of electrical and electronic items and products subject to Tariff Concession Orders (not made in Australia). Goods subject to the 30 per cent local content threshold are listed in Annex 2 D of SAFTA and Attachment A of the Australian Customs Notice No. 2003/49.
Accumulation
Under SAFTA, 'accumulation’ is taken into account when working out the local value content. It permits all production costs incurred in Australia or Singapore at all stages of the manufacturing process to be taken into account when calculating local value content. This is even where the manufacturing process is interrupted by offshore processing, provided that the control or ownership of the material in question does not change before and/or after offshore processing.
The accumulation provisions under SAFTA apply to most goods. There are a few exceptions including a range of textiles, clothing and footwear, passenger motor vehicle items and jewellery.
Goods where accumulation provisions do not apply are listed in Annex 2 C of SAFTA, and Attachment B of the Australian Customs Notice No. 2003/49 Certificate of Origin.
Certificate of Origin
A ‘Certificate of Origin’ confirms that a product meets the guidelines of Rules of Origin. A valid certificate must accompany each shipment of goods otherwise penalties could apply and goods delayed. An Australian exporter and/or manufacturer can apply for a Certificate of Origin, which is valid for a period of two years from the date of issue, from the Australian Chamber of Commerce and Industry (ACCI) or the Australian Industry Group (AIG).
The emphasis of Chapter 5 of SAFTA – Technical regulations and sanitary and phytosanitary measures – is on Australia and Singapore working together to find the easiest and most cost effective way of trading. This is by aligning both countries' requirements and assessment of goods but without compromising Australia and Singapore's own standards and regulations.
Additional sectoral annexes to SAFTA covering horticultural products and food standards came into effect in February 2006. The annexes provided streamlined compliance and inspection arrangements for a number of approved products.
Horticultural goods
The Sectoral Annex on horticulture goods resulted in Singapore accepting Australia’s phytosanitary certificates, treatment certificates and/or test reports on horticultural produce. This is an important change for many Australian exporters because Singapore is a major market for Australian horticultural commodities and food products.
Australian importers are also affected: it is easier to import orchids and foliage from Singapore as they are no longer subject to mandatory fumigation requirements upon entry into Australia, provided that no actionable pests are detected. Further details on these products can be found at Australian Quarantine and Inspection Service (AQIS).
Food standards
The Sectoral Annex on food standards requires Singapore to accept Australia’s food standards as determined by Food Standards Australia New Zealand (FSANZ). The Australian Quarantine and Inspection Service (AQIS) and the Agri-Food and Veterinary Authority of Singapore negotiated conformity assessment arrangements for some food products which led to mutual recognition of conformity assessment certificates. This process will be ongoing.
The AQIS website provides a simple reference tool that details the requirements for importing and exporting to and from Australia and Singapore. Information is available on this site about the legislative restrictions and conditions for the export of plants and plant products from Australia, importing country conditions and restrictions, Australian Phytosanitary Certification and other relevant export information.
A significant proportion of Australia’s merchandise trade with Singapore is subject to regulation. Traded goods subject to mandatory technical regulations in the country of import often need to be tested and/or certified for compliance with those requirements by a body located in that country.
In the past, for example, electrical and electronic equipment manufactured in Australia couldn't be sold in Singapore unless the Standards Productivity and Innovation Board (SPRING Singapore) and/or the Singapore Public Utilities Board approved the items for sale. The cost of obtaining a test report and certificate of approval for a new product line added to the costs of exporting and therefore increased prices paid by consumers in Australia.
Mutual recognition agreement (MRA)
To help reduce costs to Australian manufacturers and exporters and remove barriers to the movement of goods between Australia and Singapore, the Australian Government has been encouraging the Singapore Government to recognise Australia’s standards and conformity assessment procedures.
In 2001, Australia and Singapore signed a mutual recognition agreement (MRA) on conformity assessment.
The MRA on conformity assessment provides for mutual recognition of the results of conformity assessment activities in three sectors: medicinal products (good manufacturing practice), electrical and electronic equipment, and telecommunications equipment. This enables assessment of these products and/or manufacturers to be performed in Australia prior to export, to ensure that they conform to standards and legal requirements in Singapore, and thereby reduce the risks, time delays and costs associated with obtaining regulatory approvals in Singapore. The designating authorities are set out in the MRA.
The Singapore-Australian Free Trade Agreement builds on the MRA on conformity assessment and provides a framework for determining equivalence of Australian and Singapore standards and requirements. It also commits Australia and Singapore to working towards harmonisation of their mandatory requirements consistent with international standards and guidelines.
The Singapore-Australia Free Trade Agreement streamlines the movement of business people between the two countries.
People engaged in any business, profession, or any form of paid employment in either Singapore or Australia need to get appropriate authorisation. In Singapore this is an immigration and employment pass; in Australia it is a visa.
Under SAFTA, business people from either country can:
- Visit for an initial period of up to three months to negotiate the sale of goods or services, establish an investment, or fulfil a short-term contract for their company.
- Apply for an initial visa period of two to four years, extendable on application to at least 14 years, if they are long-term business residents.
Accompanying spouses and dependants of long-term business residents have a guaranteed right to work in job categories defined as managers, specialists and office administrators. |