Looking to get into trading but not sure where to start? Or maybe you’re already trading in Singapore but would like to up your game? Whatever your level of experience, these tips will help you become a more successful trader.
Tip 1: Get to know the Singapore market and plan your business carefully
When starting a business, it is important to know all there is to know about the market you will be trading in. This includes understanding the legal and economic environment, as well as the culture of your customers.
Singapore is a thriving economy with a rich culture and a highly developed infrastructure. However, it can be difficult to do business in Singapore if you are not familiar with the market. In order to be successful, it is important to plan your business carefully and understand the specific needs of the Singaporean market. Do research the following factors before getting your trading business started:
Free-trade agreements (FTAs)
Singapore’s free-port status makes it a highly competitive entrepot for importers globally, with China, Hong Kong, and the US being key stakeholders within the city-state’s burgeoning FTA network.
The catalyst for this commercial conductivity? Enter the most important acronyms in global trade: FTA.
Or, more commonly known as “Free Trade Agreements” which are bilateral agreements signed by two or more countries to facilitate non-tariff trades or to provide protection for a member’s domestic goods from overseas competition.
Singapore boasts an impressive 420 regional trade agreements that are currently in effect, making it one of the most prominent trading hubs in the region. But knowing which one to look out for can provide your business with prime leverage for growth.
When targeting Singaporean consumers, it is important to remember that they are price-sensitive and often look for the best deals. Therefore, it is important to highlight the value of your products and services. Additionally, be sure to emphasize the quality of your offerings, as Singaporeans are known for their high standards.
The liberal trading status of Singapore is not without its protection, however, as there are plenty of trading barriers in place to ensure utmost alignment with its social and economical guidelines.
Singapore is an ardent believer in a zero-carbon future. In this respect, the country’s legislative journey has by far been consistent with this goal. Bulk imports of motorcycle are now targeted for a tiered registration system – and an engine displacement-based licensing system to boot!
Commodities that pose indirect threats to its environmental integrity like non-medicinal chewing gums, spirits/wines, and tobacco-related products are also met with high excise taxes. Other emerging sectors like legal services, banking, and cloud computing for financial institutions also have barriers imposed to better regulate them.
While Singapore presents an ideal logistical infrastructure for trading commodities — a trading company is still, nonetheless, a company – and is therefore subject to its own set of tax obligations.
Typical taxes that can make their way to your door are income tax, goods and services tax (GST), and stamp duty. Note that income tax applies regardless of whether your trading company receives its income in or outside of Singapore. But this is not a deterring prospect at all if you take into account the extensive tax reliefs to negate double taxation.
Knowing what tax obligations you have as well as the grants that you’re entitled to is crucial in helping your business stay afloat and operate in tip-top condition.
Tip 2: Legitimize your business
Incorporate a company
When it comes to company incorporation in Singapore, there are a few key reasons why it’s important. First and foremost, incorporation offers companies legal protection. This means that the company is seen as a separate legal entity from its owners and shareholders.
This can be incredibly important if the company is ever sued – the owners and shareholders would be protected from any legal action taken against the company.
Incorporation can also make it easier to raise money. For example, if a company is looking to issue shares or take on debt, it will be much easier to do so if it is incorporated. This is because potential investors and creditors will feel more confident investing in or lending to an incorporated company.
Finally, incorporation can help companies to grow and expand. By establishing a separate legal entity, companies can protect their assets and make it easier to merge with or acquire other businesses. This can be a valuable tool for companies that are looking to grow and expand their operations.
There are a few common business structures for Singapore trading businesses. The most common is the limited liability company (LLC). This type of company offers limited personal liability to its shareholders and has a flexible management structure.
It is also easy to set up and maintain. Other popular options include the private limited company and the sole proprietorship. These structures are more appropriate for businesses that are not planning to raise capital or issue shares. It is important to choose the right business structure for your company, as it will impact both your taxes and your liability.
Get relevant licenses
Singapore is a country that is well known for its strong economy. In order to maintain this strong economy, the Singaporean government has put in place various laws and regulations to protect the interests of its citizens and businesses. One such law is the prohibition of unlicensed trading activities.
If you’re looking to set up a trading company in Singapore, you’ll need to get the relevant licenses and permits from the authorities. The process can be bureaucratic and time-consuming, so it’s important to make sure you have everything in order before starting your business. There are a few different licenses you may need, depending on the type of trading you plan to do.
The most important license is the Trading License, which is issued by the Monetary Authority of Singapore (MAS). This license allows your company to trade in goods and services, and to conduct financial activities such as money changing and foreign exchange. To get this license, you’ll need to submit an application form along with all the required documents, such as your company’s registration certificate and articles of incorporation.
Another important license is the Import/Export License, which is issued by the Singapore Customs. This license allows you to import and export goods into and out of Singapore. You’ll need to provide detailed information about your company and its products, as well as a copy of your Trading License.
There are also a number of other licenses and permits you may need, depending on the type of trading you do. For example, if you’re importing or exporting food products, you’ll need to get a Food License from the Ministry of Health. So it’s important to do your research and make sure you have all the necessary licenses before starting your business.
Tip 3: Comply with legal requirements for a trading business
As a Singapore trading company, it is important to be aware of the various legal requirements that must be complied with in order to ensure a smooth and trouble-free operation. Some of the key areas that need to be taken into account include corporate compliance, tax planning, and accounting, foreign exchange controls, and export and import procedures.
The main regulatory authority governing trade in Singapore is the Trade Control Division (TCD) of the Ministry of Trade and Industry (MTI).
The TCD imposes a number of restrictions on the export and import of goods, including:
- The export of strategic items such as arms, munitions, and nuclear materials is strictly controlled
- There are restrictions on the export of certain animal and plant species
- The import of certain items, such as weapons and pornography, is prohibited
In order to comply with these requirements, you will need to obtain an export/ import license from the TCD. The application process is relatively straightforward, and the TCD will usually respond within a few weeks.
Tip 4: Source the best suppliers
A Singapore trading company may be interested in sourcing suppliers from China. There are a few things to consider when looking for a supplier. The most important thing is to find a supplier that can meet the needs of the business. Some factors to consider include quality, price, delivery time, and shipping costs.
There are a number of ways to find a supplier in Singapore. One way is to use an online sourcing platform. These platforms are a great way to connect with suppliers and compare prices. Another option is to contact local trade associations or chambers of commerce. They can often provide a list of local suppliers.
When choosing a supplier, it is important to do your due diligence. Ask for references and check them. Make sure the supplier has a good reputation and is reliable. Also, be sure to get a good understanding of the supplier’s quality control procedures.
Tip 5: Plan logistics
Logistics is everything in trading, you need to make sure you have the keynotes for logistics management for your Singapore trading business in place to ensure smooth operation. You should consider how it will handle shipping and customs procedures, as well as the storage and distribution of products. It is also important to have a good relationship with local suppliers and freight forwarders.
A good logistics plan will help your business run smoothly and efficiently. It will also help you to save money by streamlining your operations. When creating your plan, be sure to consider key aspects like product type, delivery area, transportation options, budget, and so on.
Tip 6: Manage risks
A Singapore trading company needs to be aware of the many risks it faces when doing business. It is important to have a risk management plan in place to help mitigate these risks. This may include things like insurance policies, contract clauses that protect the company, and procedures for dealing with unexpected events. Risks can come from a variety of sources, including fluctuating currency values, political instability, and natural disasters.
- Political Risks
- Legal Risks
- Credit & Financial Risk
- Quality Risk
- Transportation and Logistics Risk
- Language and Cultural Risk
There are a few things you can do to help manage these risks. Firstly, make sure you have a good understanding of the risks involved in your industry, and what could happen if they were to materialize. Secondly, have a solid risk management plan in place, which includes measures to protect your business against potential losses. Finally, keep a close eye on market conditions and make changes to your trading strategy as needed.
A successful Singapore trading company can provide great opportunities for investors and traders. By following these tips, you can make the most of your trading experience with a Singaporean company. Make sure to do your research before investing, choose a reputable and reliable company, and be patient in order to maximize your profits.
If you are looking to start trading in Singapore, or are simply interested in finding out more about the process, please do not hesitate to contact us. Our team of experienced professionals would be happy to assist you with all your trading needs.
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
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