The import of foreign goods usually is done through established trading firms that have branches in Singapore and throughout Singapore's marketing area. These firms handle sales and after-sales servicing and offer technical and engineering assistance. For an exporter, the after-sales support is of prime importance in gaining the confidence of a purchaser who may feel apprehensive about buying the equipment from a manufacturer thousands of miles away. To be assured of this product support, care should be taken in selecting an agent. It is frequently accomplished by the assignment of a company representative on the premises of the Singapore trading firm. This company representative is responsible for before- and after-sales supervision of distributors. This is a valuable function, since a large trading company may handle the product lines of several hundred foreign suppliers involving several thousand items. The smaller firms may be just as diversified or specialised by product or industry.

Singapore trading companies offer many services. They will maintain spare parts inventories, provide maintenance services, sell goods or process indent orders, and market to both wholesalers and retailers. It is left to foreign exporting firm to locate an agent who can best fulfill its marketing needs and then to support and supervise that agent to assure the use of aggressive selling techniques. As an alternative, if volume is substantial, foreign exporters may find it advantageous to open a branch in Singapore.

Sales to government agencies may be made in response to international tendering. The importance of this practice is decreasing as foreign suppliers find it easier and more lucrative to deal through local agents or branches.

Distribution Practices
One agent or distributor generally is sufficient for the Singapore market. The practice of exclusive appointments is common for Singapore. Some agents and distributors appoint subagents in neighboring markets.

Due to Singapore's small size, there are few large wholesalers. Small wholesalers usually will supply credit to retailers who agree to stock their products. Larger trading companies may handle wholesaling as well as retailing. Since Singapore is a regional distribution center, trading companies often serve a far wider market than just Singapore.

Generally speaking, there is no restriction on the types of businesses that may be set up in Singapore. However, there are some areas of business which require special authorisation or licencing. Such businesses are allowed to register only after they have obtained the requisite authorisations. For financial industries, such as insurance, banking, securities brokerage and trading, and related financial services, approval is required from the Monetary Authority of Singapore.

Approval and licencing for specified manufactures included in the First and Second Schedules of goods listed under the Control of Manufactures Act are as follows: motor vehicles, detergents, some tobacco products, matches, some alcoholic beverages, fireworks, certain iron and steel products, airconditioners and refrigerators. The information can be obtained from the Registrar of Manufactures of the Economic Development Board. Every business in Singapore must be registered with the Registry of Companies and Businesses. This requirement also applies to any firm, individual or corporation which carries on business as a nominee, trustee or agent for any foreign corporation.

Types Of Organisations
The types of business organisations which may be registered in Singapore are:

Under the Business Registration Act:

· Sole proprietorships
· Partnerships

· Incorporated companies

· Foreign companies.

Under the Companies Act:

Sole Proprietorships
Any individual may start his own business provided that he registers with the Registrar under the Business Registration Act, Cap. 32.

Any number of people up to a maximum of 20 may enter into a partnership, which must be registered with the Registrar.

In the case of both a sole proprietorship and a partnership, before a business can be registered, the applicant proprietor/partner should make an application to the Registry to ensure that the proposed name is available. Sole proprietorships and partnerships are not corporate bodies. There is no requirement for filing annual accounts in respect of proprietorships and partnerships but their registrations have to be renewed annually.

Incorporated Companies
The basis of company law in the Republic of Singapore is the Companies Act (Cap. 50). Under this Act, any two or more persons associated for any lawful purpose may form an incorporated company by subscribing their names to a memorandum and complying with the requirements for registration. However, it becomes mandatory to register as a company once an organisation, association or partnership whose object is to realise profits or gains, has more than 20 members.

Three types of companies may be formed under the Act:

· A company limited by share: The liability of members of such a company is limited to the amount paid and unpaid (if any) on the shares held by them. (This is the normal type of company formed for carrying on business for the purpose of gain or profit.)

· A company limited by guarantee: This liability of members is limited to the amount they individually undertake to contribute to the assets of the company.

· A unlimited company: The liability of members is unlimited

· A company may be either private or public. A company having a share capital may be registered as a private company if it does not have more than 50 shareholders, restricts the right to transfer shares, and prohibits any invitation to the public to subscribe to its shares and debentures or to deposit money with it. Otherwise, the company becomes a public company. A limited company must have either "Berhad" or "Limited" as part of and at the end of its name. A private company must have the word "Sendirian" or "Private" as part of its name, inserted immediately before the word "Berhad" or "Limited" or, in the case of an unlimited company, at the end of its name. A public listed company may, subject to legal and listing requirements, invite the public to subscribe for I>its shares or debentures.

Foreign Companies
Every foreign company shall, before it establishes a place of business or commences to carry on business in Singapore, lodge with the Registry of Companies and Businesses for registration.

A foreign company must have a registered office in Singapore which must be open and accessible to the public during ordinary business hours on each day, Saturdays, weekly and public holidays excepted. The agent of a foreign company is answerable for the doing of all acts, matters and things as are required to be done by the foreign company under the Act and is personally liable for any penalties imposed on the foreign company for any contravention of such requirements.

The Singapore Companies Act (Cap.50) regulates corporate organisations in Singapore and, in many ways, is similar to both the English and Australian Companies Acts. Its provisions regulate the activities of both private and public companies.

Trade Representative Office
A foreign company may establish a representative office in Singapore to undertake promotional and liaison activities on behalf of its parent company. Approval for the establishment of a representative office must be obtained from the Trade Development Board. The functions of a representative office will include one or more of the following:

· Liaison with sales agents and customers in Singapore and other countries.

· Soliciting orders for products or services; orders to be accepted by a supply/base office outside Singapore.

· Providing market intelligence to base office.

· Advising purchasers on the optimum use of products or services.

· Promoting market awareness of products and services and assisting where appropriate in the planning of advertising and promotional activities.

While economic growth continued to be drive disproportionately by external demand, the contribution from domestic demand improved in 1995. Domestic demand accounted for 16 per cent of the growth in total demand compared with 3.2 per cent in 1994. This was due to faster growth in consumption expenditure and a slower decline in stocks.

External demand for goods and services grew more slowly at 14%, compared with 21% in 1994. This was due to slower growth in both exports of merchandise goods as well as exports of services. The slower growth in external demand was in line with slower growth in our major markets. The bright spot was in exports of electronics due to strong demand, including demand for personal computers and integrated circuits from the Japanese markets. Oil exports were weak due to strong competition from regional refineries as well as poor refining margins which led to temporary cutbacks in production. Growth in exports of services slowed down to 4.6%. This was largely due to lower growth in freight receipts, and other transportation-related receipts like passenger fares and aircraft repairs. Receipts from ship repairs declined due to the weakness in the global ship repair industry. Growth in travel receipts was moderate, and in line with the slowdown in growth of visitor arrivals.

Domestic demand grew faster at 8% due mainly to slower decline in stocks (inventories). Growth in private consumption expenditure was moderate while growth in private investment remained below the double-digit growth in the early 1990s.

The volume of total trade grew by 15 % in 1995 compared with 21% in 1994. Export volume grew by 16% against 28% in 1994 with domestic exports and re-exports expanding by 14% and 19% respectively. The volume of imports rose by 14% compared with 15% in 1994.

Non-oil domestic exports grew more slowly at 14%, with mixed performances in the key markets. Despite slowing economies, the US and EU markets recorded good growth as the global electronics cycle remained favourable. Exports to Japan were boosted by the strong Yen as well as healthy electronics demand, particularly for personal computers and integrated circuits. However, the Hong Kong market was weak largely due to the slowdown in the colony. The weak performance in the Malaysia market reflected the relocation of lower and manufacturing activities there, greater sourcing of electronics components from other sources as well as improved domestic industrial capabilities.


Following the ratification of the World Trade Organisation (WTO) Agreement by 112 countries in 1995, there will be greater market access for Singapore's goods and services due to the greater transparency of access and the establishment of a more efficient and expeditious dispute settlement mechanism. Trade and Development Board estimated that the full implementation of the Uruguay Round tariff reductions by Singapore's top four export markets, namely US, Malaysia, EU and Japan, will result in potential tariff savings amounting to US$333 million.

In addition, the 1995 ASEAN Summit saw the signing of the new agreements on initiatives to expedite the actualization of AFTA by the year 2003 instead of the previous en-date of 2008. The Summit also formalised the expansion of ASEAN economic cooperation in areas of services, industries and intellectural property. Specificially, the AFTA product coverage has been broadened to include unprocessed agricultural products. In addition, all items in the Temporary Exclusion List (TEL) will be subjected to a time frame of five years (ending year 2000) to be phased into the Inclusion List through an annual equal instalment of 20% per year of all TEL products.
During the year, the member economies of ASEAN initiated the reduction of tariff rates as part of their commitments to the Common Effective Preferential Tariff (CEPT) Scheme for AFTA. In particular, the member countries have committed to a CEPT ending rate of zero per cent by year 2003 and to maximise the number of items with tariff rates of zero per cent or between 0-5% in the year 2000.

The aim was to adopt an Action Agenda that would begin the momentum for realising the Bogor vision for free trade in APEC by the year 2020. The Osaka Action Agenda sets out the framework for future APEC activities as well as provides a set of principles and specific actions targeted at trade and investment liberalisation and facilitation, and economic and technical co-operation. Much of the Action Agenda is geared towards facilitating business and reducing costs of doing business in the region.
As a demonstration of commitment, the Leaders announced a "down-payment" of measurement for immediate implementation. These measures are designed to accelerate, deepen and broaden APEC members' Uruguay Round commitments, to deregulate their economies as well as to harmonise and enhance the efficiency of customs procedures and to promote mutual recognition and improve conformity assessment capablities.

In 1995, the EU initiated anti-dumping and anti-circumvention investigations on Singapore's exports of video-cassette recorders and 3.5-inch floppy diskettes respectively. Singapore participated in the Meeting of the WTO Committee on Anti-Dumping in October 1995 to register her concerns with the WTO-inconsistnet aspects of the EU's Anti-Dumping Regulation, and in particular, the provisions on anti-circumvention.
Austria, Finland and Sweden were admitted to the European Union (EU) on 1 January 1995. As a result of the harmonisation of their external tariffs with those of the other EU member states, Singapore faced a net increase in tariffs on its exports to Sweden. However, this was counter-balanced by the net decrease in tariffs on exports to Austria and Finland.

Singapore's External Trade
Annual Percentage Change At 1990 Prices

1993 1994 1995
Total 18.3 20.8 14.9
Imports 19.0 14.7 12.7
Exports 16.0 23.0 13.7
Domestic Exports 16.7 17.0 11.2
Oil 15.5 11.0 0.1
Non-Oil 15.0 23.0 13.7
Re-Exports 19.5 33.0 17.4

Source: Department of Statistics/Singapore Trade Development Board
Note : Figures in 1994 were slightly inflated due to improved coverage arising from the implementation of GST from 1 April 1994.

In 1995, exports rose by 14% to $168 billion compared with 23% in the previous year. This was due to slower growth in domestic exports and re-exports. Domestic exports increased by 11% while re-exports grew by 17%. Oil exports continued to decline due to weak oil prices and strong competition from regional refineries.

Domestic Exports
Non-oil domestic exports grew more slower at 14%, with mixed performances in key markets. The growth was due mainly to buoyant global demand for electronic/computer and related products, specifically disk drives, integrated circuits, parts of data processing machines, desk top microcomputers, printers, colour televisions (CTVs), radio-telephonic and radio-telegraphic receivers and capacitors. However, domestic exports of parts of Tvs and radios, portable microcomputers and parts of video cassette recorders (VCRs) declined.

In volume terms, domestic exports of oil grew marginally by 0.1 %. In value terms, domestic exports of oil declined by 1.9% to $13.7 billion. The weak oil trade was largely due to depressed oil prices which fell by 2% in 1995 and strong competition from refineries in the region. Domestic exports of oil to Malaysia declined by 8.8% while that to Hong Kong grew by a marginal 4.7 %. These top two oil markets accounted for about one-third of total oil domestic exports.

Re-exports grew by 17% to $69 billion compared with 33% in 1994. The growth in re-exports was mainly in integrated circuits, parts of data processing machines, parts of VCRs, transistors, parts of Tvs and radios and printers. However, re-exports of disk drives, video recorders and reproducers and CTVs declined.

Major Export Markets
Malaysia, the US, EU, Hong Kong and Japan were Singapore's top five export markets in 1995, accounting for 67% of our global exports. Malaysia was our largest export market in 1995 with a share of 19%, followed by the US (18%), EU (13%), Hong Kong (8.6%) and Japan (7.8%). They remained our top five markets in terms of non-oil domestic exports and accounted for 76% of the total. The US was our largest market with a share of 28%, followed by the EU (18%), Malaysia (14%), Japan (9%) and Hong Kong (7%).

Singapore's Major Exports

(Value S$ thousand)
Commodity 1994 1995
Data processing machines 22,319,058 27,675,103
Electronic valves 18,340,954 26,052,260
Petroleum products refined 13,544,897 13,342,098
Parts for office & DP machines 11,224,278 12,607,995
Telecommunication equipment 9,261,042 9,737,449
Electrical machinery nes 2,935,805 3,576,864
Electrical circuit apparatus 3,166,701 3,472,323
Video & sound recorders etc 3,574,375 3,203,997
Radio-broadcast receivers 3,505,510 2,972,870
Television receivers 2,517,883 2,452,312
Others 56,936,713 62,421,433
Total 147,327,216 167,514,704
Source: Singapore Trade Development Board
 Singapore's Top Ten Exports Destinations

(Value S$ thousand)
Country 1994 1995
Malaysia 29,089,492 32,124,858
United States 27,637,016 30,546,542
Hong Kong 12,814,240 14,352,171
Japan 10,342,561 13,066,198
Thailand 8,186,289 9,671,771
Taiwan 5,939,544 6,822,313
Germany, Federal Republic of 5,229,837 5,666,275
Korea, Republic of 3,870,860 4,596,540
Netherlands 3,930,880 4,461,178
United Kingdom 3,985,050 4,351,841
Others 36,301,416 41,855,010
Total 147,327,215 167,514,697
Source: Singapore Trade Development Board

Non-oil imports grew by 14% to $162 billion compared with 16% in 1994. The growth was largely in integrated circuits, parts of data processing machines, parts of VCRs, electronic components, blank computer tapes and discs, DC motors and printed circuits. There were imports of vessels and cars in the year. On the other hand, imports of disk drives, parts of Tvs and radios, CTVs and VCRs declined.

In 1995, Japan remained our largest non-oil import source, accounting for 23% of total non-oil imports, followed by the US (16/5). Malaysia (16%) and EU (14%). Non-oil imports from Japan and Malaysia grew by 8.5 and 6.6% respectively. Those from the US grew by 12% while those from EU increased by 16%.

Singapore's Major Imports
(Value S$ thousand)
Commodity 1993 1994 1995
Electronic valves 14,649,530 22,314,705 30,284,312
Parts for office & DP machines 5,947,292 6,681,430 10,534,512
Petroleum crude 10,362,893 8,929,058 9,189,859
Telecommunication equipment 6,398,902 7,581,939 8,470,133
Data processing machinest 5,568,927 7,749,478 7,439,264
Petroleum products refined 4,497,407 4,808,820 4,960,904
Electrical circuit apparatus 3,461,510 4,439,207 4,914,988
Electrical machinery nes 2,648,059 3,830,083 4,271,723
Specialised machinery nes 2,207,496 2,664,697 3,055,128
Musical Instrument and Parts 1,631,733 1,820,389 2,590,974
Others 80,229,000 85,575,988 90,601,686
Total 137,602,782 156,395,794 176,313,483
Source: Singapore Trade Development Board

Singapore's Top Ten Imports
(Value S$ thousand)

Country 1994 1995
Japan 34,422,087 37,288,427
Malaysia 25,599,966 27,285,025
United States 23,901,854 26,470,332
Thailand 7,470,802 9,096,623
Korea, Republic of 5,985,541 7,652,369
Taiwan 6,018,219 7,250,879
Germany, Federal Republic of 5,269,578 6,127,164
Hong Kong 5,285,431 5,820,752
China, People Republic of 4,411,992 5,729,537
Saudi Arabia 5,607,028 5,379,792
Others 32,423,292 38,212,576
Total 156,395,790 176,313,476
Source: Singapore Trade Development Board

Singapore has traditionally adopted a free trade policy. It has one of the most open trading regimes in the world. The trade regime is kept very liberal, with no tariff or non-tariff barriers imposed to protect domestic industries. Almost 96 per cent of all imports enter Singapore free from tariffs and other border measures. There are therefore minimum trade regulations.

Trade Legislation
From 1 December 1995, The Regulations of Imports and Exports Act (Act 24 of 1995) will come into operation. It will replace the Control of Imports and Exports Act (Chapter 56) (CIEA) and the Registration of Imports and Exports Act (Chapter 270) (RIEA).
Also from 1 December 1995, the subsidiary legislation made under the Control of Imports and Exports Act (Chapter 56), and Registration of Imports and Exports Act (Chapter 270) will be replaced by the following Regulations made under The Regulation of Imports and Exports Act (Act 24 of 1995):
· The Regulation of Imports and Exports Regulations 1995;
· The Regulation of Imports and Exports (Licensing) Regulations 1995;
· The Regulation of Imports and Exports (Montreal Protocol) Regulations 1995;
· The Regulations of Imports and Exports(Chewing Gum) Regulations 1995;
· The Regulation of Imports and Exports (Composition of Offcences)
· Regulation of Imports and Exports (Prescribed Fees) Regulations 1995 (with effect from 1 January 1996)

The Regulation of Imports and Exports Act 1995 (Act 24 of 1995) consolidates and updates the CIEA and RIEA. It provides for the registration, regulation and control of all imports into and exports from Singapore. A single Act avoids duplication of provisions and will facilitate the administration of our import and export trade. The Minister for Trade and Industry has designated the Singapore Trade Development Board as the authority to administer these legislation.

Under the Registration of Imports and Exports Act and its subsidiary legislation, all goods imported into, exported from, transhipped in or in transit through Singapore must be registered. Companies intending to import or export goods are required to submit Inward or Outward Declarations to the TDB, which endorses these Declarations. Consignments must be accompanied by these Declarations, or Import or Export "Permits" as they are now called, before entering or leaving the Customs area. These declarations/permits provide the necessary information for documenting Singapore's trade flows. Certain goods are exempted from documentation. These include personal or household effects which accompany the passenger, goods imported by the Singapore Armed Forces, etc, as defined under the "UN International Trade Statistics : Concepts and Definitions (Statistical Papers, Series M No 52, Rev 1)".

Trade and Industry is empowered to regulate the import, export or transhipment of goods in Singapore. However, the Act is invoked only where it is necessary to control trade in line with Singapore's international obligations.

The Minister for Trade and Industry has also exercised his powers under the Act to prohibit trade in goods such as crocodile hides and ivory, as part of Singapore's commitment to preserve and protect endangered species of wildlife, and to control trade in chlorofluorocarbons and halons. These controls are administered through the TDB.

The ban on South Africa was lifted on 6 March 1992. Singapore follows the UN sanction on Iraq which was effected in August 1990. The Prohibition of Exports (Libya) Order 1993 came into operation on 5 March 1993. The Order prohibits the exports of arms, aircraft, related materials, components and spare parts from Singapore to Libya.

Customs Tariff
Singapore has a generally duty-free trade regime. About 96% of the value of imports into Singapore are duty-free. The few significant import duties are levied only on alcohol to discourage drinking, on tobacco and cigarettes to discourage smoking and on vehicles and fuel to discourage car ownership and control traffic congestion. The import duties on these items are GATT-consistent and are administered on an MFN basis.

There are only four categories of products taxable in Singapore : alcoholic beverages, tobacco, motorcars and petroleum and its products. This came into effect from 1 January 1994. The move was made as part of tariff cuts are part of Singapore's continual efforts to update its liberal trade policy. They are also part of the Republic's package of concessions in the recently-concluded Uruguay Round trade negotiations.

Common Effective Preferential Tariff (CEPT) Scheme for Asean Free Trade Area

The implementation of the Common Effective Preferential Tariff (CEPT) Scheme, the main mechanism to establish the ASEAN Free Trade Area (AFTA) within a time frame of 15 years started since 1 January 1993. The CEPT Scheme is to be applied to goods originating from ASEAN member countries. It covers all manufactured and processed agricultural products. Tariff rates on these would gradually be reduced between 0 and 5% by January 2008. The CEPT Scheme requires 40% local content either on a single country or ASEAN cumulation basis. The CEPT Scheme is intended to stimulate intra-ASEAN trade and investments. It is expected to further enhance ASEAN's industrial competitiveness and efficiency and make ASEAN more attractive to foreign investments because of the increased complementation of industrial activities.

Further improvements were made to the CEPT Scheme at the Asean Economic Ministers Meeting (AEM) in September 1994. The time frame for Asean tariff reduction was reduced to 10 years i.e. to January 2003. In addition, unprocessed agriculture products were included in the CEPT Scheme.

The AFTA Council endorsed the new tariff reduction schedule for products in the CEPT Scheme which will commence its implementation on 1 January 1996. There are a total of 40,960 tariff lines in the CEPT Inclusion List for 1996 representing nearly 90% of all tariff lines in ASEAN. All these shall have their tariff rates reduced to the range 0-5% by the year 2003.

The AFTA Council also endorsed the inclusion of unprocessed agricultural products into the CEPT Scheme. Nearly 1,358 tariff lines representing 68% of all unprocessed agricultural items are to be included into the CEPT Scheme by 1 January 1996. Another 402 tariff lines representing 20% of unprocessed agricultural products will be included within the next seven years. The remainder will be subject to a special arrangement which will involve commitments that are better than ASEAN countries' commitments in the World Trade Organisation (WTO).

The Council approved the first instalment of products transferred from the Temporary Exclusion List (TEL) of the CEPT Scheme into the Inclusion List. It had been agreed that products in the TEL are to be included in five equal instalments beginning 1 January 1995 and ending by 1 January 2000. There was a total of 682 tariff lines transferred from the TEL into the Inclusion List. The Council agreed that the PTAs will be phased in to the CEPT Scheme effective 1 January 1996. The Margins of Preference of PTA products in the Temporary Exclusion, Sensitive and General Exception Lists will be maintained through the use of the CEPT Certificate of Origin. To operationalise this, the AFTA Council agreed to change the rule of origin for PTA to that of the CEPT.

Other Measures
In keeping with the Singapore Government's philosophy of allowing market forces to operate freely as far as possible, non-tariff measures have been kept to a minimum. The handful of non-tariff measures are those that are maintained for social or security reasons or as part of Singapore' obligations under international agreements. The controls are enforced either through the licensing of importers and exporters or through the issuance of import and export licenses on these traded products.

Generally, quantitative restrictions are not applied as part of the control process, unless these are required by international convention or by Singapore's trading partners. For instance, Singapore administers quotas on the import and use of chlorofluorocarbons and halons. This is intended to keep Singapore's consumption of these substances within the levels permitted by the Montreal Protocol on Substances that Deplete the Ozone Layer, to which Singapore is a signatory. The export of textiles and apparel is similarly subject to quotas set out in the Multi-Fibre Arrangement (MFA). Bilateral textile agreements have been signed with five countries, the United States, the European Community, Canada, Sweden and Norway.

Exchange Control
All exchange control regulations were completely lifted from 1 June 1978. All inward and outward remittances as well as all forms of capital transfers can be freely made.

The Free Trade Zones came into operation in 1969. They provide a range of facilities and services for the storage and re-export of dutiable and controlled goods. There are seven Free Trade Zones - six for seaborne cargo and one for air cargo (at Singapore Changi Airport). Goods stored within the zones are without any customs documentation until they are released into the market. They can also be processed and re-exported with minimum customs formalities.

The Free Trade Zones at the Port facilitate entrepot trade and promote the handling of transhipment cargo. They offer free 72-hour storage for import/export conventional cargo and containerised cargo and 1-free day storage for transhipment/re-export cargo.


Singapore has signed investment promotion and protection agreements with the following:
· Asean
· Belgo-Luxembourg Economic Union
· Canada
· The People's Republic of China
· France
· Germany
· Netherlands
· Poland
· Riau Archipelago
· Sri Lanka
· Switzerland
· Taiwan
· United Kingdom
· United States of America
· Vietnam
· Pakistan