Process, Qualification Requirements and Advantages of Opening a Shipping Business Company in Singapore

As one of the world's leading shipping hubs, Singapore has become an ideal choice for global enterprises to establish Asian business bases, thanks to its unique geographical location, attractive tax system, and comprehensive legal environment. This article will provide a detailed introduction to the process of opening a shipping business company in Singapore, qualification requirements, and the preferential policies provided by the Singapore government for the maritime industry.

I. Why Start a Shipping Business in Singapore?

Superior Geographical Location: Singapore is located at the intersection of East-West shipping routes and is one of the world's busiest ports. This strategic location makes it a hub for international cargo transportation, connecting major shipping routes in Asia, Europe, Africa, and the Americas.
Attractive Tax System: Singapore has a highly competitive tax system with a corporate income tax rate of only 17%. In addition, Singapore has signed double taxation avoidance agreements with over 70 countries, significantly reducing tax burdens in cross-border transactions.
Excellent Immigration Policy: Singapore's immigration policy enables businesses to easily attract international talent. The Self-Employment Pass (EP) provides foreign executives and entrepreneurs with a legal pathway to enter Singapore and reside long-term.
Multilingual Workforce: Singapore has a skilled multilingual workforce that can easily handle business needs from different countries and regions, especially in shipping and international trade sectors.
Government Support and Incentive Programs: The Maritime and Port Authority of Singapore (MPA) actively promotes maritime industry development, providing various support and reward programs for companies intending to enter the shipping industry, especially small and medium enterprises. These programs include financial support, human resource development, and R&D incentives.

II. Process of Opening a Shipping Business Company in Singapore

1. Company Registration

To establish a shipping business company in Singapore, you first need to register a company in Singapore through the Accounting and Corporate Regulatory Authority (ACRA). Most enterprises choose to establish a Private Limited Company (Pte Ltd) due to its limited liability and tax advantages.

Approve Company Name: Ensure the company name does not duplicate existing companies and pass ACRA review.
Submit Registration Documents: Including director and shareholder information as well as the company's registered address.
Open Company Bank Account: After Singapore company registration is completed, you need to open a multi-currency business bank account for the company to handle international transactions.

2. Apply for Relevant Licenses and Permits

Depending on the specific type of shipping business the company engages in, you may need to apply for the following types of licenses:

Shipping Agency License: If providing shipping agency services, you need to apply to the Maritime and Port Authority of Singapore (MPA).
Freight Forwarding License: If involved in freight forwarding business, you need to register with Singapore Customs and apply to become an approved freight forwarder.
Port Services License: For businesses involving vessel berthing and cargo loading/unloading, you need to apply for a port services license.

3. Customs Registration and Import/Export Operations

As a shipping company, you need to register with Singapore Customs and apply for a Central Registration Number (CR Number) to submit import/export declarations through the TradeNet system.

4. Obtain ISO Certification

To enhance company credibility and comply with international shipping standards, shipping companies can apply for ISO certification, such as ISO 9001 (Quality Management System) and ISO 14001 (Environmental Management System).

5. Register for Goods and Services Tax (GST)

Companies with annual revenue exceeding S$1 million need to register for Goods and Services Tax (GST), with a current rate of 7%. Shipping companies need to pay GST when handling imported goods, but can enjoy GST offsets for exported goods.

6. Hire Employees

Shipping companies need to hire experienced management and operational staff. If hiring foreign employees, you need to apply for work permits (EP) for them. For local employees, you need to open CPF accounts and contribute to their CPF.

III. Qualification Requirements for Shipping Business Companies

Company Operational Qualifications: When applying for licenses and permits, companies need to provide detailed business plans demonstrating their capability to engage in international freight or shipping agency business.
Financial Stability: Shipping business typically involves large capital flows, and relevant regulatory authorities will review the company's financial status to ensure it has the capacity to support business operations.
Industry Certification: Singapore Association of Freight Forwarders (SAAA) certification and ISO certification are effective ways to enhance company credibility in the international market.
Compliance with Maritime Safety and Environmental Requirements: Companies need to comply with safety and environmental regulations of Singapore and the International Maritime Organization (IMO), taking measures to reduce the environmental impact of shipping.

IV. Singapore Government Incentive Programs Supporting the Maritime Industry

The Singapore government has launched multiple programs to support maritime industry growth and startup development:

Approved Shipping Logistics (ASL) Scheme: Provides tax incentives for companies providing logistics or freight services, with incremental income eligible for a tax rate of 10% or lower.
Approved International Shipping (AIS) Scheme: Qualifying shipping income can enjoy tax exemption for up to 10 years, applicable to companies engaged in international shipping business.
Maritime Seed Fund (MSF): Startups can receive funding from this fund for R&D of innovative products and services, helping shipping companies enhance competitiveness.
Maritime Finance Incentive (MFI) Scheme: Provides tax incentives for up to 10 years for companies earning income through container or vessel leasing.
Maritime Cluster Fund (MCF): This fund provides human resource development support for shipping enterprises, helping companies cultivate high-quality workforce through course subsidies, scholarships, and other forms.

V. Advantages of Conducting Shipping Business in Singapore

World-Leading Shipping Hub: Singapore has world-class port facilities and logistics networks with extremely high shipping efficiency.
Tax Benefits: Singapore's tax system is highly attractive, especially through ASL and AIS schemes, shipping companies can enjoy tax incentives.
Government Support: The Maritime and Port Authority of Singapore (MPA) provides various financial incentives and development support for shipping enterprises, helping companies achieve long-term development.
Stable Legal Environment: Singapore has a transparent and international legal environment, enabling companies to operate in a secure business environment.

VI. Summary

Opening a shipping business company in Singapore not only allows you to enjoy world-leading port facilities and geographical advantages but also benefit from multiple government support programs. Through proper company registration and license application processes, as well as adherence to international standards, shipping companies can quickly integrate into the global trade network and achieve steady business development leveraging Singapore's resources and policies.