Free Trade Zones
Updated: Aug 8
Free Trade Zones (FTZs) are designated areas in Singapore where the payment of duties and taxes (e.g. GST) are suspended when goods arrive in Singapore and are stored in the FTZ. Goods imported and stored in FTZs are considered as goods under customs control. Goods can be imported and sold or re-exported without the need to account for customs or excise duties or GST.
Singapore has nine Free Trade Zones (FTZs) established in five geographical areas operated by three FTZ authorities, namely PSA Corporation Ltd, Jurong Port Pte Ltd and the Changi Airport Group (Singapore) Pte Ltd.
The nine FTZs are Brani Terminal, Keppel Distripark, Pasir Panjang Wharves and Terminal, Sembawang Wharves, Tanjong Pagar Terminal, Keppel Terminal, Jurong Port, Changi Airport Group and the Changi Airport Cargo Terminal Complex.
They provide a wide range of facilities and services for storage and re-export of dutiable and controlled goods. Goods can be stored within the zones without any customs documentation until they are released in the market and they can also be processed and re-exported with minimum customs formalities.
FTZs are meant to support Singapore’s role as a centre for entrepot trading and transhipment activies. They offer free 72-hour storage for import/export of conventional and containerized cargo and 140-day free storage for transshipment/re-export cargo. The primary function is to facilitate the transshipment of overseas goods via Singapore, that is, goods placed temporarily in the FTZ before being loaded onto another ship or aircraft for export without requiring customs clearance.
FTZs are used primarily for the temporary storage of goods, as duties and Goods and Services Tax (GST) on imported goods depositd in an FTZ is suspended, and is only payable when the goods leave the FTZ and enter customs territory for local distribution and consumption. GST is not payable on supply made in FTZ if the goods supplied are meant for transshipment or re-export.
Under our GST regime, unless special schemes are applicable, GST is payable on the importation of goods into Singapore. Import GST is payable regardless of whether the importer is GST-registered or not.
If goods are imported and stored in FTZs, import GST is suspended and no GST is payable. In addition, goods in FTZs may be supplied (bought and sold) many times before they are removed. To free businesses from the burden of having to account for GST on these multiple supplies of goods, such supplies (except for supplies of local goods in FTZs which remain taxable) are disregarded for GST purposes.
If you move your overseas goods from an FTZ out of Singapore (i.e. transshipment) without entering customs territory, it is outside the scope of GST. Thus, you are not required to report such movement of overseas goods in your GST return.
Duty and import GST are only payable when the goods:
Are consumed within the FTZ; or
Leave the FTZ and enter into customs territory for local sales or domestic consumption
You are required to take up an import permit with the Singapore Customs and pay import GST on overseas goods used or consumed within an FTZ.
When you move the overseas goods from the FTZ into customs territory, import GST is payable and you are required to take up an import permit and pay import GST. Import GST is not payable if you are removing the goods under the following circumstance: you are moving the goods directly from an FTZ into another FTZ, a Warehouse or an Excise Factory (EF).
FTZs are also subjected to the same laws and regulations of Singapore as businesses and activities outside FTZs. Permits are still required, except for transhipment of non-controlled goods within the same FTZ and goods in transit. The Immigration & Checkpoints Authority (ICA) is stationed at the checkpoints to clear goods from the FTZs.
Why Singapore Free Trade Zones
Singapore Free Trade Zones (FTZs) offer a number of advantages for businesses, including:
Tax benefits: Goods stored in FTZs are exempt from import duties and taxes, which can save businesses a significant amount of money.
Simplified customs procedures: Customs procedures are simplified in FTZs, which can save businesses time and hassle.
Convenient location: FTZs are located in close proximity to Singapore's ports and airports, which makes it easy to import and export goods.
World-class infrastructure: Singapore has world-class infrastructure, including ports, airports, and roads, which makes it a convenient place to do business.
Favorable regulatory environment: Singapore has a favorable regulatory environment for businesses, which makes it a good place to set up and operate a company.
As a result of these advantages, Singapore FTZs are a popular destination for businesses that are looking to import, export, or manufacture goods. Some of the specific reasons why businesses might choose to set up in a Singapore FTZ include:
To take advantage of the tax benefits: As mentioned above, goods stored in FTZs are exempt from import duties and taxes. This can save businesses a significant amount of money, especially if they are importing high-value goods.
To simplify customs procedures: Customs procedures are simplified in FTZs, which can save businesses time and hassle. This is especially important for businesses that import or export a large number of goods.
To benefit from Singapore's strategic location: Singapore is located in a strategic location in Southeast Asia, which makes it a convenient place to import and export goods to and from other countries in the region.
To take advantage of Singapore's world-class infrastructure: Singapore has world-class infrastructure, including ports, airports, and roads, which makes it a convenient place to do business. This includes access to a wide range of transportation and logistics services, which can help businesses to move goods quickly and efficiently.
To benefit from Singapore's favorable regulatory environment: Singapore has a favorable regulatory environment for businesses, which makes it a good place to set up and operate a company. This includes a well-developed legal system, a low level of corruption, and a business-friendly government.
If you are considering setting up a business in Singapore, a FTZ may be a good option for you. FTZs offer a number of advantages that can help businesses to save money, reduce hassle, and improve efficiency.
How Bestar can Help
Bestar is a Singapore-based company that specializes in providing services to businesses in FTZs. They offer a wide range of services, including:
Company formation: Bestar can help you set up a company in a Singapore FTZ quickly and easily. They will take care of all the paperwork and legal requirements, so you can focus on running your business.
Account opening: Bestar can help you open a corporate bank account in a Singapore FTZ. This is essential for businesses that want to conduct transactions in the FTZ.
Compliance: Bestar can help you stay compliant with Singapore's laws and regulations. This includes filing annual returns, paying taxes, and complying with anti-money laundering regulations.
Consulting: Bestar can provide consulting services to businesses that are looking to set up or operate in a Singapore FTZ. This includes advice on the legal and regulatory requirements, as well as guidance on how to optimize your operations in the FTZ.
Bestar is a reputable company with a good reputation in Singapore. They have a team of experienced professionals who can help you set up or operate your business in a Singapore FTZ quickly and easily.
Here are some of the specific ways that Bestar can help businesses in Singapore FTZs:
Provide guidance on the legal and regulatory requirements for setting up and operating a business in a Singapore FTZ. Bestar's team of accountants can help you understand the complex laws and regulations that govern businesses in Singapore FTZs. This will help you avoid making mistakes that could land you in legal trouble.
Help you choose the right location for your business in a Singapore FTZ. There are different FTZs in Singapore, each with its own advantages and disadvantages. Bestar can help you choose the right location for your specific needs.
Assist you with the incorporation process. Bestar can take care of all the paperwork and filing requirements for incorporating your business in a Singapore FTZ. This will save you time and hassle.
Open a corporate bank account in Singapore. A corporate bank account is essential for businesses that want to conduct transactions in the FTZ. Bestar can help you open a corporate bank account with a reputable bank in Singapore.
Provide consulting services to businesses that are looking to set up or operate in a Singapore FTZ. Bestar can provide consulting services to businesses that are looking to set up or operate in a Singapore FTZ. This includes advice on the legal and regulatory requirements, as well as guidance on how to optimize your operations in the FTZ.
If you are considering setting up a business in a Singapore FTZ, Bestar is a reputable company that can help you get started. They have a team of experienced professionals who can help you understand the legal and regulatory requirements, choose the right location, and incorporate your company quickly and easily. Bestar can also provide you with a registered address, and open a corporate bank account.
For more information or enquires, please contact Bestar.