Singapore Garment Manufacturing Guide

Singapore Garment Manufacturing Guide | Bestar

Singapore Garment Manufacturing Guide

Starting a garment manufacturing business in Singapore involves several key steps. Here's a guide to help you through the process:

1. Business Registration:

• Register your company with the Accounting and Corporate Regulatory Authority (ACRA). You'll need to choose a business structure (e.g., sole proprietorship, partnership, or private limited company). A private limited company is a popular choice for its tax benefits and limited liability.   

• Prepare the necessary documents, including identification documents, a detailed business plan, and information about shareholders and directors.

• Foreign investors will need to engage a local agent to handle the registration with ACRA.

2. Develop a Business Plan:

• Outline your business model, target market, marketing strategies, and financial projections.

• Include details about your product line, production processes, sourcing of materials, and sales channels.   

3. Secure Funding:

• Explore various funding options such as government grants, venture capital, and bank loans. Singapore offers several schemes to support startups.   

4. Acquire Necessary Licenses and Permits:

• Depending on the scale and nature of your operations, you may need specific licenses related to manufacturing.

• Ensure compliance with local regulations and health and safety standards.

5. Set Up Manufacturing Operations:

• Choose a suitable location for your factory or workshop, considering factors like accessibility, space for operations, and proximity to suppliers.

• Invest in the necessary machinery and equipment for garment production, such as sewing machines, cutting tables, and finishing equipment.

• Source high-quality fabrics and other materials from reliable suppliers.

6. Build a Skilled Team:

• Recruit skilled workers, including designers, pattern makers, sewing operators, quality control personnel, and administrative staff.

• Consider providing training to enhance skills and ensure consistent quality.

7. Launch and Market Your Products:

• Develop a strong branding and marketing strategy to reach your target customers.

• Explore various sales channels, such as online stores, retail outlets, and wholesale distribution.

Licenses Related to Manufacturing

While there isn't a single overarching "manufacturing license" in Singapore, the specific licenses and permits you'll need for a garment manufacturing business will depend on the nature and scale of your operations. Here's a breakdown of potential licenses and related requirements:

1. Factory Registration/Notification (Ministry of Manpower - MOM):

• If your garment manufacturing involves operating a factory, you will likely need to register or notify your factory with the Ministry of Manpower (MOM) under the Workplace Safety and Health Act. This ensures compliance with safety and health standards for your employees and workplace.

• You can do this online via the GoBusiness portal.

2. Specific Manufacturing Licenses (Depending on Activities):

• While general garment manufacturing might not always require a specific manufacturing license beyond factory registration, certain processes or products might.

• If you are involved in food-related textiles (e.g., reusable food packaging fabrics): You would likely need licenses from the Singapore Food Agency (SFA), especially if your manufacturing process comes into contact with food.

• If you are manufacturing medical textiles or garments: You would need to adhere to regulations and potentially obtain licenses from the Health Sciences Authority (HSA), similar to manufacturers of medical devices.

3. Import/Export Licenses (Singapore Customs):

• As you plan to export garments, you'll need to activate your Customs Account with Singapore Customs.

• While there isn't a general export license for all goods, you'll need to obtain an export permit for each consignment of goods you export through the TradeNet system. This can be done yourself (after registration as a declaring agent) or via a customs broker.

• For specific Free Trade Agreements (FTAs), you might need to apply for a Preferential Certificate of Origin to allow your goods to receive reduced or zero tariffs in the destination country. Singapore Customs handles the issuance of these certificates for various FTAs (e.g., USSFTA requires a Certificate of Eligibility for textiles and apparel).

• If you are also importing raw materials (fabrics, dyes, etc.), you'll need to comply with import procedures and may need import permits for certain controlled goods.

4. Fire Safety and Building Plan Approval (Singapore Civil Defence Force - SCDF):

• Depending on the size and nature of your manufacturing premises, you might need to obtain approvals from the SCDF for your building plans to ensure compliance with fire safety regulations.

5. Environmental Permits (National Environment Agency - NEA):

• If your manufacturing processes generate significant air emissions, wastewater discharge, or hazardous waste, you may need to obtain relevant permits from the National Environment Agency (NEA) to ensure environmental compliance. Textile dyeing and finishing processes, in particular, can have environmental implications.

6. Workplace Safety and Health (WSH) Permits (Ministry of Manpower - MOM):

• Depending on the specific machinery and processes used in your garment manufacturing, you might need specific WSH permits for high-risk activities to ensure a safe working environment.

How to Determine the Specific Licenses You Need:

• GoBusiness Portal: The GoBusiness Singapore website (https://www.gobusiness.gov.sg/) is an excellent resource. They have a "Licence e-Adviser" tool that can help you identify the licenses relevant to your specific business activities. You can search by industry (Manufacturing), business intent (e.g., manufacturing of textiles, import/export), or government agency.

• Contact Relevant Agencies: Once you have a clearer idea of your operations, it's advisable to directly contact the specific government agencies mentioned above (ACRA, MOM, SFA, HSA, Customs, SCDF, NEA) to confirm the exact licensing and permit requirements.

  
  

In summary, for starting a garment manufacturing business focused on exports in Singapore, you will definitely need to register your business with ACRA, likely need to register your factory with MOM, and will need to activate your customs account for export permits. Depending on your specific manufacturing processes and products, other licenses related to food safety, medical devices, environmental control, or workplace safety might also be necessary. Always verify the specific requirements with the relevant Singapore government agencies.

Export Tax and Requirements in Singapore for Garments

Export Tax:

• Singapore has a free trade policy, and goods exported from Singapore are generally not subject to export duties or taxes, including Goods and Services Tax (GST).   

• This means that when you export your manufactured garments, you will typically zero-rate the supply for GST purposes, meaning you charge GST at 0%.

Export Requirements:

To zero-rate your export supply for GST, you need to comply with specific requirements and maintain proper documentation. These generally include:

• Customs Export Permit: You will need to obtain a Customs export permit for the goods you are exporting. This is done electronically through the TradeNet system. You can either apply for the permit yourself (after registering as a declaring agent and obtaining a TradeNet user ID) or appoint a declaring agent to do it on your behalf.

• Supporting Documents for Zero-Rating (GST Purposes): You must maintain evidence to support that the goods were indeed exported. The specific documents required may vary depending on the mode of transport and the nature of the export, but generally include:

  • Transaction Documents:

    • Purchase order from your overseas customer.

    • Sales invoice to your overseas customer, indicating GST at 0%.

    • Delivery note or packing list.

  • Transport Documents:

    • For sea freight: Bill of lading or cargo manifest or mate's receipt. Alternatively, a subsidiary export certificate or note of shipment issued by the freight forwarder.   

    • For air freight: Air waybill. Alternatively, a subsidiary export certificate or note of shipment issued by the freight forwarder.   

    • For land transport: Export permit showing your name as the exporter and the vehicle number.

  • Other Potential Documents:

    • Insurance documents (if applicable).

    • Evidence of payment received from your overseas customer (especially for indirect exports).

    • Written instructions from your local customer to deliver the goods to their appointed freight forwarder (for indirect exports).

• 60-Day Rule: You generally have up to 60 days from the "time of supply" to export the goods and collect all the required export documents to support zero-rating. Failure to do so within this timeframe may require you to treat the supply as a local standard-rated supply (currently 9% GST).   

• Hand-Carried Exports: If you or your customer hand-carries the goods out of Singapore via Changi International Airport, you must apply for the Hand-Carried Export Scheme (HCES) unless you have obtained a written exemption from the Comptroller of GST. Specific procedures and documentation apply under this scheme.   

• Rules of Origin: Depending on the destination country and any applicable Free Trade Agreements (FTAs), there might be specific rules of origin that need to be met for your garments to qualify for preferential tariff treatment in the importing country. For example, the United States-Singapore Free Trade Agreement (USSFTA) has specific "yarn forward" rules for textiles and apparel. You may need to apply for a preferential Certificate of Origin.

• Compliance with Standards: Ensure your garments comply with any relevant quality standards, labeling requirements, and other regulations of the destination country.

It is highly recommended to consult the Singapore Customs website (https://www.customs.gov.sg/) and the Inland Revenue Authority of Singapore (IRAS) website (https://www.iras.gov.sg/) for the most up-to-date and detailed information on export procedures and GST regulations.

How Bestar can Help

Singapore Garment Manufacturing Guide

Bestar offers expertise that can be invaluable when starting and running a garment manufacturing business in Singapore, especially one focused on exports. Here's how we can help:

• GST Compliance: Bestar can:

  • Advise on GST Registration: Determine if and when your business needs to register for GST.

  • Manage GST on Exports (Zero-Rating): Ensure you understand and meet the requirements for zero-rating your export supplies, including the necessary documentation and the 60-day rule.

  • Handle GST Reporting and Filing: Prepare and file your GST returns accurately and on time.

  • Advise on Input Tax Claims: Help you understand what input tax credits you can claim on your business purchases.

  • Stay Updated on Tax Laws: Keep you informed about changes in GST regulations and other relevant tax laws.

• Corporate Income Tax: We can assist with:

  • Understanding Tax Obligations: Explain Singapore's corporate income tax system and your company's responsibilities.

  • Tax Planning: Advise on tax-efficient business structures and strategies.

  • Preparing and Filing Tax Returns: Ensure accurate and timely filing of your corporate income tax returns.

  • Claiming Tax Incentives: Identify and help you apply for relevant tax incentives and schemes available to manufacturing and export businesses.

• Withholding Tax: Advise on any withholding tax obligations for payments made to non-residents.

• Strategic Planning and Business Development: Bestar can provide expertise in:

  • Developing a Comprehensive Business Plan: Creating a robust plan that outlines your business model, marketing strategies, operational plans, and financial projections.

  • Funding Strategies: Advising on and helping you access various funding options, including grants, venture capital, and loans.

  • Operational Efficiency: Analyzing your manufacturing processes and recommending improvements to enhance efficiency and reduce costs.

  • Marketing and Sales Strategies: Developing effective strategies to reach your target customers and build your brand.

  • International Expansion: Providing guidance on entering new export markets.

• Navigating the Singapore Business Environment: We have a deep understanding of the local business landscape, regulations, and potential challenges.

• Business Registration and Incorporation: We can streamline the process of registering your company with ACRA.

• Company Secretarial Services: We can handle statutory compliance matters, such as maintaining company registers, filing annual returns, and organizing board meetings.

• Accounting and Bookkeeping: We can manage your financial records, prepare financial statements, and ensure compliance with accounting standards.

• Payroll Services: We can handle your payroll processing, tax deductions, and compliance with employment regulations.

• Office Space and Virtual Office Solutions: Bestar offers physical or virtual office solutions, which can be helpful when starting.

• Nominee Director Services: For foreign investors, we can provide nominee directors to meet local regulatory requirements.

• Ongoing Compliance: We help ensure your business remains compliant with Singapore's legal and regulatory requirements.

In summary, Bestar plays a crucial role in helping you establish and grow your garment manufacturing business in Singapore:

• Bestar ensures you meet your tax obligations and can optimize your tax strategy.

• Bestar provides strategic guidance and expertise to help you succeed in the market.

• Bestar handles administrative and compliance tasks, freeing you to focus on your core business.

Engaging the right professionals at the appropriate stages can save you time, money, and potential headaches, ultimately increasing your chances of success in the competitive garment manufacturing industry.

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