How to incorporate a logistics company in Singapore: A complete guide

The boom of e-commerce in recent years has become a major driving force behind the strong growth of the logistics market in Singapore.

According to forecasts, the size of the e-commerce market here will continue to grow impressively with an average annual rate of 16,2%, reaching SGD 14,2 billion by 2025This growth requires logistics companies to constantly improve processes and increase efficiency to meet customers' needs for fast and accurate delivery.

In addition, logistics costs in Singapore are also showing remarkable developments. It is forecasted that by 2029, the logistics costs of the transportation and logistics market here will reach 58,24 billion USD, with an average annual growth rate of 3,01%. This shows that, despite certain achievements, the logistics market in Singapore still has a lot of potential for development.

Seaports play a vital role in driving the growth of Singapore’s logistics industry. With container throughput expected to reach 38,49 million TEUs by 2024, Singapore’s seaports are increasingly asserting their position as one of the world’s largest cargo transshipment hubs.

Singapore, with its advantageous geographical location in the heart of Southeast Asia, has become a bustling commercial and aviation hub of the world.

Open-door policies, attracting investment, along with modern seaport and logistics systems have contributed to turning this island nation into an economic powerhouse.

Thanks to these outstanding advantages, Singapore is an ideal location for logistics companies to expand their operations, taking advantage of modern infrastructure and extensive trading networks, thereby enhancing the position and reputation of the Enterprise in the international arena.

With a modern seaport system, developed infrastructure and a favorable business environment, Singapore is an ideal location for logistics businesses to expand their operations.

By establishing its headquarters here, the Company has easy access to a global supply network, high-quality human resources and major business partners in the world. Thanks to that, the Company not only expands its market to the Asia-Pacific region but also enhances its brand reputation in the international arena. 

Currently, the Singapore Government issues tax incentives for companies established in Singapore. Therefore, Logistics companies established in Singapore will enjoy the following tax incentives:

• The tax exemption policy for newly established companies in Singapore is applicable for the first 3 assessment years.
• The partial tax reduction policy is applied to all types of companies, established and operating in Singapore from the 4th year onwards. 

Singapore, one of the world’s top 10 financial centers, has a strong banking system. This makes it easy for logistics companies here to open corporate and personal bank accounts. 

In addition, international financial transactions have become simpler and faster thanks to the modern international payment gateway system, along with a variety of international payment cards, helping to reduce costs and procedures.

Singapore is the financial center of Asia, and is a country that gathers all the major banks in the world as well as allows the use of a variety of online bank accounts, international payment gateways suitable for all types of businesses from small to large.

Besides, Singapore is also the gathering place of Logistics Enterprises (shipping lines, international shipping units), so the procedures for receiving and transferring money between Logistics companies in Singapore and suppliers (shipping lines, international shipping units) are easier, faster, safer and more convenient.

GLA has successfully supported many companies to open logistics companies in Singapore to expand their business and investment markets internationally.

• GST is a value added tax levied on most goods and services supplied in Singapore.
• Logistics companies are often subject to GST on their services, including transportation, warehousing and freight forwarding.
• However, some international services, such as export freight, may be zero-rated or exempt from GST.
• Businesses with an annual GST turnover exceeding S$1 million are required to register for GST and collect and remit tax to the Inland Revenue Authority of Singapore (IRAS).

• Corporate income tax is levied on profits received by companies operating in Singapore.
• Singapore's corporate tax rate is one of the lowest in the world, currently at 17%.
• Certain industries, such as international shipping and international trade, may qualify for reduced tax rates or tax exemptions under specific programs.

• Customs duties and import taxes are levied on imported goods.
• Customs duties and import taxes vary depending on the type of goods and country of origin.
• Logistics companies may be required to pay customs duties and import taxes on behalf of their customers.

• Scope: Applicable to real estate ownership in Singapore. 
• Logistics companies in Singapore often own or lease real estate for warehouses and offices in Singapore. 

Maritime Industry Incentive Program (Maritime Sector Incentive (“MSI”)) is a comprehensive programme designed to stimulate growth and development in the Singapore maritime industry.

The program offers a range of tax incentives and benefits to attract international shipping businesses, ancillary service providers and financial institutions to establish and expand operations in the country. The program includes three main awards:

• MSI Award - Approved International Shipping Enterprise (MSI-AIS): This award is aimed at international ship owners and operators, providing them with tax exemptions or alternative tax bases based on the net tonnage of their vessels. Eligible companies can enjoy these benefits for a renewable period of 10 years or a non-renewable period of 5 years with an option to extend to 10 years if certain conditions are met.
• MSI Award - Shipping Related Support Services (MSI-SSS): The award targets ancillary shipping service providers and encourages shipping groups to set up corporate services functions in Singapore. Approved companies enjoy a preferential tax rate of 10% on additional income derived from the provision of qualifying services such as shipbroking, freight forwarding and ship management.
• MSI - Marine Chartering Award (MSI-ML): This award aims to attract organisations to use Singapore as a capital and financing base for their ship or marine container financing activities. Eligible companies can enjoy tax incentives on qualifying rental income and preferential tax rates for the management entity. This award covers both operating and qualifying finance leases.

Eligible International Trading Companies will enjoy Preferential tax rates from 5%, 10% or 15% for net income arising from activities such as: buying, selling, trading physical goods; brokerage of these transactions; and derivative transactions. The specific tax rate will depend on each type of transaction and the scale of the Company's operations.

The program allows the Company to deferral math Import GST until monthly GST payment due.

The time to set up a Logistics company in Singapore can take from 1-2 working days from the time the business registration application is approved by ACRA.

To ensure that reports are submitted in accordance with Singapore government regulations, GLA, with its experience in supporting companies in Singapore in terms of tax and accounting, will accompany businesses in need of a unit to support financial reporting procedures - tax and accounting in Singapore effectively, economically and professionally.

• Register your company with ACRA. 
• Register for business license for logistics activities.
• Comply with labor, tax and customs regulations.