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Singapore has long been known for its role in international trade and its function as a vital ‘port of call’ especially for traders dealing between the eastern and the western time zones. Singapore is strategically located at the heart of Southeast Asia and its extensive air and sea linkages has facilitated inter-regional and intra-regional trade. It is the the 14th largest merchandise exporter in the world and has a trade to GDP ratio of 404.9. Singapore currently holds the status of an International Maritime Center, and is connected to more than 600 ports in over 120 countries. Singapore’s Changi Airport is also one of the busiest airports for air cargo.
Singapore’s Trade Development Board was formed in 1983 to further enhance Singapore’s position as a premier international trading hub. Other initiatives in this direction were:
Launched in June 2001, the Global Trader Programme is a merger of the Approved Oil Trader (AOT) and the Approved International Trader (AIT) programmes which started in 1989 and 1990 respectively. The Approved Oil Trader (AOT) Programme aimed at capitalising on Singapore’s growing role as a refining centre in the region. Shortly thereafter, the Approved International Trader (AIT) Programme was launched to attract non-oil companies. Twenty years later, both the Programmes were merged into the GTP which now allows for an expanded product base for companies to trade in, including both energy as well as non-energy products and commodities.
The main aim behind initiating such a programme was to boost Singapore’s position as the preferred regional base for the trading operations of global traders. The GTP aims to achieve its objective by allowing companies (who are part of its programme) to benefit from a 10% concessionary tax rate that is offered on their qualifying trade income for a five year renewable period. Furthermore, in 2003 the Singapore Government announced that high-growth medium sized international trading companies that are keen to choose Singapore as their regional base for trading activities, can be considered for the concessionary tax rate for an initial, non-renewable 3-year period. During this period the companies can establish and develop their regional or global trading network, with Singapore as their base. Once the companies are able to demonstrate sustainable growth projections that are in line with the requirements of the GTP, they can apply for the 5 year renewable GTP scheme after the initial 3 year pear period.
You can apply to be a part of the Global Trader Programme if:
In addition, the applicant company will be required to meet the following benchmark criteria. If the company does not meet the benchmark criteria, it will be required to showthat it can commit to these benchmarks for its projected incentive period:
Note: The authorities will scrutinize your overall business plan and closely examine whether you are going to make significant contributions to the economy of Singapore before granting you admission to the Programme.
The following products and commodities are currently allowed under the GTP. This list is periodically reviewed and updated by the authorities.
The GTP allows you to engage in the following types of physical trade:
The GTP allows you to engage in principal trades, both buy as well as sell transactions, with offshore parties or other GTP companies.
The GTP was launched by the International Enterprise Singapore – an agency under the Ministry of Trade and Industry responsible for developing Singapore’s external economic wing. The IE Singapore’s mission is to promote the overseas growth of Singapore-based enterprises and foster international trade by positioning Singapore as a base for foreign businesses to expand into the region in partnership with Singapore-based companies. Please visit www.iesingapore.com for more information
Singapore has established itself as a reputable global trading hub with a significant number of key international players who have set up a base here. Going forward, the Government strives to create a supportive environment that will enhance Singapore’s position as a global trading hub. A veritable step in that direction includes the introduction of specific initiatives like the International Trading Institute (ITI), Global Traders Summit and International Trader Development Fund. The International Trading Institute is a tripartite project with the Singapore Management University and industry partners, which offers a business degree that specialises in international commodity trading. The Global Trader Summit is an exclusive event organised once in every two years, where top business leaders in the trading industry are invited to discuss major trends and fundamental issues shaping the future of global trading markets. The International Trader Development Fund aims at developing talent in the trading sector by offering to fund the course fees for companies that send their employees to the ITI for professional education courses.
Hawksford can help you with registration, annual filings, accounting, tax filings and on-going legal compliance of your Singapore trading company.
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