Singapore’s distribution and sales channels are simple, direct and open to the participation of foreign firms established in Singapore. Because of Singapore’s role as a regional hub, most local distributors will also have knowledge of regional distribution rules and regulations. Most consumer goods are imported by stocking distributors who resell to retailers. Some goods are imported directly for sale in the importer’s own retail outlets.
Using an Agent or Distributor
Many American exporters use agents or distributors to serve the Singapore market and other markets in Southeast Asia. Finding prospective partners usually presents no problem as Singapore firms are aggressive when it comes to representing new products and typically respond enthusiastically to new opportunities. Most American companies that use the U.S. Commercial Service (CS) Singapore matchmaking and promotion services in Singapore find several interested agents or distributors. Because of the relatively small size of the Singapore market, potential partners often ask to cover regional territories. With a strong history of trade, Singaporean companies are particularly successful in taking products to the region. CS Singapore offers a wide range of programs and has an excellent record of success in introducing U.S. firms to the market. A list of services offered by CS Singapore can be obtained from our website.
Establishing an Office
Singapore maintains an open, heavily trade-dependent economy. The economy is supported through unprecedented government spending and strong supply chains in key sectors, despite the COVID-19 pandemic. The government’s predominantly open investment policies support a free- market economy while actively managing and sustaining Singapore’s economic development. U.S. companies regularly cite transparency, business-friendly laws, tax structure, customs facilitation, intellectual property protection, and well-developed infrastructure as attractive investment climate features. The IMD World Competitiveness Booklet 2023 ranked Singapore as the fourth most competitive economy globally. Singapore actively enforces its robust anti-corruption laws and typically ranks as the least corrupt country in Asia. In addition, Transparency International’s 2022 Corruption Perception Index placed Singapore as the fifth-least corrupt nation globally. The U.S.-Singapore Free Trade Agreement (USSFTA), which came into force in 2004, expanded U.S. market access in goods, services, investment, and government procurement, enhanced intellectual property protection, and provided for cooperation in promoting labor rights and environmental protections.
Singapore is poised to attract future foreign investments in digital innovation, pharmaceutical manufacturing, sustainable development, and cybersecurity. The Government of Singapore is investing heavily in automation, artificial intelligence, and integrated systems under its Smart Nation banner and seeks to establish itself as a regional hub for these technologies. Singapore is also a well-established hub for medical research and device manufacturing.
American firms wishing to establish a presence in Singapore have several straightforward options to do so. They can establish a Representative Office (RO), register as a Branch of the parent, or incorporate as a Singapore company. General information on establishing an office can be found online.
If an American company wishes to carry on operations in Singapore, it should register a branch office or incorporate a local company with the Accounting and Corporate Regulatory Authority (ACRA). ACRA publishes an excellent guide that takes the first-time registrant through the process of establishing a branch office or incorporating in Singapore.
For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.
Representative Office
Setting up a Representative Office (RO) in Singapore can be a good way for American firms to explore business opportunities in Singapore or the region. ROs in banking and insurance need to register with the Monetary Authority of Singapore and meet the guidelines or requirements laid out by the MAS. ROs in all other industries need to register with Enterprise Singapore.
ROs can only carry out market research, conduct feasibility studies or work as a liaison on behalf of the parent company. ROs may not conduct business directly or on behalf of the parent company. ROs cannot ship, transship, or store goods in Singapore. American firms can either work through an agent or distributor to do so or establish their own commercial presence.
Branch Office
For Branch Offices, the Companies Act requires a foreign company to appoint a minimum of one authorized representative who is ordinarily resident in Singapore, i.e. one who is a Singaporean Citizen, a Singapore Permanent Resident, or a person who has been issued an EntrePass.
Establishing a Singapore Business
American firms can also register a sole-proprietorship, partnership, limited liability partnership, or incorporate a company in Singapore. For a sole proprietorship the process takes about one day, while more complex business entities can take up to six weeks and require lawyers and accountants to assist with incorporation documents. A point to bear in mind is that registration/incorporation of a company does not automatically mean that expatriate staff can be assigned to Singapore. Foreign staff must obtain employment passes from the Singapore Ministry of Manpower.
Franchising
Singapore is home to a wide variety of franchise concepts. Foreign franchises are well received, and the United States is by far the largest supplier of foreign franchises in the country. There are American franchises in practically every industry like food and beverages, education, fitness, etc. McDonald’s, Burger King, KFC, A&W, Shake Shack, Five Guys, Krispy Kreme, Eggslut, Cinnabon, Van Leeuwen, Luke’s Lobster, Lady M, New Horizons, Avis, Comfort Keepers, Contours Express, and many others have operations in Singapore.
The franchising market in Singapore is saturated and highly competitive. The success of selling a franchise in Singapore is based on a number of factors including brand name, up-front costs and royalties, the concept’s uniqueness, and the flexibility of the franchise agreement.
With its strategic location and well-developed infrastructure, Singapore serves as an ideal regional showcase and distribution center for U.S. franchisors seeking entry into Asia markets. The country’s multi-ethnic society also makes it an ideal location for foreign franchisors to test their concepts and use the reaction to gauge the acceptance of their franchise in Asia. Amidst a market enriched by both established international brands and burgeoning Singaporean brands that have expanded internationally, U.S. companies are presented with challenges to set themselves apart within this intricate framework.
Singapore does not have a specific franchising statutory regulation or registration requirements. The relationship between the franchisor and franchisee is contractual. It would, however, be good practice to do due diligence checks before any partnership.
Singapore is small and has limited land space. When planning on the franchise development, U.S. franchisors should be mindful that real estate in Singapore is expensive and getting a good location is a challenge, especially for those in the retail and F&B business.
Direct Marketing
The direct marketing industry in Singapore began in the early 1990s and now includes direct mail, telemarketing, television sales, mail order, call centers, fulfillment, and eCommerce firms. The Data-Driven Marketing Association of Singapore (DMAS) represents both users and service providers. The direct marketing industry is well supported by service companies including Singapore Post, Teledirect, TNT International Mail, Ogilvy One and MMS Consultancy, among many others.
The DMAS, a self-regulatory body, was established in 1983. It provides a forum for all direct-selling companies in Singapore to discuss problems of common concern and to codify a high standard of business practices throughout the industry. The DMAS has adopted a Code of Conduct by which member-companies in the Association must abide by in every aspect of business. Through the Code of Conduct, DMAS aims to further inculcate the spirit and practice of ethical direct-selling within its member-companies, setting examples for others to follow.
Joint Ventures/Licensing
Foreign investors are not required to enter into joint ventures or cede management control to local interests. In Singapore, local and foreign investors are subject to the same basic laws. Apart from regulatory requirements in some sectors, the government screens investment proposals only to determine eligibility for various incentive regimes. Singapore places no restrictions on reinvestment or repatriation of earnings or capital.
Licensing is also a viable alternative in Singapore. With one of the strongest intellectual property rights (IPR) protection schemes in Asia, a well-developed legal framework and an advanced manufacturing base, Singapore is an attractive location for American licensors.
Express Delivery
Changi Airport has one of the widest cargo networks in Asia. Among these, 60 airlines operate more than 900 weekly scheduled freighter flights linking Singapore to over 90 cargo city links.
As one of the world’s busiest airports for air cargo, Changi Airport handles 1.85 million tons in 2022. At Changi Airport, stringent standards are set to ensure that ground handlers deliver world class services to the cargo agents and the shippers while cargo clearance through the Customs checkpoints remains seamless and efficient.
| Performance Standards | Target |
|---|---|
| Cargo documents available within 2 hours of passenger aircraft arrival | 90% |
| Cargo documents available within 4 hours of freighter aircraft arrival | 90% |
| Cargo available within 3.5 hours of passenger aircraft arrival | 90% |
| Cargo available within 5.5 hours of freighter aircraft arrival | 90% |
Due Diligence
Entities wanting to carry out business in Singapore must register with the Accounting and Corporate Regulatory Authority (ACRA). The U.S. Commercial Service Singapore offers the International Company Profile service to American firms wishing to check the bona fides of existing or potential partners. Alternately, U.S. firms can run a check on Singapore companies by accessing the ACRA database. Other credit agencies include Dun & Bradstreet.