Setting Up a Shipping Company in Singapore
The shipping industry of Singapore has a significant contribution to its GDP, which is 7%. There are currently over 5,000 shipping companies that are based in Singapore and it keeps growing. Today, the country has become an important international maritime centre. Its economic centre has resulted in trading in volumes because of the strategic location and major global shipping routes pass through it.
Singapore’s maritime centre connects 600 ports and 120 countries around the world, which is why you can start a shipping company in Singapore with enthusiasm.
Why Open a Shipping Company in Singapore?
The maritime port of Singapore and Port Authority shows the importance and the necessity to improve its shipping industry. They now have schemes that are readily available to help investors who want to invest in this type of business.
These schemes are research and development, financial assistance, and manpower development. Therefore, the purpose of this is to help SMEs to capitalize on the available assistance so they can start a shipping business in the country.
Find a Suitable Place for Your Business
You need to find the right premises where you can set up your office. There are a lot of rental options in Singapore that will cater to your needs.
You might want to hire staff that can work on your vessel and you will also need employees in your company office. You must comply with these legislations, and those you hire to work onboard your vessel must have a valid Port Limit Manning License. If you will hire people to work in your office, you must follow the hiring guidelines for the local and foreign employees.
Licensing Requirements for Your Shipping Company in Singapore
This is the next thing to do. You must obtain the licenses and permits to start a shipping company in Singapore. This depends on the business activities that you will do. These are the licenses available:
- Harbor craft license
- Ship registration license
- Port clearance certificate
- Port limit manning certificate
- Ship station license
- New vessel permit
- Permit for discharging, transporting or loading dangerous products
Among these licenses, it is mandatory for you to have the harbour craft license because it is for operating vessels for Singapore’s commercial purposes. The harbour craft license comes from the Maritime Port Authority. It is given if the vessel has passed an inspection. Shipping companies that operate outside the port limits of the state should also obtain a port clearance certificate.
Applying for a License
You must submit the application form for the Harbor/Pleasure Craft License (PM74), together with the originals and copies of these documents at the OSDC:
- NRIC(s) for licensing under the name of at least one individual.
- Instant Information Printout that comes from the Accounting and Corporate Regulatory Authority (ACRA) to obtain a license under a corporate body.
- Proof of ownership – Charter Agreement, Bill of Sale, Builder’s Certificate, Invoice, Hull Receipt, etc.
- Proof of origin of the vessel – Import Permit, Launching Permit, General Arrival Declaration, or which of them is applicable.
- Insurance policy – A marine policy that covers the liabilities of a third party which includes wreck removal and passenger/personal injuries.
- Craft’s manning – MPA Manning license.
- Letter of approval for the use of a pier/landing places that are applicable and it is issued by the manager/owner of the facilities.
- Other requirements or documents the Port Master asks for.
All vessels must pass the inspection of its hull, appliance and equipment for it to be licensed as a harbour craft. Make arrangements with the One-Stop Document Center (OSDC) for the schedule and location of the inspection at least a week before. Keep in mind that this inspection should be done every 12 months before the license renewal.
Obtain a License
You will receive a Craft Inspection Report when the craft passes inspection. You must pay the dues and fees, not within 7 days since the inspection date. The license should be displayed at all times and clearly visible. Make sure to carve or cut-in the license number into the vessel’s main beam and should be visible and legible on the vessel.
The MPA has a number of incentives and initiatives that are helpful to new and existing investors in Singapore. If you are in the shipping industry, these are the incentives:
- Maritime Sector Incentive – Approved International Shipping Enterprise Award (MSAIS) – This is to encourage owners to open a shipping business in Singapore. Companies that qualify will have tax exemption based on qualifying income for either:
- A renewable period of 10 years.
- A non-renewable period of 5 years, but they have the option to shift to a 10-year award after the end of 5 years.
- Maritime Sector Incentive – Maritime Leasing (MSI-ML) Award
It encourages business entities to have their funding base in Singapore when financing their sea containers or vessels. The leasing companies under this scheme enjoy up to 5 years of tax concessions based on their qualifying income. In addition, an approved manager of the company will be given a 10% concessionary tax rate based on their qualifying management income.
- Maritime Sector Incentive – Shipping-related Support Services (MSI-SSS) Award
Aims to promote the growth of shipping providers and to encourage conglomerates to set up in Singapore. The companies that qualify will enjoy a 10% concessionary tax rate for 5 years based on the incremental income from these approved services:
- Ship management
- Forward freight agreement (FFA) trading
- Ship agency
- Freight forwarding and logistics
- Corporate Services that are rendered to the related parties that carry out a shipping business
This is the information you need if you want to open a shipping company in Singapore. If you need to set up a shipping company in Singapore, you can contact us.
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