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Beginner’s Guide on Starting a Courier Business in Singapore
The disruption to traditional global commercial models this decade is far-reaching, introducing new norms across all levels of business. One powerhouse trend that is emerging and complementing the boom in e-commerce is the need for delivery companies. It doesn’t get better than starting a courier business in Singapore as far as business ideas go.
Southeast Asia is an upcoming global player in e-commerce, and Singapore is embracing this business brand. Momentum is building in international trade and investment and playing a pivotal role in the logistics value chain. Singapore is 7th of 160 countries in the World Bank’s Logistics Performance Index (LPI), scoring 4 out of 5. As of 2020, its transportation and storage sector alone were worth SGD24 billion, and demand is growing.
In this beginner’s guide, we address relevant issues that every budding entrepreneur should know. We review the company incorporation process, approvals and compliance issues and consider some handy tips for success. Our overall aim is to provide resources and guidelines that inform and support entrepreneurial ideas. For further information or expert advice, do get in touch with us at 3E Accounting Singapore.
What is a Courier Business?
A courier business is about delivering packages, messages, or goods from one place (or person) to another. This can range from within the city to international locations. As a premium service, they differ from the regular postal service by offering security, speed and other value-adds.
The courier business still has strong roots in the ‘usual way of doing business. As part of the postal services sector, delivery of goods, packages, and mail occur via trucks, cars, bikes, etc. While technology is transforming the industry, it’s primarily in tracking or inventory software development. Drone type of deliveries are making headlines but are still some way off from becoming the norm.
Currently, the logistics, transportation and storage sector encompass the following business models:
- Small package deliveries
- Freight transportation and forwarding
In Singapore, popular business models include those adopted by Park N Parcel, TaQbin, etc. Hence, your courier business can be deliveries via bicycle or motorcycle, car or van for larger goods, etc. For cross border or international transportation, a fleet along the logistics chain might be more appropriate.
Why Start a Courier Business in Singapore?
People and businesses want quick, reliable, and economical delivery of goods and a smooth logistics chain. Starting a courier business in Singapore can turn out to be a very lucrative business idea indeed. Singapore, with its agile economy, is a robust international transhipment hub.
The logistics and storage sector brought in USD6.8 billion to Singapore’s gross domestic product (GDP) in 2019. Firms such as GlaxoSmithKline, UPS, DHL, etc., have their regional headquarters and supply chain management centres in Singapore. The Government’s Industry Transformation Programme is investing USD4.5 billion in transforming Singapore’s logistics infrastructure.
With its world-class infrastructure and connectivity, Singapore is a key transport hub between Southeast Asia and the world. Reliable delivery and courier services maintain the country’s competitiveness, boost connectivity, and increase consumer satisfaction. Along with attractive tax regimes and a diverse and multi-talented workforce, Singapore has much to offer. Entrepreneurs starting a business here benefit from good governance, stability, and the perfect commercial gateway into Southeast Asia.
What Does a Courier Business Need?
A courier business is quite versatile and flexible – you can be a one-person show or own a delivery fleet. You can even buy a franchise from an already established courier company. However, before you start, it’s best to do some due diligence, which begins with a written business plan. As part of the compliance process, you will need a three-year business plan for submission.
Check out the competition, do a quick market study, and have a serious look at available funding and resources. You may also want to source out start-up funding opportunities such as angel investors or crowdfunding. A home-based business may be a viable start as you need only a website, smartphone, and vehicle. Check out the Singapore Home Office Scheme for more information on setting up a business from home. You can also take help from company incorporation services.
If budget isn’t an issue, consider renting a warehouse for storage and office space. Look into the staffing needs and either buying or leasing your delivery vehicles. Most importantly, invest in reliable technology as this can make or break your business. A large part of the budget should include websites, mobile apps, inventory systems, logistic and tracking software, etc.
Key Steps in Starting a Courier Business in Singapore
Start your business in Singapore the right – and legal – way by either registering or incorporating your company. Use your Singpass to log in to BizFile, the Accounting and Corporate Regulatory Authority’s (ACRA) company registration platform. Follow the guidelines, submit the relevant documents, pay the required fees, and wait for the approval.
If you’re a foreign investor or don’t have a Singpass account, then get in touch with us. 3E Accounting is an award-winning corporate service provider in Singapore offering comprehensive and customisable incorporation packages. In fact, most modern entrepreneurs engage business solution firms like 3E Accounting to take care of all the legwork. This enables them to focus entirely on running their business and is the best utilisation of resources.
Whether you’re going at it yourself or engaging outside help, company incorporation begins by choosing a business structure. We have a fantastic beginner’s guide on Singapore company registration that can aid you in making an informed choice. You’ll get comprehensive information about the types of business structures available in Singapore. This includes sole trader, limited partnership, limited liability partnership, limited company, subsidiary, branch office, etc.
It’s essential to choose carefully as this type of business can provide domestic and international opportunities. Your entity should fit your business model the best, and if you’re unsure, 3E Accounting is ready to assist. Once you’ve selected the most viable business structure, the next steps include the following:
- Select a name per ACRA’s ‘naming’ rules.
- Collate incorporation documents – i.e., Articles and Memorandum of Association, registered address, directors and shareholders information, etc.
- Pay the relevant fees.
- Register for taxes with the Inland Revenue Authority of Singapore (IRAS).
- Open a bank account.
- Invest in insurance explicitly created for courier companies.
What Approvals Do You Need for a Courier Business in Singapore?
Generally, businesses in Singapore do not require licences and permits, but this depends on the specific business activity. The Postal Services Act, which established postal services licences, regulates Singaporean courier businesses. All approvals come from the Infocomm Media Development Authority (IMDA) and require the submission of a three-year business plan.
IMDA’s website offers comprehensive guidelines on the relevant licences and how to apply for them. To start your business, you will need to obtain one of the licenses listed below:
- Postal Service Operator License
- Express Letter Services (Class) License
Other approvals and permits can include the following:
- Register all your business vehicles with the Land Transport Authority (LTA) of Singapore.
- Advertising or Signboard Licence from the Building and Construction Authority (BCA).
- If you employ foreign workers, you will need work visas or valid passes from the Ministry of Manpower (MOM).
- Register with Singapore Customs if your courier business will involve import or export activities.
To ensure you don’t miss out on compliance requirements, it’s best to get the experts on board. 3E Accounting Singapore has years of experience, and our team of experts will ensure your business operates seamlessly.
How to Grow Your Courier Business
While the demand for courier services in Singapore is high, the competition is also quite keen. Having a great website along with an active social media presence are de rigueur these days. To stand out from the competition, you will need to niche down and offer more value-adds.
A great way to do this is by adopting disruptive strategies – for example, offer half-day or same-day deliveries. You can niche by specialising in remote areas or handling special deliveries such as pets, etc. You can even start a subscription type of service, offering discounts for yearly sign-ups.
Optimise your delivery service with the latest in technology that will allow you to plan your routes efficiently. This can even facilitate outsourcing to other couriers to ensure efficiency, safety, and speedy deliveries. By leveraging on smart technology and strategies, you’ll build up customer loyalty in no time.
In the world of transportation and storage, opportunity abounds for the intrepid entrepreneur. Starting a courier business in Singapore will enable you to have a slice of this very profitable pie. All you need is hard work, clever strategies, and the dedication to build an excellent reputation.
If you’re looking for a seamless business start-up and incorporation experience, get in touch with us at 3E Accounting. We offer comprehensive company incorporation services, and all our packages leverage cutting-edge methodologies and solutions. Start your entrepreneurial journey on the right note – contact 3E Accounting today to work with the best.