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Beginner’s Guide on Starting a Maritime Business in Singapore
From stone age dugout canoes to solar-powered catamarans, humans have traversed the seas for almost two millennia now. As an essential industry, maritime has formed the backbone of global trade and commerce. Starting a maritime business in Singapore is a siren call that any savvy entrepreneur will find hard to resist. Maritime trade has always been central to commerce, and Singapore’s geopolitical position makes it an internationally sought-after hub.
Singapore has an impeccable global reputation as a strategic maritime centre with world-class service and infrastructure. According to the Maritime and Port Authority (MPA), Singapore is a bustling port indeed. With port connections to over 120 countries, approximately 130,000 ships use Singapore as a port-of-call annually.
Singapore is the second-largest container port in the world as of 2020 and a leader in transhipment trade. The city-state also is the world’s top bunkering port and has set new standards for the world to follow. As the sector brings in an average 7% gross domestic product (GDP), Singapore’s maritime industry is worth exploring.
This guide explains how you can set your sails to success with a business in Singapore’s maritime industry. We cover the basics, offer some sound advice and crucial information on compliance. It’s time to don your captain’s hat and catch the high tide.
What is a Maritime Business?
When starting a maritime business, it is essential to understand what this industry is all about. At its most basic, the word ‘maritime’ can mean anything with a connection to the sea. The sector includes seafaring logistics, i.e., travel or transportation of people and goods, and other activities. In a nutshell, it covers all commercial activities and enterprises that are related to the maritime environment.
The maritime business links to but is distinct from the shipping business. In a shipping business, the focus is cargo logistics – i.e., handling cargo or shipments. Thus, a shipping business does not necessarily need to own ships. Rather, it is involved in the business of ‘shipping’ or moving cargo from one destination to another.
In a maritime business, the trade activity includes marine business and services, shipping and ports, and management services. Hence, amongst others, a maritime business:
- Can own seafaring vessels.
- Employ people to work on ships or at ports.
- Operate shipyards or dry docks.
- Own maritime warehouses and offer brokerage services.
- Repair, supply, or maintain ship parts.
- Design, construct, or manufacture vessels.
- Handle freighting and shipping services.
It’s easy to confuse one for the other, but you have to be clear regarding what you want to start. Each type of business has different regulations. Getting it right from the get-go is crucial to ensure a seamless transition to success. Engaging professional Singapore company incorporation services is one way to ensure everything is in proper order.
Why Start a Maritime Business in Singapore?
As mentioned above, Singapore is a fantastic place to start any business. It has developed infrastructure and connectivity, competitive tax regimes and double taxation treaties, and a diverse multi-talented workforce. Aside from cutting-edge research and development, the maritime industry in Singapore receives support from robust government initiatives.
The MPA has introduced rapid digitalisation to upscale Singapore’s port ecosystem, driving emerging technologies and infrastructure development. Sustainable productivity, smart manufacturing and autonomous technology provide a competitive 21st-century edge to Singapore’s maritime industry. With the fifth-largest ship registry in the world, signing up with the Singapore Registry of Ships (SRS) is easy.
Tax concessions under the Maritime Sector Incentives (MSI) and Approved International Shipping (AIS) Enterprise Schemes are guaranteed until 2037. They offer exemptions on income, etc., to encourage Singapore’s maritime businesses. Energy-efficient businesses can also enjoy reductions in registration fees, annual rebates, and concessions on port fees.
There are numerous assistance packages available for small, medium enterprises (SMEs) and start-ups in Singapore. These range from training programmes to workforce development funds. Some include:
- The Maritime Leadership Programme (MLP)
- Maritime Seed Fund (MSF)
- The Maritime Finance Incentive (MFI) Scheme
- Maritime Cluster Fund
- The Maritime Innovation and Technology (MINT) Fund
Key Steps in Starting a Maritime Business in Singapore
You need to register a company to start a maritime business in Singapore. Incorporation is a statutory requirement and offers legality as well as ease of doing business. The process is straightforward, and there are two ways to go about it.
One way is to log on to BizFile, run by Singapore’s Accounting and Corporate Regulatory Authority (ACRA). This Government website is a comprehensive online platform that offers detailed guidelines for all things business. Alternatively, you can engage 3E Accounting Singapore and let us handle the whole process for you. Our guide to company registration in Singapore offers a detailed read on the entire process and our services.
A simple roadmap to the whole registration process would encompass the following:
- Registering a suitable company name with ACRA – several ‘naming rules’ apply, and it’s best to check before submission.
- Choosing a suitable business entity – sole proprietor, partnership, a local or foreign company, limited partnership or limited liability partnership.
- Collating information and documents – includes registered address, details of directors and shareholders, Articles and Memorandum of Association, etc.
- Submission and payment of the appropriate fees.
- Setting up an office and hiring staff.
- Registering for taxes, where appropriate, with the Inland Revenue Authority of Singapore (IRAS).
- Registering your vessel(s), if any, with SRS.
What Approvals Do You Need for a Maritime Business in Singapore?
The next step after registering your company and taxes are getting licences and permits. Approvals for a maritime-related business will depend on the exact nature of the trade activity. Ship registration is fast, easy, and cost-effective, with discounts offered if you own more than one vessel. You can learn more about Singapore’s Maritime Legislation on the MPA website.
Other maritime licences and permits include any of the following:
- Permits to launch a new vessel.
- Ship Registration Certificate to carry cargo or passengers.
- Employment Passes for foreign workers.
- Harbour Craft Licence for commercial operation of ships.
- Port Clearance Certificate to operate ships outside Singapore’s port.
- Port Limit Manning Licence, which allows crew members to work onboard vessels.
- Ship Sanitation Control Certificate.
- Ship Station Licence for radio-communication equipment onboard vessels.
- Miscellaneous approvals for transit of dangerous goods and cargo, etc.
Aside from these, your company may need specific licences depending on your trade activity. For example, you need a permit if your maritime business doubles as a travel agency. Similarly, selling food and beverage requires a food shop licence. It’s always best to check with the relevant authorities to ensure proper compliance.
For more information regarding the approvals you need, contact a Singapore corporate service provider.
How to Turn the Tide for Your Maritime Business
The maritime industry in Singapore is a vibrant ecosystem that includes the following:
- Recreation and Education – such as tours and leisure activities, maritime qualifications and certifications, etc.
- Service and Management – such as logistics, surveying, legal, insurance and financing, etc.
- Engineering and Maintenance – such as vessel and offshore rig designing and building, docks and shipyards, etc.
- Ports and Shipping – such as bunkering services, transhipment, charters, agency services, etc.
Your business can fit into any of these categories or offer a niche across one or more of them. An ancillary service that offers end-to-end solutions is an excellent way to diversify your core business as well. Adopting differentiating tactics via innovation can upgrade products, services as well as pricing. Consider automation of systems and adopting autonomous or robotic technologies, in line with MPA’s digitalPORT@SG™ initiatives.
Next-generation smart shipping and maritime technologies are on the rise. Thus, leveraging them is crucial in maintaining a competitive edge, lowering costs, and improving service and operational efficiency. Impeccable service that complements digitalisation is one way to stand out from the competition, regardless of category. Having well-trained staff and offering competitive packages will seal the deal every time.
Other tried and tested methods should not be ignored, such as having a website to increase organic traffic. Along with an active social media presence, you’ll be able to increase brand awareness for your business.
Singapore’s maritime industry is looking at a 2% compound annual growth rate (CAGR) forecast between 2021 to 2026. As a leading International Maritime Centre (IMC), Singapore offers modern facilities, state-of-the-art infrastructure, and superior ease of doing business. Starting a maritime business here is a great way to capitalise on Singapore’s exponential engine of commercial growth.
As a premier Singapore corporate service provider, 3E Accounting Singapore is your go-to business solutions firm. We provide comprehensive and fully digitalised solutions for all your incorporation and compliance needs. Our team of global professionals offer customisable service for all your business requirements. For more information, contact 3E Accounting today.