Global Trader Programme in Singapore

Global Trader Programme in Singapore | Bestar

Global Trader Program Inquiry

Global Trader Programme in Singapore

The Global Trader Programme (GTP) in Singapore is designed to attract well-established international trading companies to use Singapore as their regional or global base for conducting trading activities. The program offers significant tax incentives to approved companies. Here's a breakdown of the requirements and benefits:

Eligibility Criteria:

To be eligible for the GTP, your company generally needs to meet the following criteria:

• Be a well-established international trading company: This usually means having a significant global network and a good track record in international trading, sourcing, procurement, distribution, and transportation of eligible goods and commodities. This can include both large and medium-sized enterprises with high growth potential.

• Establish a regional base in Singapore: You should intend to make Singapore the principal location for your offshore trading activities and related support functions. These functions can include:

  • General and administrative management control

  • Business and investment planning and coordination

  • Financial control and treasury functions

  • Market development and planning

  • Logistics management (including warehousing and freight services)   

• Conduct substantial offshore trading activities: Your primary business activity should involve significant offshore trading. This includes:

  • Offshore trade: Goods do not pass through Singapore.

  • Trans-shipment trade: Transferring cargo from one mode of transport to another.

  • Re-export trade: Only the non-value-added portion of the re-export trade qualifies.

• Incur significant local business spending in Singapore: You need to demonstrate a commitment to spending a considerable amount on local businesses within Singapore to support your trading activities.

• Employ a substantial number of experienced trading professionals in Singapore: This typically includes individuals involved in roles such as risk management, sales and marketing, or sourcing/procurement. These professionals can be Singaporean or expatriate and may include senior management. The minimum number is often around three professionals.

• Meet benchmark criteria: While specific benchmarks can be subject to review, typical benchmarks include:

  • Minimum Annual Turnover: Usually around USD 100 million.

  • Minimum Annual Local Business Spending: Typically around SGD 3 million.

  • Minimum Trading Professionals Employed: Generally at least three.

  • If your company does not currently meet these benchmarks, you may need to demonstrate a clear plan and commitment to achieving them within the projected incentive period.

• Demonstrate economic contribution to Singapore: Your overall business plan should illustrate how your activities in Singapore will contribute to the local economy, including the use of Singapore's banking and financial services, logistics, trade arbitration, and manpower training and development.

• Qualifying Commodities: The traded goods typically fall within categories such as:

  • Electronic and electrical products

  • Consumer products

  • Building and industrial materials

  • Industrial products

  • Energy commodities and products

  • Agricultural commodities and bulk edible products

  • Minerals

  • Machinery components   

Benefits of the Global Trader Programme:

Approved companies under the GTP can enjoy significant tax advantages, primarily a reduced corporate tax rate on qualifying trading income.

• Concessionary Tax Rate: You can benefit from a reduced corporate tax rate of either 5% or 10% on qualifying trading income for a period of three or five years, with the possibility of renewal for the 5-year status subject to meeting ongoing requirements and demonstrating sustained growth.

  • A 5% rate may be granted to companies with a substantial portion of their business conducted in Singapore, utilizing Singapore's financial services and employing a significant number of local professionals.

  • A 10% rate is often initially offered for a non-renewable period of three years to medium-sized multinational businesses establishing their global trading operations in Singapore. These companies can then apply for a renewable 5-year period with the same 10% rate upon demonstrating successful development and a global trading network.

• Qualifying Income: The concessionary tax rate typically applies to income derived from:

  • Physical trading

  • Brokering of physical trades

  • Derivative trading income

  • Income from structured commodity financing activities

  • Treasury activities and advisory services related to mergers and acquisitions   

Application Process:

The general process involves:

1. Initial Inquiry: Contact Enterprise Singapore (formerly IE Singapore) to express your interest in the program. You may need to fill out an inquiry form on their website.

2. Preliminary Assessment: Enterprise Singapore will review your company's profile and proposed activities to determine initial eligibility.

3. Formal Application: If deemed potentially eligible, you will likely need to submit a detailed application, including your company's business plan, financial projections for your Singapore operations, and information on your global network and track record.

4. Due Diligence and Negotiation: Enterprise Singapore may conduct a thorough review of your application and may engage in discussions or negotiations regarding your proposed activities and commitments in Singapore.

5. Approval: If your application is successful, you will receive formal approval for the GTP status, outlining the specific concessionary tax rate and the duration of the incentive.

It's highly recommended to engage with experienced tax advisors or consultants in Singapore, such as Bestar Singapore, who can assist you with assessing your eligibility, preparing your application, and liaising with the relevant authorities. They can provide tailored guidance based on your specific business circumstances.

How Bestar can Help

Engaging Bestar can be incredibly beneficial throughout the entire Global Trader Programme (GTP) application and beyond. Here's how we can help:

During the Application Process:

• Eligibility Assessment: We possess in-depth knowledge of the GTP criteria and can analyze your company's profile and activities to provide a realistic assessment of your eligibility. This helps you avoid investing time and resources in an application that is unlikely to be successful.

• Understanding Complex Requirements: The GTP requirements can be nuanced. Bestar can provide clarity on aspects like "substantial offshore trading activities," "significant local business spending," and the definition of "trading professionals." We can interpret these requirements in the context of your specific business.

• Structuring Your Singapore Operations: Bestar can help you structure your Singapore operations in a way that maximizes your chances of GTP approval and optimizes the potential tax benefits. This might involve advice on the scope of activities to be conducted in Singapore and the roles of key personnel.

• Developing a Strong Business Plan: A compelling and well-articulated business plan is crucial for a successful application. Bestar has experience in crafting such plans, highlighting your company's global track record, the strategic importance of Singapore to your operations, your projected economic contributions, and your commitment to meeting the GTP benchmarks.

• Financial Projections: We can assist in preparing realistic and robust financial projections for your Singapore operations, demonstrating your ability to meet the required turnover and local business spending thresholds.

• Preparing the Application Documents: The application process involves significant documentation. Bestar can ensure that all necessary documents are accurately prepared, complete, and presented in a way that aligns with Enterprise Singapore's expectations. This can significantly reduce the risk of delays or rejection due to incomplete or inaccurate submissions.

• Liaising with Enterprise Singapore: We can act as a point of contact with Enterprise Singapore, facilitating communication, addressing queries, and navigating the application process efficiently. Our established relationships and understanding of the agency's processes can be invaluable.

• Negotiation Support: If there are discussions or negotiations with Enterprise Singapore regarding your proposed activities or commitments, Bestar can provide expert advice and support to ensure a favorable outcome.

Post-Approval and Ongoing Compliance:

• Tax Planning and Optimization: Once your GTP status is approved, advisors can help you structure your trading activities and financial flows to maximize the benefits of the concessionary tax rate. Wey can also advise on other relevant Singaporean tax laws and regulations.

• Compliance and Reporting: Maintaining GTP status requires ongoing compliance with certain conditions, such as meeting the agreed-upon spending and employment commitments. Bestar can help you track your performance and ensure you meet these requirements, as well as assist with any necessary reporting to Enterprise Singapore.

• Renewal Applications: If your GTP status is for a limited period, Bestar can assist you with the renewal application process, ensuring you present a strong case for continued benefits based on your track record in Singapore.

• Staying Updated on Regulatory Changes: Tax laws and regulations can change. Bestar stays abreast of these changes and can advise you on any implications for your GTP status and your overall tax obligations in Singapore.

• Risk Management: We can help you identify and mitigate potential tax risks associated with your international trading activities in Singapore.

In essence, Bestar acts as your expert partners, guiding you through the complexities of the GTP application and ensuring you can fully leverage the benefits of the program while remaining compliant with all regulations. Our expertise can save you time, reduce the risk of errors, and ultimately increase your chances of a successful outcome.

Please let me know if you have any more specific questions about any of these aspects!

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