7 Things To Know When Exporting To Singapore From Australia
Exporting goods to an international market like Singapore can be a fantastic way to build your brand overseas. This guide provides helpful information on how to export to Singapore to prepare your business for export.
According to the Department of Foreign Affairs and Trade, Singapore is the 8th largest market for Australian exports. Major exports include gold, crude & refined petroleum, animal oils & fats.
Before you get started with this guide, it may be helpful to understand more about export costs and what it takes for your business to start exporting. Our guide to exporting from Australia will provide you a great starting point for getting your business ready for export and learning about costs.
There are also lots of fantastic advice on how to export to Singapore here.
In this guide we’ll cover:
- Finding the right products to export to Singapore.
- Understanding the types of products you can (and can’t) export.
- How to export to Singapore.
- Costs to export containers from Australia to Singapore.
- Understanding licenses for exporting to Singapore.
- Export and import duty, tariffs, and taxes.
- Getting paid in foreign currency.
Finding the right products to export to South Korea
The key to a successful export to South Korea is a result of selling your products at a profit. Find out if your export products are in demand before you begin exporting. Keep in mind that South Korea manufactures low cost goods, so if you are trying to sell items that are already available, you could be facing tough competition.
- Avoid food and perishables — Food and produce are very expensive to export, since you need specialised shipping. Additionally, food exports are subject to strict criteria, so you’re best off avoiding them altogether.
- Avoid mass-produced, cheap goods — South Korea makes so many of these types of goods domestically, you’re never going to compete when you factor in the costs of manufacturing and logistics.
- Do your market research — Gmarket and Alibaba, both enormous online marketplaces, have a huge presence in South Korea — You can certainly sell through these marketplaces, and they’re a good place to start when it comes to market research. Additionally, look into specialised market reports on what sells in South Korea.
- Aim at aged care, and biotechnology products — Ideally, you’ll want to provide items that aren’t produced domestically in South Korea. These are current trends and opportunities in the market.
- Understand your margins and pricing — Exporting can eat into your margins. So make sure you’ve got a rock-solid understanding of all your costs and the price you want to sell at, and account for exchange rates to make sure you can still turn a profit.
Understanding the types of products you can and can’t export to Singapore
Both Australia and Singapore have limitations on what you can export and import.
Australia export restrictions
The Australian authorities prevent or restrict goods like some chemicals, biological materials, pharmaceuticals, animal and plant species, weapons, and more from export. You can find a complete list here. You should also learn what Australian Customs needs from you if you want to export.
Singapore import restrictions
Controlled imports include chewing gum, chewing tobacco, electronic cigarettes, cigarette lighters of pistol or revolver shape, controlled drugs, psychotropic substances, firecrackers, obscene materials, and more. For the full list, refer here.
The best ways to export products to Singapore
Getting your products into Singapore requires a fair bit of planning, applications for permits and arrangements. It can be good to hire an expert to help you out for the first couple of exports.
This is the process that typically goes into exportation from Australia to Singapore:
- You manufacture or purchase the items domestically, in Australia OR you manufacture them elsewhere and arrange for shipping from there to Singapore.
- You understand the various regulations, tariffs, and licenses you need to export.
- You arrange for international shipping from the point of origin to Singapore— For larger items and big quantities, you will typically use container cargo, for smaller quantities, you might use an international shipper like FedEx.
- On arrival of your goods in Singapore you pay the necessary duty, tariffs, and any other fees.
- You arrange for your goods to be held on your behalf in Singapore.
- You market your goods for sale in Singapore, often through a retail store, third-party marketplace, ecommerce website, or some other outlet.
- You sell your goods and arrange for them to be sent to your customers.
- You get paid and transfer your money back to Australia.
- You pay any necessary local taxes in Singapore and Australia.
Typical container costs — Shipping from Australia to Singapore
International shipping might not be as expensive as you think. According to the Sea Freight Calculator, the cost of renting a full container to ship goods from Australia to Singapore is approximately:
20 ft container — $978 USD
40 ft container — $1,300 USD
And according to Australia Trade, renting part of a container will cost you between $150 and $250 AUD per cubic meter or 1,000 kilos, whichever is greater.
Remember that these are only shipping costs — The cost of actually having your goods freighted from one port to another. They don’t include costs involved in getting your goods to a warehouse, insurance, duties, and other fees. Make sure you understand your total logistics costs so you can factor them into your pricing.
We’d advise you to compare a number of quotes from shipping companies and suppliers based on the type and quantity of goods you want to export.
Understanding licenses for exporting to Singapore
All goods being imported into Singapore is required to obtain an IN Permit through TradeNet and duty and/or GST must be paid at the time of importation.
The documents required to clear customs depend on the product you are exporting to Singapore. These documents include: pro-forma invoice, bill of lading / airway bill, packing list, certificate of origin, public health requirements, censorship regulations.
Note that the rules and regulations around importing and exporting to and from Singapore do change from time to time. Make sure you check with official sources to ensure you’ve always got the latest information.
Export and import tariffs, duties, and taxes for Singapore
Here are some estimates for the typical fees you’ll need to pay to import goods into Singapore. You typically won’t have to pay goods and services tax to Australian authorities for exporting from the country, although you may need to pay some processing fees.
In Singapore, you’ll likely have to pay the following:
- Consumption tax — 7% levy on all imports and on most goods and services (GST)
- Excise Tax — Levy on alcoholic beverages, tobacco products, petroleum and motor vehicles.
As you can see, there is some work involved in exporting to Singapore, but if you’ve already made good inroads into the Australian domestic market, it can be a great next step. Make sure you do your research, understand what you’re getting into, and plan carefully. Then you’ll be ready to launch, and sell your products.
What about receiving money in foreign currency?
Singaporean businesses will typically pay you in US dollars or Singapore dollars. If you are exporting into Singapore, consider using the TransferWise Borderless Account.
Until recently, Australian businesses had 3 options to receive money from overseas customers:
- Get paid into a local Australian based, Australian dollar account.
- Open a Foreign Currency Account, usually with a bank
- Use a payment gateway like PayPal, Braintree or Stripe
Unfortunately, these options are usually filled with fees, balance requirements or massive exchange rate mark-ups.
In October 2017, TransferWise released the Borderless account in Australia and it’s really impressive. It allows you to receive, hold and transfer 27 different currencies.
A unique feature that is particularly useful for businesses, is the ability to have local bank account details in USD, EUR, GBP or AUD. This makes receiving money from overseas customers exceptionally easy.