Free Trade Zones
Updated: Jun 2, 2020
Free Trade Zones (FTZs) are designated areas in Singapore where the payment of duties and taxes (e.g. GST) are suspended when goods arrive in Singapore and are stored in the FTZ. Goods imported and stored in FTZs are considered as goods under customs control. Goods can be imported and sold or re-exported without the need to account for customs or excise duties or GST.
Singapore has nine Free Trade Zones (FTZs) established in five geographical areas operated by three FTZ authorities, namely PSA Corporation Ltd, Jurong Port Pte Ltd and the Changi Airport Group (Singapore) Pte Ltd.
The nine FTZs are Brani Terminal, Keppel Distripark, Pasir Panjang Wharves and Terminal, Sembawang Wharves, Tanjong Pagar Terminal, Keppel Terminal, Jurong Port, Changi Airport Group and the Changi Airport Cargo Terminal Complex.
They provide a wide range of facilities and services for storage and re-export of dutiable and controlled goods. Goods can be stored within the zones without any customs documentation until they are released in the market and they can also be processed and re-exported with minimum customs formalities.
FTZs are meant to support Singapore’s role as a centre for entrepot trading and transhipment activies. They offer free 72-hour storage for import/export of conventional and containerized cargo and 140-day free storage for transshipment/re-export cargo. The primary function is to facilitate the transshipment of overseas goods via Singapore, that is, goods placed temporarily in the FTZ before being loaded onto another ship or aircraft for export without requiring customs clearance.
FTZs are used primarily for the temporary storage of goods, as duties and Goods and Services Tax (GST) on imported goods depositd in an FTZ is suspended, and is only payable when the goods leave the FTZ and enter customs territory for local distribution and consumption. GST is not payable on supply made in FTZ if the goods supplied are meant for transshipment or re-export.
Under our GST regime, unless special schemes are applicable, GST is payable on the importation of goods into Singapore. Import GST is payable regardless of whether the importer is GST-registered or not.
If goods are imported and stored in FTZs, import GST is suspended and no GST is payable. In addition, goods in FTZs may be supplied (bought and sold) many times before they are removed. To free businesses from the burden of having to account for GST on these multiple supplies of goods, such supplies (except for supplies of local goods in FTZs which remain taxable) are disregarded for GST purposes.
If you move your overseas goods from an FTZ out of Singapore (i.e. transshipment) without entering customs territory, it is outside the scope of GST. Thus, you are not required to report such movement of overseas goods in your GST return.
Duty and import GST are only payable when the goods:
Are consumed within the FTZ; or
Leave the FTZ and enter into customs territory for local sales or domestic consumption
You are required to take up an import permit with the Singapore Customs and pay import GST on overseas goods used or consumed within an FTZ.
When you move the overseas goods from the FTZ into customs territory, import GST is payable and you are required to take up an import permit and pay import GST. Import GST is not payable if you are removing the goods under the following circumstance: you are moving the goods directly from an FTZ into another FTZ, a Warehouse or an Excise Factory (EF).
FTZs are also subjected to the same laws and regulations of Singapore as businesses and activities outside FTZs. Permits are still required, except for transhipment of non-controlled goods within the same FTZ and goods in transit. The Immigration & Checkpoints Authority (ICA) is stationed at the checkpoints to clear goods from the FTZs.
For more information or enquires, please contact Bestar.