Singapore - Country Commercial Guide
Distribution and Sales Channels

Discusses the distribution network within the country from how products enter to final destination, including reliability and condition of distribution mechanisms, major distribution centers, ports, etc.

Last published date: 2020-09-16

Overview

Singapore’s distribution and sales channels are simple, direct and open to the participation of foreign firms established in Singapore.  Because of Singapore’s role as a regional trading hub, most local distributors will also have knowledge of regional distribution rules and regulations.  Most consumer goods are imported by stocking distributors who resell to retailers.  Some goods are imported directly for sale in the importer’s own retail outlets.  Singapore has a well-developed financial system, which offers a full range of export finance instruments.

Using an Agent to Sell US Products and Services

Many American exporters use agents or distributors to serve the Singapore market and other markets in Southeast Asia.  Finding prospective partners usually presents no problem as Singapore firms are aggressive when it comes to representing new products and typically respond enthusiastically to new opportunities.  Most American companies that use the U.S. Commercial Service (CS) Singapore matchmaking and promotion services in Singapore find several interested agents or distributors.  Because of the relatively small size of the Singapore market, potential partners often ask to cover regional territories.  With a strong history of trade, Singaporean companies are particularly successful in taking products to the region.  CS Singapore offers a wide range of programs and has an excellent record of success in introducing U.S. firms to the market.  A list of services offered by CS Singapore can be obtained from our website.

Establishing an Office

American firms wishing to establish a presence in Singapore have several straightforward options to do so.  They can establish a Representative Office (RO), register as a Branch of the parent, or incorporate as a Singapore company.  General information on establishing an office can be found online.

If an American company wishes to carry on operations in Singapore, it should register a branch office or incorporate a local company with the Accounting and Corporate Regulatory Authority (ACRA).  ACRA publishes an excellent guide that takes the first-time registrant through the process of establishing a branch office or incorporating in Singapore.

Representative Office

Setting up a Representative Office (RO) in Singapore can be a good way for American firms to explore business opportunities in Singapore or the region.  ROs in banking and insurance need to register with the Monetary Authority of Singapore  and meet the guidelines or requirements laid out by the MAS.  ROs in all other industries need to register with Enterprise Singapore.

ROs can only carry out market research, conduct feasibility studies or work as a liaison on behalf of the parent company.  ROs may not conduct business directly or on behalf of the parent company.  ROs cannot ship, transship, or store goods in Singapore.  American firms can either work through an agent or distributor to do so or establish their own commercial presence. 

Branch Office

For Branch Offices, the Companies Act requires a foreign company to appoint a minimum of one authorized representative who is ordinarily resident in Singapore, i.e. one who is a Singaporean Citizen, a Singapore Permanent Resident, or a person who has been issued an EntrePass.

Establishing a Singapore Business

American firms can also register a sole-proprietorship, partnership, limited liability partnership, or incorporate a company in Singapore.  For a sole proprietorship the process takes about one day, while more complex business entities can take up to six weeks and require lawyers and accountants to assist with incorporation documents.  A point to bear in mind is that registration/incorporation of a company does not automatically mean that expatriate staff can be assigned to Singapore.  Foreign staff must obtain employment passes from the Singapore Ministry of Manpower.

Franchising

Singapore is home to a wide variety of franchise concepts.  Foreign franchises are well received and the United States is by far the largest supplier of foreign franchises in the country.  There are American franchises in practically every industry.  McDonald’s, Burger King, KFC, A&W, Shake Shack, Five Guys, Krispy Kreme, Subway, Starbucks, Ben and Jerry’s, Gymboree, New Horizons, Mister Minit, Avis, Toys R Us, Comfort Keepers, Contours Express, and many others have operations in Singapore.

The market is saturated but Singaporeans continue to seek out fresh franchise concepts to introduce into the country.  The success of selling a franchise in Singapore is based on a number of factors including brand name, up-front costs and royalties, the concept’s uniqueness, and the flexibility of the franchise agreement.  U.S. franchisors should note that real estate in Singapore is prohibitively expensive and getting a good location is a challenge, especially for those in the retail and F&B business.

With its strategic location and well-developed infrastructure, Singapore serves as the regional showcase and distribution center for U.S. franchisors wishing to enter Asia markets.  There have been instances where visitors from the region saw a franchise concept in Singapore and were interested in bringing it back to their own countries.  In 2019, Singapore attracted over 19.1 million visitors from around the world.  The country’s multi-ethnic society also makes it an ideal location for foreign franchisors to test their concepts and use the reaction to gauge the acceptance of their franchise in Asia.  There are also opportunities for U.S. franchisors to work with Singapore companies to access markets in nearby countries.  Singapore investors may buy franchise licenses for additional markets in the Southeast Asian region and not for Singapore alone.

Direct Marketing

The direct marketing industry in Singapore began in the early 1990s and now includes direct mail, telemarketing, television sales, mail order, call centers, fulfillment, and eCommerce firms.  The Data-Driven Marketing Association of Singapore (DMAS) represents both users and service providers.  The direct marketing industry is well supported by service companies including: Singapore Post, Singapore Telecom Call Center, Teledirect, TNT International Mail, Ogilvy One and MMS Consultancy, among many others. 

The DMAS, a self-regulatory body, was established in 1983.  It provides a forum for all direct-selling companies in Singapore to discuss problems of common concern and to codify a high standard of business practices throughout the industry.  The DMAS has adopted a Code of Conduct by which member-companies in the Association must abide by in every aspect of business.  Through the Code of Conduct, DMAS aims to further inculcate the spirit and practice of ethical direct-selling within its member-companies, setting examples for others to follow.

Joint Ventures/Licensing

Foreign investors are not required to enter into joint ventures or cede management control to local interests.  In Singapore, local and foreign investors are subject to the same basic laws.  Apart from regulatory requirements in some sectors, the government screens investment proposals only to determine eligibility for various incentive regimes.  Singapore places no restrictions on reinvestment or repatriation of earnings or capital. 

Licensing is also a viable alternative in Singapore.  With one of the strongest IPR protection schemes in Asia, a well-developed legal framework and an advanced manufacturing base, Singapore is an attractive location for American licensors.

Express Delivery

Changi Airport serves more than 100 airlines flying to some 400 cities in about 100 countries and territories worldwide.  Among these, 26 airlines operate more than 300 weekly scheduled freighter flights linking Singapore to about 52 cities in 18 countries.

As one of the world’s busiest airports for air cargo, Changi Airport handles over 2.12 million tons annually, with transshipment volume accounting for almost half of the throughput.  At Changi Airport, stringent standards are set to ensure that ground handlers deliver world-class services to the cargo agents and the shippers while cargo clearance through the Customs checkpoints remains seamless and efficient.

Performance Standards

Target

Cargo documents available within 2 hours of passenger aircraft arrival

90%

Cargo documents available within 4 hours of freighter aircraft arrival

90%

Cargo available within 3.5 hours of passenger aircraft arrival

90%

Cargo available within 5.5 hours of freighter aircraft arrival

90%

Due Diligence

Entities wanting to carry out business in Singapore must register with the Accounting and Corporate Regulatory Authority (ACRA).  The U.S. Commercial Service Singapore offers the International Company Profile service to American firms wishing to check the bona fides of existing or potential partners.  Alternately, U.S. firms can run a check on Singapore companies by accessing the ACRA database.  Other credit agencies include Dun & Bradstreet.