Global Trading Programme of Singapore
There is a program called Global Trader Program in place in Singapore. This article is intended to teach you all about the features of this program and its benefits along with the qualifying criteria. GTP was initiated in the year 2001 with the objective of encouraging trading companies to make Singapore their center for carrying out their activities. It has been a phenomenal success till date, helping companies to streamline their procurement as well as distribution. GTP was conceived as a merger of the erstwhile programs called Approved International Trader and Approved Oil. These programs were initiated in the years 1990 and 1989 respectively. Both programs got replaced by GTP that was a more comprehensive program. This allowed trading companies to diversify and trade a larger number of products and services. In earlier times, AOT remained confined with energy related products whereas AIT was used to deal in products that were not related with energy.
Because of this development, there was a progressive increase in the number of companies switching to GTP and today it covers more than 270 companies in Singapore. All these companies also benefit from a concessional tax regime of GTP when they qualify through a trade income at a certain level. These companies have benefitted tremendously because of the strategic location of this island nation close to important international ports and airports. They have also benefitted because of Singapore being close to raw material markets as well as consumer markets.
Global Trader Scheme (GTP)
International Enterprise, in its bid to encourage trading in Singapore, has introduced new incentives in its scheme called GTP. The criteria to be included in this scheme has been simplified and made easier for the companies and the list of products included in GTP has been widened by adding petroleum and petroleum products. Other products that have been added include new ones in edible products and agricultural commodities, building and construction materials, industrial and consumer products, machinery and equipment, metals and minerals, electrical and electronic products, and so on. There has a been a new sunset clause that has been added to GTP since 31 March 2012.New companies can be added as a GTP company and avail all incentives under the new GTP program for a period of up to 5 years. These changes will strengthen the commodity markets in the country and help companies in the GTP network to be better able to handle risk management. These changes are also expected to generate many other benefits in the form of spin offs for financial sector on the whole. Apart from these changes, rest of the features and provisions of GTP remain practically the same as before. A concessional rate of 5—10% is applied on a new GTP company depending upon its trading income. This rate remains applicable both on the buy as well as sell leg of the transactions of a GTP company. The trades or the transactions of the GTP companies can include offshore trading where goods actually do not pass through the waters of Singapore, trans-shipment, and re-export (where there is a value addition to a product before it is re-exported).
To attract international companies that have been performing well to its GTP network, IE gives them GTP status for a 3 year period that is renewable after 3 years. Such a company can apply for a 5 years GTP company status after the completion of this 3 year period if it achieves growth projections and establishes a global network making Singapore as its base.
Companies that can apply for GTP status
IE says that a company must fulfill three conditions to be able to apply for GTP program.
- A company that has had a good record of offshore business consistently
- A company that has huge business relating expenditure in Singapore
- A company that employs Singapore traders
However, a company does not automatically qualify for GTP status if it fulfills these criteria as there are many other considerations such as
- Contribution to the economy of the country
- Use of services, particularly banking and financial sector inside Singapore
- Use of Singapore infrastructure that includes transportation, arbitration, and logistics
- The contribution of the company to development of talent and training of manpower in the country