1. Launched in June 2001, the Global Trader Programme is a merger of the Approved Oil Trader (AOT) and the Approved International Trader (AIT) programmes which started in 1989 and 1990 respectively.
2. The Approved Oil Trader (AOT) Programme aimed at capitalising on Singapore’s growing role as a refining centre in the region.
3. Shortly thereafter, the Approved International Trader (AIT) Programme was launched to attract non-oil companies.
4. Twenty years later, both the Programmes were merged into the GTP which now allows for an expanded product base for companies to trade in, including both energy as well as non-energy products and commodities.
5. The main aim behind initiating such a programme was to boost Singapore’s position as the preferred regional base for the trading operations of global traders. The GTP aims to achieve its objective by allowing companies (who are part of its programme) to benefit from a 10% concessionary tax rate that is offered on their qualifying trade income for a five year renewable period.
6. Furthermore, in 2003 the Singapore Government announced that high-growth medium sized international trading companies that are keen to choose Singapore as their regional base for trading activities, can be considered for the concessionary tax rate for an initial, non-renewable 3-year period.
7. During this period the companies can establish and develop their regional or global trading network, with Singapore as their base. Once the companies are able to demonstrate sustainable growth projections that are in line with the requirements of the GTP, they can apply for the 5 year renewable GTP scheme after the initial 3 year pear period.
ELGIBLE FOR GLOBAL TRADER PROGRAMME
1. You can apply to be a part of the Global Trader Programme if:
2. You are a well established international company, (large or medium sized) and carry out international trading, procurement, distribution and transportation of qualifying commodities and products.
3. You intend to use Singapore as your regional base for your principal offshore trading activities, business activities and support functions, including:
- 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
- You are be a bona fide company with a global network and good track record
- You can ensure that you will:
- principally conduct substantial offshore trading activities
- incur a significant amount of local business spending in Singapore
- employ a substantial number of experienced trading professionals in Singapore
- make significant use of Singapore’s banking and financial services and its ancillary services (e.g. trade and logistics services, trade institutes and trade arbitration services etc. )
- impart manpower training and aid in the development of trading expertise in Singapore
4. In addition, the applicant company will be required to meet the following benchmark criteria. If the company does not meet the benchmark criteria, it will be required to showthat it can commit to these benchmarks for its projected incentive period:
- Minimum Annual Turnover – USD 100 million
- Minimum Annual Local Business Spending – SGD 3 million
- Minimum Employment of Trading Professionals – 3 (involved in either procurement/sourcing, sales & marketing, risk management). May include senior management and can either be local or expatriates.
QUALIFYING AREAS UNDER GTP
1. The following products and commodities are currently allowed under the GTP. This list is periodically reviewed and updated by the authorities.
- energy commodities and products
- agricultural commodities and bulk edible products
- building and industrial materials
- consumer products
- industrial products
- machinery components
- minerals
- electronic and electrical products
2. The GTP allows you to engage in the following types of physical trade:
- offshore trade
- trans-shipment trade
- re-export trade (only non-value added portion of trade are qualifying)
3. The GTP allows you to engage in principal trades, both buy as well as sell transactions, with offshore parties or other GTP companies.
2020 CHANGES: EXTENSION AND REFINEMENTS
1. To further strengthen Singapore's position as a global trading hub and to encourage more structured commodity financing (SCF) activities to be done in Singapore, the following changes will be made to the GTP:
2. Qualifying activities of the GTP (SCF) to be subsumed under the GTP with effect from 19 February 2020
3. GTP (SCF) to lapse after 31 March 2021
4. Concessionary tax rate of 5% on income from qualifying transactions in liquefied natural gas (LNG) to lapse after 31 March 2021
5. Existing recipients of 2. and 3. can continue to enjoy the respective tax concessions up until the expiry of their awards, if the conditions for approval of their awards continue to be met.
Source:
https://www.guidemesingapore.com/business-guides/industry-guides/trade-industry/guide-to-singapores-global-trader-scheme
https://home.kpmg/sg/en/home/campaigns/2020/02/moving-forward-to-a-stronger-tax-regime.html
