SAFTA business guide

Foreword

Australia and Singapore have a strong and productive bilateral relationship, based on long-standing political, economic, defence and Commonwealth links. Singapore is Australia’s largest trade and investment partner in South-East Asia. We also have a shared belief that more open trade will lead to economic prosperity and bring more transparency to the business framework. Reflecting this, Australia and Singapore concluded the Singapore-Australia Free Trade Agreement (SAFTA) last year.

SAFTA entered into force on 28 July 2003. It builds on the strong and expanding bilateral economic partnership between our two countries. It was Australia’s first bilateral free trade agreement since the Closer Economic Relations Trade Agreement with New Zealand came into force in 1983.

As outlined in this Business Guide to SAFTA, the Agreement presents new trade and investment opportunities for businesses in both Australia and Singapore. It also provides a more open and predictable business environment across a range of areas, including telecommunications regulation, competition policy, government procurement, technical standards, intellectual property, e-commerce, customs procedures and business travel. The scope for commercial cooperation, including in third‑country markets in South-East Asia, has never been better now that our two economies are becoming increasingly integrated through SAFTA.

The Government has sought to make it easier for Australian businesses to export to and invest in Singapore, and beyond. I encourage you to take advantage of the new trade and investment opportunities presented by SAFTA. The Singapore-Australia Free Trade Agreement: A Business Guide will help you understand what SAFTA is, and how it has improved conditions of access to the Singapore market for many Australian businesses.

To ensure its continued relevance for business, SAFTA will be reviewed within a year after its entry into force and every two years subsequently. Through this process, SAFTA will remain a comprehensive ‘living document’ that can be added to and updated as bilateral trade and investment evolves over time. I urge you, therefore, to provide your views on the implementation and outcomes of SAFTA to the Department of Foreign Affairs and Trade before the first review which is expected to take place in late July or early August 2004.

I wish you every success in doing business with Singapore.

MARK VAILE

Chapter 1: What is SAFTA?

The Australian Government recognises that bilateral free trade agreements (FTAs) can deliver market access gains to Australian industry and exporters faster than multilateral negotiations through the World Trade Organization (WTO). Prime Minister Howard, together with his Singapore counterpart, Prime Minister Goh Chok Tong, announced jointly at the APEC Leaders’ Meeting in November 2000 that Australia and Singapore would negotiate a bilateral free trade agreement. Ten full rounds of negotiations were held between April 2001 and October 2002.

The Singapore–Australia Free Trade Agreement or SAFTA was signed by the Australian Minister for Trade, Mr Mark Vaile, and Singapore Minister for Trade and Industry, BG George Yeo, in Singapore on 17 February 2003, and entered into force on 28 July 2003 following an exchange of diplomatic notes.

SAFTA is Australia’s first bilateral free trade agreement since the 1983 Closer Economic Relations Trade Agreement with New Zealand. It is a comprehensive agreement that is fully consistent with WTO rules. It secures for Australia outcomes that go deeper and further than the WTO in relation to trade in services, intellectual property, investment, and competition policy.

Key outcomes of SAFTA for Australia

SAFTA offers greater opportunities in the goods and services sectors to a wide range of Australian exporters, and further strengthens trade and investment links between Australia and Singapore.

SAFTA eliminates remaining Singapore tariffs and provides cheaper inputs for Australian businesses on a range of products. It guarantees liberal conditions of access for many service suppliers. Australian legal, financial and educational service exporters, for example, will benefit from outcomes on services that are more advanced than those in the WTO.

SAFTA also provides a more open and predictable business environment across a range of areas, including telecommunications regulation, competition policy, government procurement, technical standards, intellectual property, e-commerce, customs procedures and business travel.

Summary of key outcome of SAFTA for Australia

Chapter 2: Why Singapore?

Singapore is an important hub for the South-East Asian region. It has a dynamic economy, with strong service and manufacturing sectors. Notwithstanding its small population (4.2 million), Singapore has one of the most developed economies in Asia (GDP per capita estimated at A$32,646 in 2003). 

Singapore was ranked the best place to do business in the Asia Pacific region and was ranked seventh globally by the Economist Intelligence Unit in July 2003. It has excellent infrastructure, including an airport and seaport that are among the best in the world, an extensive road network and subway system, state-of-the-art telecommunications facilities and reliable public utilities.

Singapore is our largest trade and investment partner in ASEAN and our eighth- largest trading partner overall. In 2003, Australian merchandise exports to Singapore were A$3.5 billion (our eighth-largest export market) and our imports from Singapore were valued at A$4.5 billion (eighth-largest source). Major Australian exports were petroleum (crude and refined), non-monetary gold, meat, milk and cream, aircraft and parts, and food and live animals. Major imports from Singapore were refined petroleum, computers and parts, musical instruments, and integrated circuits.

Services are also a key part of our exports. In 2003, Australian exports of services to Singapore were A$2.1 billion, making Singapore our fifth-largest services export market. Education was a major component of this, with over 31,400 Singapore students enrolled in both onshore and offshore Australian educational institutions in 2003. Singapore is also our largest tourist market in Asia after Japan, with over 226,000 Singapore visitors to Australia during the year ended 30 June 2003. Two-way investment is also significant, with the level of Australian investment in Singapore recorded at around A$10.0 billion, and total Singaporean investment in Australia at over A$33.5 billion (as at 30 June 2003).

Australia and Singapore have similar views on a range of economic issues. Both are strong supporters of multilateral trade liberalisation through the World Trade Organization. Both are also looking to develop new economic links with countries within and outside the Asia Pacific region.

Apart from strong economic and trade relations, Singapore and Australia have maintained effective links in the areas of foreign relations, defence, tourism, education, police and immigration. There is significant cooperation in narcotics control, disarmament and arms control, counter-terrorism, law enforcement, information and communications technology and aviation.

Australian companies’ comments on Singapore

‘Due to its perfect infrastructure, we use Singapore as a regional base to cover other Asian markets and thus achieve better economies of scale for our office here.’

‘Don’t treat Singapore as an extension of Australia.’

‘To be successful here you need to be very patient and think long term.’

‘My advice would be to set up alliances with local companies to better access the market.’

‘Build your network and try to win the support of the local Ministries and Government agencies.’

‘It takes a lot of effort to keep up the contacts—we have consistently followed up for the past 12 months.’

Source: Austrade Singapore

Chapter 3: Selling goods to Singapore (and buying goods originating from Singapore)

Singapore is a free port. However, prior to the entry into force of SAFTA, it levied import duies on a limited number of Australian products, namely beer, ale, stout and porter. The entry into force of SAFTA results in the elimination of all tariffs on goods originating in Australia and Singapore. 

Selling to Singapore

All Australian products, including beer and stout, may now enter Singapore tariff-free. Other Singapore Government taxes and charges, if relevant, are still payable. 

For Australian beer and stout to enter Singapore duty-free, they must meet the rules of origin set out in Article 3, Chapter 3 of SAFTA [PDF]. It follows that for each shipment, the goods must be accompanied by a valid Certificate of Origin and a declaration by either the exporter or manufacturer stating that the products are the produce or manufacture of Australia. The Australian exporter and manufacturer can apply for a Certificate of Origin, valid for a period of two years from the date of issue, from the Australian Chamber of Commerce and Industry (ACCI) or the Australian Industry Group (AIG). ACCI contacts are listed in Appendix 13 to Australian Customs Manual Volume 12, Export Control [PDF]. To contact AIG, please phone the AIG Trade and Development Officer on (03) 9867 0152. Declarations are made by the exporter and many appear on the invoice for the goods or in a separate document.

Importers in Singapore are also required to produce both the Certificate of Origin and the exporter’s declaration at the time of entry of the products. Further details of documentation requirements can be found in the Australian Customs Notice No. 2003/59 [PDF].

0% tariff on beer and stout

Little Creatures to sell to Singapore

The elimination of all tariffs under SAFTA is an important win for Australian exporters of beer and stout. Australian products can now enter Singapore duty free, while imports from most other countries still attract import duties, at S$1.70 per liter for stout and porter, and S$ 0.80 per liter for beer and ale.

Little Creatures, a micro-brewery in Western Australia, welcomed this news. Following its extraordinary success in the Australian market after only three years of production, it is now looking to export. As an export market, Singapore holds many attractions, and the zero rate of import duty granted to Australian beer and ale under SAFTA makes Singapore even more attractive to Little Creatures.

Little Creatures produces two types of beer, Pale Ale and Rogers. Using whole hop flowers, the brewing is hop-driven through an infusion device similar to a tea bag. Little Creatures won Australia’s Best Craft Beer at the Australian Liquor Industry Awards in 2003 and Best Boutique Beer in 2002.

(Source: Little Creatures Brewing, 40 Mews Road, Fremantle, WA 6160, tel: (618) 9430 5155, fax: (618) 9430 5640)

The main government taxes and charges that are still payable on Australian goods imported into Singapore are excise duties and goods and services tax (GST). Singapore imposes these taxes and charges on all other imports as well as on its own locally produced goods. Excise duties are charged on four categories of products: alcohol, tobacco, petroleum products and motor vehicles. Singapore levies a flat 5 per cent GST on most goods and services. The only exceptions are financial services or the sale or lease of residential properties.

Buying from Singapore

Similarly, Singapore products may be imported into Australia duty-free. However, excise-equivalent duties, goods and services tax (GST), dumping duties and other taxes and levies, if relevant, are still payable. 

For Singapore products to be qualified for duty-free entry into Australia, they must meet the rules of origin as set out in Article 3, Chapter 3 of SAFTA [PDF], and these are summarised below. 

Similar to the requirements for duty-free entry into Singapore of Australian products, Singapore exporters or manufacturers must produce a valid Certificate of Origin and a declaration stating that the products are the produce or manufacture of Singapore before they are exported. Importers in Australia must be able to produce both the

Certificate of Origin and the exporter’s declaration at the time of entry of the products into Australia. For more information on import entry requirements, please refer to the Australian Customs Notice No. 2003/49 [PDF].

Rules of origin

For products from Australia or Singapore to be eligible for duty-free access into the other market, they must be:

The minimum level of local content for most goods is 50 per cent. However, a 30 per cent level of local content applies to a limited number of electrical and electronic items and products subject to Tariff Concession Orders (not made in Australia). Goods subject to the 30 per cent local content threshold are listed in Annex 2 D of SAFTA, and Attachment A of the Australian Customs Notice No. 2003/49.

The accumulation provisions of SAFTA apply to all goods other than a range of textiles, clothing and footwear, passenger motor vehicle items and jewellery. Goods to which accumulation provisions do not apply are listed in Annex 2 C of SAFTA, and Attachment B of the Australian Customs Notice No. 2003/49.

Accumulation effectively allows all production costs incurred in Australia or Singapore to be taken into account when calculating local content, even where the manufacturing process is interrupted by offshore processing, provided that the control of the material in question does not change before and/or after offshore processing. 

For queries on rules of origin as well as other import entry requirements, please contact the Manager Origin, Trade Branch, Australian Customs Service, at origin@customs.gov.au or (02) 6275 6551.

Customs requirements made easier

To achieve the paperless trading objective, Australia’s and Singapore’s respective Customs administrations are working towards having electronic means for all customs reporting requirements available by 2005. When implemented, this will help reduce ‘red tape’ and thereby business costs.

Reducing technical barriers to trade

A significant proportion of Australia’s merchandise trade with Singapore is subject to regulation. Traded goods subject to mandatory technical regulations in the country of import often need to be tested and/or certified for compliance with those requirements by a body located in that country. For example, previously electrical and electronic equipment manufactured in Australia could not be sold in Singapore unless the Standards Productivity and Innovation Board (SPRING Singapore) and/or the Singapore Public Utilities Board approved it for sale. The cost of obtaining a test report and certificate of approval for a new product line added to the costs of exporting, of imported inputs to production, and thus increased prices paid by consumers in Australia.

To help reduce costs to Australian manufacturers and exporters and remove barriers to the movement of goods between Australia and Singapore, the Australian Government has been encouraging the Singapore Government to recognise Australia’s standards and conformity assessment procedures. To this end, Australia and Singapore signed a mutual recognition agreement (MRA) on conformity assessment in February 2001. 

The MRA on conformity assessment provides for mutual recognition of the results of conformity assessment activities, initially in three sectors: medicinal products (good manufacturing practice), electrical and electronic equipment, and telecommunications equipment. This enables assessment of these products and/or manufacturers to be performed in Australia prior to export, to ensure that they conform to standards and legal requirements in Singapore, and thereby reduce the risks, time delays and costs associated with obtaining regulatory approvals in Singapore. 

SAFTA builds on the MRA on conformity assessment and provides a framework for determining equivalence of Australian and Singapore standards and requirements. It also commits Australia and Singapore to working towards harmonisation of their mandatory requirements consistent with international standards and guidelines. 

Negotiations on sectoral annexes to SAFTA covering horticultural products and food standards have been concluded. These annexes are expected to enter into force during the first half of 2004. When they come into effect, the annexes will provide for streamlined compliance and inspection arrangements for approved products. For example, the sectoral annex on horticultural goods will result in Singapore accepting Australia’s phytosanitary certificates, treatment certificates and/or test reports. This is important to many Australian exporters because Singapore is a major market for Australian meat and other food products. On the other hand, it will be easier to import orchids and foliage from Singapore as they will no longer be subject to mandatory fumigation requirements upon entry into Australia, provided that no actionable pests are detected. For more information, please contact the Australian Quarantine and Inspection Service (AQIS).

The sectoral annex on food standards will require Singapore to accept Australia’s food standards as determined by the Food Standards Australia New Zealand (FSANZ). In addition, AQIS and the Agri-Food and Veterinary Authority of Singapore are to negotiate conformity assessment arrangements for food products which will lead to mutual recognition of conformity assessment certificates.

Chapter 4: Selling professional services in Singapore

The services sector dominates the Singapore economy. Under SAFTA, Singapore is required to treat Australian services suppliers on the same terms as Singapore businesses (national treatment) and to remove quantitative and other market access restrictions on service suppliers. All exceptions to these obligations must be listed (‘negative listing’ – see Annex I [pdf] for summary), or they are deemed to be liberalised. As a result, SAFTA offers improved conditions of access for many Australian service suppliers, and provides more certainty in the operating environment.

SAFTA binds Singapore’s current and, in many cases, recently liberalised regulatory regime in a number of important services sectors. Singapore is thereby committed not to introduce more restrictive measures in these areas without consultations with Australia, at least with respect to Australian services suppliers.

In addition, SAFTA secures improved visa conditions for Australian services providers and investors, for both short-and long-term stays. Accompanying spouses and dependants of long-term business residents now have a guaranteed right to work in Singapore in a wide range of jobs. These provisions of SAFTA are explained in more detail in Chapter 8 of this guide, ‘Working and living in Singapore’.

The most significant gains from SAFTA for Australian providers of specific services are in the financial and legal services sectors, along with positive outcomes for education, environmental services and professional services as follows.

Summary of gains for Australia’s services providers

Financial services

Singapore is committed to providing market access and national treatment across a range of financial services, including banking, insurance and capital markets. In addition, financial services suppliers may transfer to or process information in Australia, including through electronic means. Restrictions on the number of wholesale banking licences available to Australian banks will be removed from 1 January 2007.

While access to the Singapore financial services sector has improved through its commitments under the General Agreement on Trade and Services (GATS) and under SAFTA, some restrictions remain and apply to the establishment and operation of foreign banks, wholesale banks, offshore banks, merchant banks, finance companies, and Fund Management Companies (FMCs). For example, foreign banks may only operate as Singapore branch offices of Singapore-incorporated companies, and finance companies and all insurance brokers may only do so as Singapore-incorporated companies.

Details of these restrictions or ‘negative listings’ are listed in Annexes 4-I (B) and 4-II (B) of SAFTA, and are summarised in Annex I of this guide. 

Telecommunications services

Singapore is a key player in global telcommunications. It was one of the first countries in the world to have a fully digital telephone network. The Singapore Government has, in recent years, sped up the liberalisation of its telecommunications sector. All restrictions on direct and indirect foreign investment were eliminated in April 2000 to promote full competition. 

Although the dominant incumbent continues to play a major role in the provision of public basic telecommunication services, liberalisation has seen a number of new operators entering the market. SingTel, majority-owned (over 60 per cent) by the Singapore Government through its investment holding company (Temasek Holdings), remains Singapore’s largest phone company. The Singapore Government has recently committed to the privatisation of SingTel and ST Telemedia (another major government-linked telecommunications company), with the objectives of reducing its existing stakes in these companies to zero.

Following full-market liberalisation of the telecommunications sector in April 2000, more than 600 telecommunications licences have been awarded by the Infocomm Development Authority of Singapore (IDA), Singapore’s telecom regulator. However, only around 5 per cent of the licences awarded (just over 30) are Facilities-Based Operators (FBOs – fixed line or mobile), and the remainder are Service-Based Operators (SBOs – local, international and callback). 

The liberalisation of the telecommunications sector in Singapore has also led to the entry of many new players offering Internet, paging, cellular, trunked radio, value-added network, satellite uplink/downlink for broadcasting purposes, VSAT and mobile data services. There are a number of Internet service providers (ISPs), including SingTel (through SingNet), Pacific Internet, and Starhub. There are three mobile phone operators – SingTel, M1 and Starhub. 

SAFTA establishes disciplines for telecoms regulation by both countries that expand significantly upon WTO commitments. It provides greater transparency of decision-making, rights of appeal, effective enforcement by the regulator in Singapore, non-discriminatory pricing for interconnection and consultations with industry in development of standards and policy.

Under SAFTA, Singapore is obliged to allow Australian services suppliers access to any public telecommunications network or service, including lease circuits, and to ensure that major suppliers provide interconnection in a timely fashion. 

Major suppliers in the Singapore market are now obliged to provide to Australian FBOs access to unbundled network elements, physical co-location of equipment necessary for such access, and interconnection on terms that are non-discriminatory, in a timely fashion, and at cost-oriented rates. It is to allow resale of its retail services by its competitors at reasonable rates where such services have been designated by the government or regulator.

Under SAFTA, Singapore is obliged to maintain appropriate measures to achieve connectivity between public telecommunications networks to ensure that end users can communicate with each other. It is also to ensure that Australian FBOs may install, maintain, and have access to their equipment in buildings or on land in Singapore to enable them to provide public telecommunications services to end user customers.

SAFTA contains provisions on interconnection dispute settlement and the independence of regulators. It requires telecommunications regulators in both countries to operate in a transparent manner and properly explain decisions in relation to the approval of commercial terms, conditions and standards, and the adjudication and resolution of disputes. Australian suppliers who are likely to be affected by any proposed regulatory decisions in Singapore must be given a fair and reasonable opportunity to obtain sufficient information to enable them to develop informed views on these decisions and to provide these views to the regulator, IDA. 

Suppliers of public telecommunications networks or services are able to appeal to an independent authority if they are unhappy with a regulatory decision. 

SAFTA also commits Singapore (and Australia) to maintaining effective sanctions to enforce competitive safeguards and regulatory decisions, and to facilitate consultation with industry participants, including in the development of industry standards.

Main telecommunications outcomes for Australia of SAFTA

Singapore is to:

It should be noted that telecommunications equipment is included in the 2001 MRA on conformity assessment between Australia and Singapore. This means Australian companies exporting telecommunications equipment to Singapore can arrange to have their products tested by accredited establishments in Australia and reduce the time delays and costs involved obtaining regulatory approvals in Singapore. 

More open and predictable telecommunications regulation MCT’s plan to be No. 2 in Singapore

The most important gain from SAFTA for Australian suppliers of telecommunications services is Singapore’s commitment to provide greater transparency of decision-making, rights of appeal and effective enforcement by Singapore’s telecom regulator, the Infocomm Development Authority (IDA). In addition, major suppliers in a particular sector of the Singapore telecommunications market are required to provide other suppliers with interconnection on terms that are non-discriminatory, timely, and cost-oriented. 

Recognising the potential benefits of SAFTA, Macquarie Corporate Telecommunications (MCT) is one of several Australian companies which participated in the Australian Government’s consultations with business and industry on the SAFTA negotiations. MCT, an Australian-owned, publicly listed company, manages the voice (fixed-line and mobile), data and e-business requirements for many large corporate and government clients in Australia and Singapore. It also operates a nationwide data network and a data centre in Sydney which is Suntone, Microsoft and EMC2 certified. MCT also has offices in Melbourne, Brisbane, Perth, Hobart, Adelaide and Townsville.

MCT was awarded a ‘Service Based Operator (SBO)’ licence to offer voice services in Singapore in October 2000. This was subsequently expanded and now includes data services. MCT provides international direct dial (IDD), voice, data and online services as well as data network solutions to corporate clients and, more recently, Singapore Government related agencies. After almost three years of operation, MCT Singapore now has about 500 corporate clients, or 10 per cent of the top 5000 multinational corporations and government-linked companies, and is fast becoming the number two player in the corporate telecommunications sector after Singtel.

Now that SAFTA has entered into force, MCT is moving to expand its operations in Singapore, and is considering the option of becoming a ‘Facilities Based Operator’ (FBO). With support of the Australian Department of Foreign Affairs and Trade and Austrade, MCT has been active in engaging relevant Singapore authorities, including IDA, the Economic Development Board of Singapore, and the Ministry of Trade and Industry, in its expansion plans.

SAFTA has improved the operating environment for Australian companies like MCT in the Singapore telecommunications market. However, to be successful in this market, there is still a need for careful planning, extensive market research, obtaining the support of relevant Singapore authorities, and long-term commitment to the market. 

What many other Australian companies have said about the Singapore market in general applies equally well to the telecommunications sector. As Maha Krishnapillai, MCT’s National Executive, notes: ‘to be successful here you need to be very patient and think long term’; ‘build your network and try to win the support of the local Ministries and Government agencies’.

(Source: Macquarie Corporate Telecommunications on the freecall number 1800 676 272)

Professional services

Under SAFTA, residency requirements for Australian professionals such as architects, engineers, accountants and auditors have been removed or eased. To practise in Singapore, Australian professionals are still required to register with certain regulatory bodies, depending on professions and qualifications. A list of some of the main professional bodies is provided at Annex II of this guide. 

Under SAFTA, Australia and Singapore will encourage their relevant professional bodies to enter into negotiations on mutual recognition of professional qualifications and/or registration procedures. To date, the following Australian professional bodies have commenced negotiations of mutual recognition agreements (MRAs) with their counterparts: the Architects Accreditation Council of Australia (AACA); the Institution of Engineers, Australia; the Certified Practising Accountants (CPA) Australia; and the Council of Pharmacy Registering Authority.

Registration of Australian architects in Singapore made easier

Under the SAFTA framework, Australian architects are likely to be the first profession to arrive at a mutual recognition agreement (MRA) with Singapore. The Architects Accreditation Council of Australia (AACA) and its Singapore counterpart, the Board of Architects (BOA), have already concluded negotiations on the text of the MRA on registration of architects. AACA is looking forward to signing the agreement shortly.

AACA is the national organisation responsible for establishing, coordinating and advocating national standards for the registration of architects in Australia and for the recognition of Australian architects overseas by the relevant registration authorities. BOA Singapore is the statutory authority established in Singapore to administer the Architects Act, which sets out the general qualifications and requirements for registration. It is responsible for evaluation of applications to the Register of Architects.

Under the MRA between AACA and BOA, Australian architects with ten years of post-graduate experience will be able to register with BOA and practise in Singapore. The MRA will remove barriers to trade in architectural services and simplify registration requirements for Australian architects working in Singapore.

Singapore recognises AACA-accredited architecture degrees from all Australian educational institutions.

The MRA extends reciprocal benefits to Singapore architects.

AACA can be contacted via PO Box 236, Civic Square ACT 2608; tel: (612) 6230 0506 and fax: (612) 6230 7879

Legal services

The Australian legal profession will benefit directly from SAFTA.

Under Singapore’s existing regulatory system, foreign law firms may set up offices in Singapore to advise clients only on the laws of their home country or international law. Foreign law firms with a track record in financial work are allowed to enter into joint ventures or establish formal alliances with Singapore law firms. In such cases, certified foreign lawyers participating in the joint venture may, on completion of prescribed courses on Singapore law, practise Singapore law with the exception of representation before judicial or regulatory bodies.

Under SAFTA, conditions on the establishment of joint ventures in Singapore involving Australian law firms have been eased. These conditions include requirements with respect to the number of foreign lawyers of the foreign law firm that must be resident in Singapore and how many years of experience those lawyers are required to have. The easing of these requirements will allow Australian law firms to compete on a level playing field compared with the larger US and UK law firms.

The number of Australian universities whose law degrees are recognised in Singapore has increased from four to eight, thereby enhancing the attractiveness of Australian universities for Singaporean students. These universities are the Australian National University, Flinders University of South Australia, Monash University, the University of Melbourne, the University of New South Wales, the University of Queensland, the University of Sydney, and the University of Western Australia. 

Singapore has also bound liberal conditions of access for Australian law firms and lawyers in relation to the practice of Australian law, third country law, and international law.

Medical professional services

While recognition of medical qualifications is not addressed specifically in SAFTA, it should be noted that Singapore recognises undergraduate medical degrees from ten Australian universities: Flinders University of South Australia, Monash University, the University of Adelaide, the University of Melbourne, the University of Newcastle, the University of New South Wales, the University of Queensland, the University of Sydney, the University of Tasmania, and the University of Western Australia. It has also lifted restrictions on the ability of foreign-trained doctors to work in Singapore, enabling a wide range of Australian medical graduates and practitioners to work in Singapore. While these outcomes are not part of SAFTA, they contribute to the strengthening of bilateral economic and trade links and, as such, complement the outcomes of SAFTA on professional services.

Education services

Education services represent a significant part of our services exports to Singapore, with 31,400 students undertaking courses at onshore and offshore courses with Australian educational institutions in 2003. This makes Singapore Australia’s fourth-largest market. Under SAFTA, Singapore has provided full national treatment and market access commitments for university, adult and vocational and technical education, with only limited exceptions. Australian education providers can operate relatively freely in Singapore. Singapore government scholarships for overseas use are also tenable at Australian universities.

SAFTA also provides a framework for both Governments to encourage cooperation between Australian and Singaporean educational institutions in a number of areas, including technical education, vocational training, distance education and teacher training. 

Case study – Emerging opportunities in education services

Singapore is already a major source country for Australia’s international student population. Increased cooperation in education under SAFTA will lead to new opportunities for Australian education providers. 

Several Australian universities have been pursuing new opportunities in Singapore. Among these are the Queensland University of Technology (QUT) and Griffith University in Queensland. Both are looking to use the improved environment provided by SAFTA to pursue further opportunities in the Singapore market.

QUT has, since 2001, entered into an arrangement with the Singapore Police Force to offer a specialised program in international policing to Singapore Police Officers who have completed Advanced Diplomas in Police Studies from Singapore’s Temasek Polytechnic. The program focuses, among other things, on Asian economic crime, global crime trends and the psychology of offending and investigating, and has special relevance to the understanding and prevention of crime in South-East Asia. Upon the successful completion of this program, involving three semesters of part-time study, Singapore Police Officers will be awarded the QUT Bachelor of Justice (International Policing). The arrangement has served to fill a gap in Justice or Police Studies programs available at degree level to the Singapore Police locally.

QUT is now looking to build upon SAFTA to expand its courses to cater for other government agencies in Singapore, and to include other areas of study, for example, knowledge-economy and related studies. Building upon the success of the Bachelor of Justice (International Policing), QUT has introduced a Master of International Crime Management in 2004. This program is available in Singapore only in the first instance, and has already attracted significant interest, including from graduates of the Bachelor of Justice program. 

Griffith University’s School of Aviation, in conjunction with the Aerospace Training Centre (ATC) in Singapore, will offer a suite of Aerospace Management programs in 2004. These programs will be marketed specifically to those who work in the engineering sector of the Aerospace industry, although they may also appeal to non-engineering staff and airline employees.

Griffith University has been able to build on the improved environment provided by SAFTA to pursue further opportunities in the Singapore market. It is expected that SAFTA will also facilitate further cooperation between Griffith Aviation and business partners in Singapore.

(Source: The Queensland University of Technology (QUT), and Griffith University in Queensland)

Environmental and other services

The environmental services sector is open to Australian businesses apart from some restrictions in the areas of waste water and hazardous waste. Singapore has given full market access and national treatment commitments in a range of other sectors of interest to Australian exporters, such as construction, sporting services, computer and related services and auxiliary transport services.

Austrade identifies opportunities for Australian businesses

Environment sector

Sports sector

Construction sector

Hiring professional services from Singapore

SAFTA also makes it easier for Australians to buy services from Singapore. Regulation of the Australian services sector is transparent and predictable by international standards, even before the entry into force of SAFTA. However, SAFTA commits Australia to providing national treatment and market access to Singapore services suppliers. The exceptions to this rule are listed in Annexes 4-I (A) and 4-II (A) of SAFTA.

By binding the existing open regime, SAFTA provides certainty of access at the federal level for Singapore services suppliers in number of sectors, for example, real estate services, distribution services, tourism services, energy services, and a range of professional services including legal, engineering, and architectural services. The Australian states and territories will be making further commitments on trade in services and investment during the first review of SAFTA.

Chapter 5: Bidding for Singapore Government contracts (government procurement)

SAFTA ensures that Australian firms will have more secure access to Singapore’s government procurement market. Although Australia is not a party to the WTO Agreement on Government Procurement (GPA), Singapore will match for Australia its commitments under GPA, guaranteeing non-discriminatory national treatment for Australian firms in tendering for government business with 47 Singapore ministries, agencies and statutory authorities, listed below. SAFTA guarantees this access without the limits on thresholds and product coverage that are included in GPA.

Under SAFTA, Singapore is also committed to providing opportunities for government procurement to be undertaken through electronic means, or e-procurement. Intellectual property and confidential information supplied in tender processes will be protected.

There are three different types of government tender: open, selective or limited. Tender notices are posted on the Internet at the Government Electronic Business (GeBIZ) website. GeBIZ also contains information on tender bids and tender awards.

Singapore ministries, agencies and statutory authorities bound by SAFTA provisions

  • Agency for Science, Technology and Research
  • Attorney-General’s Office
  • Auditor-General’s Office
  • Board of Architects
  • Building and Construction Authority
  • Cabinet Office      Civil Aviation Authority of Singapore
  • Economic Development Board
  • Housing and Development Board       Info–communications Development Authority of Singapore   Inland Revenue Authority of Singapore     International Enterprise Singapore
  • Istana
  • Judicature   Jurong Town Corporation
  • Land Transport Authority of Singapore
  • Maritime and Port Authority of Singapore
  • Ministry of Community Development and Sports
  • Ministry of Defence
  • Ministry of Education  Ministry of Environment
  • Ministry of Finance     Ministry of Foreign Affairs
  • Ministry of Health
  • Ministry of Home Affairs
  • Ministry of Information, Communications and the Arts
  • Ministry of Law
  • Ministry of Manpower
  • Ministry of National Development     Ministry of Trade and Industry
  • Ministry of Transport
  • Monetary Authority of Singapore
  • Nanyang Technological University    National Parks Board
  • National University of Singapore
  • Parliament     Presidential Councils
  • Prime Minister’s Office    Preservation of Monuments Board
  • Professional Engineers Board   Public Transport Council
  • Public Service Commission
  • Sentosa Development Corporation
  • Singapore Broadcasting Authority
  • Singapore Tourism BoardStandards, Productivity and Innovation Board
  • Urban Redevelopment Authority

SAFTA opens new opportunities for SMEs

Diversifying Intilligence Pty Ltd

SAFTA creates a more liberal, transparent and predictable environment for Australian small and medium enterprises (SMEs) wishing to export goods and services to Singapore. This makes it easier for them to do business in, and with, Singapore. SAFTA also provides new opportunities for Australian SMEs to sell their services to both business consumers and the Singapore Government. It guarantees non-discriminatory national treatment in tendering for Singapore Government business with 47 Singapore ministries, agencies and statutory authorities. In addition, Singapore is committed to providing opportunities for government procurement to be undertaken through electronic means, or e-procurement. 

Intilligence Pty Ltd (Intilligence) is one of many Australian SMEs which are looking to diversify into the Singapore market. It is a supplier of ‘point-of-sale’ products and software, based in Maroochydore, Queensland. It also provides ‘smartcard’ solutions to business. It has developed smartcard applications for use in public transport ticketing. These can be enhanced for non-transit use, for example by school students for purchases of school lunches, and loyalty schemes. Its Healthy Rewards Cashless School concept, involving the use of canteen smart-cards to encourage healthy eating habits among young students, was launched in Brisbane in 2002.

The launch has led to Intilligence’s involvement with the ERG Group, a Perth-based company with a reputation as a world leader in the development and supply of the smartcard-based automated fare collection (AFC) system, and in turn this has led to Intilligence’s exposure to the Singapore market. The ERG Group has signed up Intilligence to integrate its canteen smartcard application with ERG’s AFC system in Sydney. Before proceeding to set up this world-first integration in Sydney in early 2004, Intilligence has decided to conduct a pilot project to test its software in Singapore.

Singapore is the chosen site for Intilligence’s pilot project becauseSingapore has already adopted ERG’s multimodal smartcard-based AFC system with more than 5 million cards in circulation and 24,000 smartcard readers installed across the six transit operations covering bus, light rail and heavy rail. In addition, Singapore’s proximity to Australia and its position as a regional hub means that it could be the springboard to many other Asian countries. 

In July 2003, Intilligence installed its integrated system at the Australian International School in Singapore and put in touch-screen point of sale terminals. It will implement its next stages of application in 2004.

Should Intilligence decide to diversify its business to the Singapore market, it will be entering the market at a time when conditions of entry have been eased significantly by SAFTA. In addition, it is expected that the dynamic effects of SAFTA will help promote strategic alliances of Australian and Singapore firms and enhance government-to-government cooperation in the area of SME development. Intilligence should benefit from these effects, especially if it plans to expand into third country markets in the region.

(Source: Intilligence, 7/11 Newspaper Place, Maroochydore Queensland 4558, tel: (07) 5479 1511, fax: (07) 5479 6340, e-mail: info@intilligence.com.au)

Table of contents - Singapore-Australia Free Trade Agreement (SAFTA) - a business guide

Chapter 6: Investment

Foreign investment has traditionally been welcomed in Singapore and has accounted for a significant share of total investment in the economy. Reflecting the important contribution of foreign investment to the development of the economy, in most sectors there are no restrictions on inward foreign investment. The only formal restrictions on foreign investment are found in broadcasting, the domestic news media, retail banking, legal and other professional services, multi-level marketing, and property ownership. In addition, under Singapore law, corporate Articles of Incorporation may include shareholding limits that restrict ownership by foreign persons. Some, but not many, companies include such shareholding restrictions.

Foreign investors are not required to enter into joint ventures or cede management control to local interests, and local and foreign investors are subject to the same basic laws. Apart from regulatory requirements in some sectors (financial and telecom services), the Singapore Government examines investment proposals only to determine eligibility for various incentive regimes. 

The Singapore Government offers a wide range of tax and non-tax incentives to companies and individuals choosing to invest in Singapore. Investment incentives are provided mainly by the Economic Development Board (EDB), and include corporate tax holidays; concessional tax rates; exemption of taxable income of specified proportions on new fixed investment; and a concessional tax rate for operational headquarters on income arising from approved services. Singapore’s tax rates for corporations, for example, are set at a maximum of 22 per cent. The Monetary Authority of Singapore (MAS) also offers concessionary tax incentives for financial institutions looking to set up operations in Singapore.

See guide to Singapore’s tax system.

Singapore places no restrictions on reinvestment or repatriation of earnings or capital. 

Under SAFTA, Australian investors and investments are treated on the same terms as Singapore businesses (national treatment), including in relation to the establishment, acquisition, expansion, management, conduct, operation, liquidation, sale, transfer and expropriation of investments. The exceptions to this rule (‘negative listing’) are listed in Annexes 4-I (A) and 4-II (A) of SAFTA, and are summarised in Annex I of this guide. 

SAFTA contains strong investor protection provisions in relation to expropriation and the right to receive fair market value for property in the event of an expropriation. Australian investors have the right to challenge any measures by Singapore which violate SAFTA investment rules. SAFTA provides a more certain environment for Australian investors, and puts them on a level playing field with local competitors. 

SAFTA also offers greater transparency in relation to investment restrictions in Singapore’s government-linked companies. For example, individual investors are subject to equity ownership limits in the following enterprises:

Chapter 7: Working and living in Singapore

There are more than 6000 international companies in Singapore. These range from small to medium enterprises (SMEs) to large multinational corporations (MNC) and engage in a broad spectrum of activities – R&D activities, chemicals and electronics manufacturing, engineering, biomedical sciences, trade and hospitality services.

If you want to engage in any business, profession, or any form of paid employment in Singapore and you are not a Singapore permanent resident, you will need to get an appropriate immigration and employment pass. There are passes for short stays in Singapore for job interviews and business negotiations (social visit passes); passes for employment, short-term work and training; and passes for spouses and dependants.

Under SAFTA, Australian business people and professionals can now stay in Singapore to negotiate the sale of goods or services, establish an investment, or fulfil a short-term contract for their company for an initial period of up to three months, compared with one month previously. Long-term business residents working for Australian companies in Singapore are granted an initial period of two years, extendable on application up to at least 14 years.

Accompanying spouses and dependants of long-term business residents now have a guaranteed right to work in Singapore in job categories defined as managers, specialists and office administrators.

Business services registration

To register a business or establish a locally incorporated company in Singapore, you will need to appoint a local manager who is a Singapore citizen, Singapore permanent resident or Singapore Employment Pass holder. Only a service supplier who is a Singapore citizen, Singapore permanent resident or Singapore Employment Pass holder is allowed to register a business without appointing a local manager. In addition, a locally incorporated company must have at least one director who is a Singapore resident, and branches of foreign companies registered in Singapore must have at least two agents resident in Singapore.

Chapter 8: Anti-competitive practices and intellectual property rights

Competition policy

SAFTA includes important outcomes on competition policy, which encourage strengthening and development of the competition regime in Singapore, and allows Australia to address specific anti-competitive business practices. Both the Australian and Singapore Governments commit themselves to consult with each other upon request in relation to anti-competitive practices of particular concern. They also undertake to ensure that government-owned businesses will be subject to competitive neutrality disciplines, meaning that both countries will take reasonable measures to ensure that governments at all levels do not provide any competitive advantage to government-owned businesses simply because they are government-owned. This will help improve conditions for Australian companies seeking to enter and expand in the Singapore market in circumstances where a number of the incumbents are government-linked corporations with a dominant market position.

Singapore has only recently commenced the process of developing a general competition regime. However, it has specific competition regulations governing the telecommunications, finance and power sectors. The competition policy provisions of SAFTA will be reviewed to consider extending them when Singapore enacts a generic competition law.

Intellectual property

As well as confirming their WTO commitments on intellectual property protection, Australia and Singapore agree to cooperate on eliminating trade in goods infringing intellectual property rights, including by exchanging information. They also agree to take measures to prevent the export of goods that infringe copyright or trademarks on receipt of information or complaints.

As part of SAFTA, Australian and Singapore have also committed to protecting intellectual property and confidential information supplied in government procurement tender processes.

Chapter 9: Electronic commerce

Under SAFTA, Australia and Singapore agree to continue to not impose customs duties on electronic transmissions between the two countries. They undertake to make publicly available electronic versions of all existing publicly available trade administration documents by 2005, and to cooperate to enhance the acceptance of paperless trading bilaterally and internationally.

To promote confidence and trust in bilateral e-commerce, each government will maintain e-commerce consumer protection and electronic authentication legislation; work towards the mutual recognition of electronic signatures and encourage the interoperability of digital certificates by business.

Key outcomes on E- commerce

Chapter 10: Problem resolution and reviews

Dispute settlement

SAFTA provides a dispute resolution mechanism that is intended to support the overall functioning of the agreement, on the basis of efficiency, simplicity, timeliness and fairness.  The focus is on resolution of disputes through consultation.  However, where consultations fail, Australia or Singapore may request the appointment of an arbitral tribunal, which will determine whether a measure of one party is inconsistent with a SAFTA provision and, if so, recommend that the relevant party bring the measure into conformity with that provision.  The arbitral tribunal’s recommendations must be implemented within a reasonable period  as agreed between the two countries.  Non-compliance may result in compensatory adjustments and suspension of benefits.

In relation to state–state dispute settlement, it should be noted that governments, and not individuals, lodge dispute claims, and that this is done as a last resort when full efforts to resolve the disputes informally have been exhausted.  Moreover, some aspects of SAFTA explicitly limit the scope as well as the timing for use of dispute settlement provisions to address, for example, a refusal to grant temporary entry or concerns relating to domestic legal frameworks governing electronic transactions, authentication and signatures.

SAFTA also provides a mechanism to resolve disputes between a party and an investor of the other party (investor-state disuputes), under the chapter on investment.  An investor of one party may seek to settle disputes with the other party where the investor believes that the party is not complying with its obligations under the investment chapter of SAFTA.  The focus of these dispute settlement provisions of SAFTA is on resolving disputes through consultation and negotiation.  If resolution does not occur within six months, either Singapore or Australia may refer the dispute to one of the following three forums: the courts or administrative tribunals of the disputing party; the International Centre for Settlement of Investment Disputes (ICSID) for conciliation or arbitration; or arbitration under the rules of the United Nations Commission on International Trade Law (UNCITRAL). 

If you have any problems in doing business with Singapore, you should contact us in the first instance.  The Department of Foreign Affairs and Trade, through the Australian High Commission in Singapore, can assist with opening the door for Australian companies to Singapore government bodies and decision-makers.  In addition to the two main contact points provided below, the department has offices located in all Australian capital cities. Their contact numbers are listed at Annex V.

In Central Office in Canberra:

Executive Officer (Singapore)
Philippines, Malaysia, Singapore, Brunei Section
Maritime South-East Asia Branch
The Australian Department of Foreign Affairs and Trade
RG Casey Building
John McEwen Crescent
Barton  ACT  0221
Tel:  (02) 6261 1111
Fax: (02) 6261 1743

In Singapore:

Deputy High Commissioner
Australian High Commission
PO Box 470, Tanglin
Singapore  912416
Tel: (65) 6836 4224
Fax: (65) 6733 7134

Reviews

SAFTA includes a review provision.  The first review is expected to take place in mid-2004.  Subsequent reviews will be held biennially.

The first review will consider the implementation and outcome of SAFTA to date, and explore where there may be scope for enhancing the agreement.  It will also examine ways to incorporate additional benefits from the US–Singapore Free Trade Agreement (USSFTA) into the body of SAFTA.  These benefits relate to improved conditions for legal joint ventures and wholesale bank licences.

Annex I - summary of Singapore’s reservations in relation to services trade and investment

Following is a summary of Singapore’s reservations to trade in services and investment. A full list can be found in Annexes 4-I (B) and 4-II (B)of SAFTA

Auditing Services

Architectural Services

Annex II - list of professional regulatory bodies

Accountancy

Public Accountants Board (PAB)

Institute of Certified Public Accountants of Singapore (ICPAS)

Architecture

Board of Architects (BOA)

Engineers

Professional Engineers Board (PEB)

Land Surveying

Land Surveyors Board (LSB)

Board of Legal Education (BLE)

Medicine

Singapore Medical Council (SMC)

Nursing

Singapore Nursing Board

Registrar

Singapore Pharmacy Board

Dentistry

National Dental Centre

Annex IV - who to contact for more information

In Australia

Department of Foreign Affairs and Trade (DFAT) Canberra

Australian Trade Commission (Austrade)

Australian Customs Service

Australian Chamber of Commerce and Industry (ACCI)

Australian Industry Group (AIG)

In Singapore

The Australian High Commission

Australian Chamber of Commerce, Singapore (AustCham)

Singapore Ministry of Trade and Industry