Free Trade Zone (FTZ) usage and customs — Costs and fees breakdown
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
A Free Trade Zone (FTZ) in Singapore is a designated area, established under the Free Trade Zones Act 1966, where imported goods can be stored, repackaged and re-exported without incurring customs duty or Goods and Services Tax until they enter the domestic market. For trading, logistics and re-export businesses, using an FTZ defers duties, simplifies transhipment and speeds cross-border movement through Singapore’s ports and Changi Airport.
What a Free Trade Zone is
Singapore operates several FTZs covering its seaports and the airport cargo complex. The Free Trade Zones Act 1966 empowers designated FTZ authorities to administer these zones, where goods are treated as outside customs territory for duty and GST purposes until released for local consumption. This is central to Singapore’s role as a transhipment and entrepot hub. See the official guidance at www.customs.gov.sg.
Who benefits from FTZ usage
Re-exporters, transhipment operators, freight forwarders, and companies holding goods in transit gain the most. If your business imports to re-export, the FTZ mechanism avoids tying up cash in duty and GST that would only be refunded later. Manufacturers using imported inputs for export production also benefit.
Eligibility, duty and GST treatment
There is no award to win; FTZ facilities are accessed commercially through FTZ operators and licensed warehouses. Duty and GST are suspended while goods remain in the zone. GST applies only when goods are removed into Singapore for local sale, under the Goods and Services Tax Act 1993. Dutiable goods such as liquor, tobacco and motor vehicles remain subject to strict controls even within the zone.
Costs, fees and timeline
Company incorporation runs S$750 to S$1,800 in professional fees plus the S$315 ACRA fee. Customs registration to obtain a Unique Entity Number activation for import and export is free through Singapore Customs, and takes 1 to 2 working days. FTZ warehousing and handling charges are commercial and vary widely, commonly S$15 to S$40 per pallet per month plus handling. TradeNet permit fees are around S$2.88 per permit plus a service charge. Setting up a compliant import/export operation typically takes 2 to 6 weeks including licensing.
Step-by-step process
Incorporate the company and register with Singapore Customs to activate the entity for trade. Appoint a declaring agent or subscribe to TradeNet. Engage an FTZ warehouse operator. Apply for any product-specific permits or licences. Lodge inward and outward permits for each movement. Maintain records; Customs audits FTZ movements and expects a full audit trail.
Common mistakes and gotchas
Businesses forget that removing goods from the FTZ into Singapore triggers GST and, for dutiable goods, duty. Others mis-declare tariff codes, risking penalties. Poor inventory reconciliation between physical stock and permit records is the most common cause of Customs findings.
Related guides across the Raffles group
- Section 13O vs 13U: Comparing Singapore’s Two Family Office Tax Incentive Schemes (2026) on Singapore Secretary Services.
- EntrePass Singapore 2026: A Founder’s Complete Guide to the Entrepreneur Pass on Little Big Employment Agency.
- Free Trade Zone (FTZ) usage and customs — Step-by-step walkthrough.
Official references
FAQs
Do I pay GST on goods stored in an FTZ?
No. GST and duty are suspended while goods remain in the zone. They become payable only when goods are released into Singapore for local consumption.
Is an FTZ the same as a bonded warehouse?
They are related but distinct. FTZs are geographic zones outside customs territory; licensed warehouses are approved premises where duty and GST are suspended under Customs supervision.
Can any company use an FTZ?
Yes, once registered with Singapore Customs for trade and working through an FTZ operator or declaring agent.
Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.