Using An Agent and Distributor

Many American exporters use agents or distributors to serve the Singapore market and other markets in Southeast Asia. Finding prospective partners presents no problem. Singapore firms are aggressive when it comes to representing new products and usually respond enthusiastically to new opportunities. Most American companies that use the U.S. Commercial Service (CS Singapore) matchmaking programs in Singapore find several interested agents or distributors. CS Singapore offers a wide range of business programs and has an excellent record of success in introducing U.S. firms to the market. A list of matchmaking programs offered by CS Singapore is on our website at www.buyusa.gov/singapore.

Establishing an Office

The Singapore Accounting & Corporate Regulatory Authority (ACRA) publishes an excellent guide that takes the first time registrant through the process of establishing an office.  General information on establishing a business in Singapore can be viewed at http://www.acra.gov.sg. The process takes about one day for a sole proprietorship, while more complex business entities can take up to six weeks and require lawyers and accountants to assist with incorporation documents.  One point to bear in mind is that registration 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

Franchising is popular. Singaporean firms are looking for new growth opportunities and are interested in investing in foreign franchise concepts. Franchisees usually buy franchise licenses for the Southeast Asian region and not for Singapore alone. Most franchisees finance their purchases of franchises through bank loans, personal savings or pooling resources from family members.

Direct Marketing

The direct marketing industry in Singapore began about 16 years ago and now includes direct mail, telemarketing, television sales, mail order, call centers, fulfillment and e-commerce firms. The Direct Marketing Association of Singapore represents users and service providers who are engaged in database marketing, call center activity, fulfillment and e-commerce. The direct marketing industry is well supported by service companies including Singapore Post, Singapore Telecom Call Center, Teledirect, TNT Internatinal Mail, Ogilvy One and MMS Consultancy, among many others. The Singapore government also actively supports the industry through its Direct Marketing Program by assisting companies (through financial incentives) use direct marketing for their trading activities.

Direct selling entails the sale of a consumer product or service in a face-to-face manner, away from a fixed retail location. In Singapore, the Direct Selling practices comes under The Multi-Level Marketing and Pyramid Selling (Prohibition) (Amendment) Act 2000, which came into operation on June 1, 2000. Details of the Act can be found at http://www.dsas.org.sg.

The Direct Selling Association of Singapore (DSAS), a self-regulatory body, was set up in 1976. 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 DSAS has adopted a Code of Conduct by which member-companies in the Association are to adhere to in every aspect of business. Through the Code of Conduct, DSAS 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

Most Singaporean companies are open to joint venture proposals, and many are interested in manufacturing under license.  The Commercial Service at the U.S. Embassy in Singapore is active in matching American and Singapore firms for joint ventures not only in Singapore but also for third country markets.

Selling to the Government

Singapore is a signatory to the WTO Agreement on Government Procurement. The U.S.-Singapore FTA provides increased access for U.S. firms to Singapore's central government procurement. U.S. firms generally find Singapore to be a receptive, open and lucrative market. The Singaporean government procurement system is considered by many American firms to be fair and transparent. However, some U.S. and local firms have expressed concerns that government -owned and government-linked companies (GLCs) may receive preferential treatment in the government procurement process. Singapore denies that it gives any preferences to GLCs or that GLCs give preference toother GLCs. Bidders must meet the specifications set out in the tender and offer a competitive price in order to be successful. Government procurement regulations are contained in Instruction Manual 3, available from the Ministry of Finance. The Singapore Government also advertises its tenders on their website at www.gebiz.gov.sg.

Distribution and Sales Channels

Singapore's distribution and sales channels are simple and direct. Because of Singapore's role as a regional 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.

Selling Factors and Techniques

Price, quality and service are the main selling factors in Singapore. Prospective exporters to Singapore should be aware that competition is strong and that buyers expect good after-sales service. Selling techniques vary according to the industry or, the product involved, but are comparable to the techniques used in any other sophisticated market.

Electronic Commerce

According to IDC, Singapore's ecommerce revenue is forecasted ot be US$43 million in 2008 and will reach US$67.9 million by 2012. The Singapore government was ranked first in Accenture's annual e-government survey in 2007. It is one of the first countries in the world to enact a law that addresses issues that arise in the context of electronic contracts and digital signatures. The Electronic Transactions Act (ETA) (Cap 88) was enacted to provide a legal foundation for electronic signatures, and to give predictability and certainty to contracts formed electronically. The Singapore ETA follows closely the UN Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce, which sets the framework for electronic laws in many countries.

The full text of the ETA can be found at the Singapore Statutes Online website (http://agcvldb4.agc.gov.sg/).

Trade Promotion and Advertising

There are many specialized trade magazines in Singapore and scores of trade fairs that can be used to promote U.S. goods and services.  The major English-language daily newspapers are the Straits Times and the Business Times.  They are available online at http://www.straitstimes.com and http://www.businesstimes.com.sg/.  The leading business magazine is Asian Business and Asia Inc. The major Chinese language daily is Lianhe Zaobao (http://www.zaobao.com).   E-commerce web sites can be found at http://www.ida.gov.sg and at http://www.sg.  Leads for local advertising and promotional service agencies can be found at http://www.yellowpages.com.sg.  Contact CS Singapore (Singapore.Office.Box@N0SPAM.mail.doc.gov ) for a list of specialized trade magazines and trade fairs.

Pricing

Pricing is very competitive.  Major department stores and retail chains offer fixed-price merchandise, while the smaller shops expect buyers to bargain.  Hard bargaining is common in the commercial and industrial sectors as well, where buyers usually want a discount and vendors inflate their initial offers accordingly.  Credit terms of 30-60-90 days are common.  Buyers will often retain 10% of the sales price for major electronic equipment purchases until the vendor has installed the machine, and it is performing according to specifications.

Typical Product Pricing Structures:
Depending on the type of product, importer mark-ups range from 20-40%, while retail mark-ups are often more than 100%.  Industrial goods are brought in by stocking distributors, who add on at least 20% before sale to end-users, or by agents whose commissions generally run about 7-10%.  These mark-ups are approximate, and will vary widely depending on the product and the contractual relationship in question.

Sales Service/Customer Support

Good sales and customer support are vital in Singapore. The market is so price competitive that good sales support or customer service can make a big difference. Singapore distributors respond well to training on new products, and if properly supported by the U.S. manufacturer will do a good job cultivating old customers and developing new ones.

Protecting Your Intellectual Property

Several general principles are important for effective management of intellectual property rights in Singapore.  First, it is important to have an overall strategy to protect IPR.  Second, IPR is protected differently in Singapore than in the United States.  Third, rights must be registered and enforced in Signapore, under local laws.  Companies may wish to seek advice from local attorneys or IP consultants.  the U.S. Commercial Service can often provide a list of local lawyers upon request.

It is vital that companies understand that intellectual property is primarily a private right and that the US government generally cannot enforce rights for private individuals in Singapore.  It is the responsibility of the rights' holders to register, protect, and enforce their rights where relevant, retaining their own counsel and advisors.  While the U.S. government is willing to assist, there is little it can do if the rights holders have not taken these fundamental steps necessary to securing and enforcing their IPR in a timely fashion.  Moreover, in many countries, rights holders who delay enforcing their rights have been eroded or abrogated due to doctrines such as statutes of limitations, laches, estoppel, or unreasonable delay in prosecuting a law suit.  In no instance should USG advice be seen as a substitute for the obligation of a rights holder to promptly pursue its case.

It is always advisable to conduct due diligence on partners.  Negotiate from the position of your partner and give your partner clear incentives to honor the contract.  A good partner is an important ally in protecting IP rights.  Keep an eye on your cost structure and reduce the margins (and the incentive) of would-be bad actors.  Projects and sales in Singapore require constant attention.  Work with legal counsel familiar with Singapore laws to create a solid contract that includes non-compete clauses, and confidentiality/non-disclosure provisions.

It is also recommended that small and medium-size companies understand the importance of working together with trade associations and organizations to support efforts to protect IPR and stop counterfeiting.  There are a number of these organizations, both Singapore or U.S.-based.  These include:

• The U.S. Chamber and local American Chambers of Commerce
• National Association of Manufacturers (NAM)
• International Intellectual Property Alliance (IIPA)
• International Trademark Association (INTA)
• The Coalition Against Counterfeiting and Piracy
• International Anti-Counterfeiting Coalition (IACC)
• Pharmaceutical Research and Manufacturers of America (PhRMA)
• Biotechnology Industry Organizations (BIO)
• Business Software Alliance (BSA)
• Motion Picture Association of America (MPAA)
• Cable & Satellite Broadcasting Association of Asia (CASBAA)
• Intellectual Property Office of Singapore (IPOS)
• U.S. Patent and TradeMarks Office (USPTO)
• The Recording Industry Association (Singapore) (RIAS)

IPR Resources

A wealth of informtion on protecting IPR is freely available to U.S. rights holders.  Some excellent resources for companies regarding intellectual property include the following:

• For information about patent, trademark, or copyright issues -- including enforcement issues in the United States and other countries -- call the STOP! Hotline: 1-866-999-HALT or register at http://www.StopFakes.gov

• For more information about registering trademarks and patents (both in the United States as well as in foreign countries), contact the U.S. Patent and Trademark Office (USPTO) at 1-800-786-9199.

• For more information about registering for copyright protection in the United States, contact the U.S. Copyright Office at: 1-202-707-5959.

• For U.S. small and medium-size companies, the Department of Commerce offers a "SME IPR Advisory Program" available through the American Bar Association that provides one hour of free IPR legal advice for companies with concerns in Brazil, China, Egypt, India, Russia, and Thailand.  For details and to register, visit:  http://www.abanet.org/intlaw/intlproj/iprprogram_consultation.html.

• For information on obtaining and enforcing intellectual property rights and market-specific IP Toolkits visit:  http://www.StopFakes.gov. This site is linked to the USPTO website for registering trademarks and patents (both in the United States and in foreign countries), the U.S. Customs & Border Protection website to record registered trademarks and copyrighted works (to assist customs in blocking imports of IPR-infringing products) and allows you to register for Webinars on protecting IPR.

The U.S. Commerce Department has positioned IP attaches in key markets around the world.  Ms. Jennie Ness is the IP Attache who covers ASEAN including Singapore and her contact email is jennie.ness@N0SPAM.mail.doc.gov .

IPR Climate in Singapore

The Intellectual Property Office of Singapore (IPOS) is the lead Singapore government agency that advises on and administers intellectual property (IP) laws, promotes IP awareness and provides the infrastructure to facilitate the development of IP in Singapore.  As IP regulator and policy advisor, IPOS is committed to maintaining a robust and pro-business IP regime for the protection and commercial exploitation of IP. Singapore has a fully Trade Related Aspects of Intellectual Property Rights (TRIPS)-compliant Intellectual Property Rights (IPR) legislative and administrative regime.

In line with its FTA commitments and obligations under international treaties and conventions, Singapore has developed one of the strongest IPR regimes in Asia.  Amendments to the Trademarks Act, the Patents Act, the Layout Designs of Integrated Circuits Act, Registered Designs Act, and a new Plant Varieties Protection Act, and a new Manufacture of Optical Discs Act came into Broadcasting Act became effective in January 2005; the Copyright Act was further amended in August 2005.

Singapore ahs implemented Article 1 through Article 6 of the World Intellectual Property Organization (WIPO) Joint Recommendation Concerning Provisions on the Protection of Well-Known Marksof 1999.  It has signed and ratified the International Convention for the Protection of New Varieties of Plants (1991); the Convention Relating to the Distribution of Program-Carrying Signals Transmitted by Satellite (1974); the WIPO Copyright Treaty (1996); and the WIPO Performances and Phonograms Treaty (1996).

Singapore is a signatory to other international IPR agreements, including the Paris Convention, the Berne Convention, the Patent Cooperation Treaty, the Madrid Protocol and the Budapest Treaty.  The WIPO Secretariate opened offices in Singapore in June 2005.  Amendments to the Trademark Act, which took effect in January 2007, fulfill Singapore's obligations in WIPO's revised Treaty on the Law of Trademarks.

In accordance with the FTA, Singapore's amended Copyright Act provides improved protection for digital works, and outlines requirements and procedures for removing infringing material from Internet sites. Despite the amendment, the copyright industry maintains that the new law fails to impose full liability on service providers engaged in infringing activity.  U.S. industry has raised concerns that Internet piracy in Singapore is on the rise as a result of the increasing availability of broadband facilities in Singapore.  Industry groups also claim that Section 107B of the Copyright Act violates FTA obligations by permitting entities in Singapore to "simulcast" performances over the Internet without paying the proper licenses.

In line with its FTA obligations, Singapore has taken steps to improve IPR enforcement and lower infringement rates, which are among the lowest in Asia Pacific region.  Singapore claims that its enforcement efforts have almost eliminated the production of pirated material and blatant storefront retail piracy.  According to industry estimates, Singapore's piracy rate averaged 5 o 10 percent for audio and video and 39 percent for business software. Rights holders have encountered difficulties when attempting to prosecute IP cases based on tips provided by company insiders.  Singapore currently does not offer specific protection to "whistleblowers." As a result, many informants refuse to provide crucial testimony in court.

While a number of local educational institutions (the majority government-operated) have signed agreements to comply with their legal obligations to pay royalty fees to publishers, unlawful duplication of textbooks at some commercial copy centers continues.  The police have conducted multiple raids, but, according to industry representatives, the practice is lucrative enough to continue in spite of the possibility of large fines.

Due Diligence

Anyone wanting to carry out a business in Singapore must register with the Accounting and Corporate Regulatory Authority (ACRA).  U.S. firms can run a check on Singapore companies by accessing the ACRA database via http://www.acra.gov.sg. Other credit agencies include CrimsonLogic Pte. Ltd. (http://www.biznet.com.sg), Yellow Pages Singapore Pte. Ltd. (http://www.yellowpages.com.sg), and Infocredit D&B (http://www.icdnb.com.sg). 

Local Professional Services

Legal Services:
U.S. and other foreign law firms are not allowed to practice law in Singapore. Legal matters involving Singapore law must be handled by a local attorney. Details on the structure of the Singapore legal service can be found in http://www.lsc.gov.sg

Accounting Services:
The Institute of Certified Public Accountants of Singapore http://www.icpas.org.sg is currently the only official accounting body in Singapore. The Institute is responsible for accounting standards in Singapore and follows closely the standards set by the International Accounting Standards Board.

Engineering Services:
Where a professional engineer, resident or foreign, desires to engage in professional engineering work in Singapore, he/she shall apply for a certificate authorizing him/her to engage in professional engineering work within the branch of engineering indicated in the register of professional engineers as a branch of engineering in which he/she is qualified to practice. Application should be made with the Professional Engineers Board, Singapore http://www.peb.gov.sg.

Architectural Services:
Architectural Services: Under the Architect Act, no person shall draw or prepare any architectural plan and design intended to govern the construction of any building in Singapore unless the person is a registered architect who has a valid practicing certificate issued by the Board of Architects (http://www.boa.gov.sg).