SINGAPORE (97.2 points) topped the league of 43 countries for Xinhua-Baltic International Shipping Centre Development (ISCD) Index as the world’s top maritime centre for the eighth year running. Singapore’s robust port infrastructure and its comprehensive range of maritime services and supportive government policies are key factors that help it to retain the top accolade. The second to fifth positions are taken by London (82.6 points), Shanghai, Hong Kong and Dubai, unchanged from prior year ranking.
Despite a significant drop in global trade and business disruptions in 2020 due to the pandemic, the Port of Singapore (PSA) has done well to support global seaborne trade during this pandemic. Singapore is the world’s busiest container trans-shipment and bunkering hub. Its vibrant and international maritime centre is built on a strong support core of shipping companies and a comprehensive range of maritime services from shipbroking, marine insurance, ship financing, maritime law to arbitration. The strong business friendly environment, efficient government services and progressive regulatory regime etc all help to contribute to its strong maritime performance. Its liberal shipping policy as well as the various tax incentives for shipowners/operators and shipping-related support service encourages both shipowners and operators to both register their ships and locate their shipping and marine-related business in Singapore.
Some of the maritime related tax incentives that offer full or partial tax exemption on qualifying income from prescribed activities are as follows:
1. Maritime Sector Incentive – Singapore Registry of Ships (“MSI – SRS”) Scheme
2. Maritime Sector Incentive – Approved International Shipping (“MSI – AIS”) Scheme
3. Maritime Sector Incentive – Maritime Leasing (“MSI – ML”) Scheme
4. Maritime Sector Incentive –Maritime Leasing (Container) (“MSI – ML (Container)”)
5. Maritime Sector Incentive – Supporting Shipping Services (“MSI – SSS”) Scheme
There are also qualifying withholding tax exemption for MSI companies, relieving companies the need for the submission of the self-declaration forms to obtain withholding tax exemption on qualifying payment eg charter payments. In addition, the Singapore GST regime allows zero-rating of supplies relating to ships that qualify as international services under s21(3) of the GST Act of which you may zero-rate your supply of service (i.e. charge GST at 0%).
With the top maritime centres around the world getting more competitive, Singapore must strive to remain attractive if not be the most attractive centre for maritime trade. To achieve that, Singapore has to be innovative and responsive to the new disruptive norm by continuing to build on its robust maritime ecosystem and business-friendly government policies that are progressive, transformative and ahead of time.