Singapore based service companies to benefit from upgrades to the China – Singapore Free Trade Agreement (CSFTA)

The CSFTA was originally signed in October 2008 and came into effect on 1 January 2009. The FTA allowed all goods originating from China to be exempt from tax when exported to Singapore. Singapore-China Free Trade Presently, 95% of Singapore exports to China are duty free. However, investors and enterprises are keen on further liberation, especially in sectors like ecommerce, environment, business services, education and healthcare.

With the evolving business and economic landscape, the review is rightly timed. New sectors have emerged and the cross-border engagements have magnified. The profile of investors and their requirements have changed. In order to ensure the relevance of the FTA and also to substantiate its significance in improving trade and investments, it is essential to relook and revamp the FTA.

复习重点

The focus of the original CSFTA was highly skewed towards liberalisation of trade in goods, with the area of investments and services trade receiving less attention. The upcoming review is expected to principally address the limitations of the FTA in these two areas.

The review and upgrade of the CSFTA will be completed by the end of 2016. The review will focus on the following three key aspects that will benefit Singapore companies:

• Protection for Singapore investments in China
• Eliminating barriers for investment in China
• Improving Singapore firms’ access to China’s service sector

对新加坡的好处

Singapore’s service sector is very strong and commands world-class standards and quality. An improved gateway to China’s growing service sector will primarily benefit Singapore companies venturing into China, so that they may capitalise on China’s strategic measures to modernise the sector. Singaporean companies operating in education, health care, environmental, legal and accounting sectors, will be the prime beneficiaries of the upgrade. Singapore service companies that are largely constrained by the size of the domestic market will find growth opportunities in the rapidly urbanising China.

新加坡是一个重要的离岸袁交易中心，实际上是香港后第二大离岸枢纽。随着最近在国际货币基金组织的特别绘制权（SDR）篮子中纳入中国货币篮下，双横向合作在袁贸易渠道的扩建，基于元的投资和交易将在新加坡的未来几年升级。在不断发展的情景中，升级的CSFTA将作为双横向贸易和投资的催化剂。专注于中国市场的金融和投资公司可以为客户提供人民币计价的产品，从而从升级的CSFTA中获益。更重要的是，这些发展将提出更多中国公司寻找区域扩张，通过建立新加坡子公司来利用新加坡作为跳板。减少的交易成本可能会绘制更多的国际公司与中国交易，以便有效地管理其金融交易的新加坡子公司。

China does not permit 100% foreign shareholding, so Singapore investors and enterprises expanding into China must currently find local partners for Joint Venture opportunities. The upgraded CSFTA is expected to incorporate articles that adequately liberalise and protect Singapore investments in China. With the increased protection for Singapore investors under the CSFTA, international companies looking to invest in China will be able to set-up Singapore holding companies and route their investments through Singapore.

升级的CSFTA将补充新加坡作为区域商业中心，国际金融中心，作为元交易的重要海上枢纽，从而将新加坡的意义弹起来，在中国的“一条路一带”计划中。新加坡将成为中国受投资者和企业的震中，以及中国投资者和寻求区域机会的企业。新加坡老龄化人口及其对环境和医疗保健部门的越来越关注为中国投资者和企业家提供潜在的投资理由。

Welcoming the review Ms. Jacqueline Low, the COO of Hawksford Singapore, says, “It reflects China’s commitment to economic reforms. Liberalisation of the access to the service sector will benefit Singapore service companies. The consumption led growth model will attract more international companies to leverage the FTA to venture into China via Singapore. The trade engagement between both countries has spiked in the recent years, while Singapore is the largest ASEAN trading partner for China and China is the largest trading partner for Singapore. But as a service economy Singapore will positively gain with the potential upgrades to CSFTA. It will elevate Singapore’s role as a preferred domicile for global companies interested in Chinese markets and vice versa.”