Kegler Brown, in conjunction with the Ohio Development Services Agency (DSA), presented a breakfast briefing on March 25, 2014, on export and business opportunities in the emerging markets of Singapore and Indonesia. Vinita Bahri-Mehra presented "Exporting and Conducting Business in Singapore + Indonesia," with the research assistance of Katja Garvey. The presentation focused on the legal implications of doing business in Southeast Asia.

1. Exporting and Conducting Business
in Singapore + Indonesia
March 25, 2014presented by
Vinita Bahri-Mehra

2. z
+ Population: 5.31 million (in 2012)
+ Official languages: English (language of instruction), Mandarin, Malay and
Tamil
+ Unemployment rate: under 2%
+ Ranked in the top 3 in regards to investment potential, and foreign trade and
investments
+ Leading industries: manufacturing and services (incl. tourism)
+ U.S.-Singapore Free Trade Agreement (USSFTA) came into force January
1, 2004
+ Singapore's legal system is based on common law (influenced by UK)
+ Singapore is the 11th largest export market and 15th largest trading partner
of the U.S.
Overview: Singapore

3. z
+Global Investor Programme (GIP) provides assistance
for foreigners setting up and operating businesses in
Singapore
+EntrePass allows entrepreneurs to enter and stay while
beginning operations in Singapore
+Visa for Entry into Singapore (not required for US
citizens if stay is <90 days)
Access to Singapore

4. z
+All businesses (individuals, firms or corporations) that carry out
business for a foreign company, must be registered with the
Accounting & Corporate Regulatory Authority (ACRA)
+Investment proposals in areas (except the media and financial
sectors) are only screened to determine eligibility for extensive
incentive programs
+Once registered, there are several forms of enterprises in
Singapore:
+ Sole proprietorship, partnership, locally incorporated company, branch of
foreign company or representative office
+ Two local agents need to be appointed if you open a branch
+Overall, Singapore‘s legal framework is very friendly to foreign
investors.
Getting Started in Singapore

5. z
+A company incorporated in Singapore may pay dividends to
foreigners, who are not resident in Singapore.
+ Only subject to tax liabilities.
+Profits arising from the operations of a branch can be freely
remitted to the head office.
+ Only subject to tax liabilities.
+Free Trade Zones with facilities for the storage and re-export of
dutiable and controlled goods (both seaborne and airborne
cargo) and for services.
+M&A is governed by statutes/regulations (incl. Code on Takeovers
and Mergers, Listing Manuals, Companies Act, Securities and
Futures Act, Competition Act)
Doing Business in Singapore

6. z
+ Income derived in Singapore or received in Singapore but derived
overseas is subject to tax (territorial basis).
+ Corporate tax, remittance of foreign-sourced dividends, foreign-sourced
branch profits and foreign-sourced service income into Singapore are
exempt from tax if certain conditions are met.
+ Individual tax: exempt
+ Goods and Services Tax (GST): consumption tax levied on the import of
goods, in addition to nearly all supplies of goods and services in
Singapore.(Similar to VAT concept prevalent in EU)
+ Tax rates:
+ Corporate - 17% (applies equally to resident or non-resident companies)
+ No capital gains tax
+ Individual tax rate - 0 to 20%
Taxation

7. z
Exports to Singapore
+Obtain an IN Permit through TradeNet® before
importing goods into Singapore
+Pay the Custom duty and/or Goods and Services Tax
(GST) due at the prevailing rate at the time of
importation
+Leading imported goods:
+Aircraft, crude oil, petroleum, electronic components, radio and
television receivers, motor
vehicles, chemicals, food/beverages, iron/steel, textile
yarns/fabrics

8. z
Finding Suitable Premises
+Singapore often functions as a gateway for companies to set
up trading offices or logistics and distribution centers to
enter the Southeast Asian region
+Singapore offers a wide variety of locations
+ Stack-up factories with loading and unloading bays
+ Wet labs or research facilities
+ Specialized industrial parks
+Industrial Estates in Singapore are modern, well-developed
and offer fully-serviced sites for the establishment of
industries.

9. z
Recruiting of the Right Staff
+Skilled workforce
+High productivity
+Positive work attitude
+Proficient English skills
+Strategic Attachment and Training (STRAT) Programme

10. z
Incentive Programs for Businesses
+ Development and Expansion Incentive (DEI)
+ International / Regional Headquarters Award (IHQ / RHQ)
+ Pioneer Incentive
+ Land Intensification Allowance (LIA)
+ Integrated Investment Allowance (IIA)
+ Mergers & Acquisitions (M&A) Scheme
+ Finance & Treasury Centre (FTC) Tax Incentive
+ Aircraft Leasing Scheme (ALS)
+ Research Incentive Scheme for Companies (RISC)
+ Initiatives in New Technology (INTECH)
+ Land Productivity Grant (LPG)

11. z
+Population: 246.9 million (in 2012)
+Official languages: Indonesian (Bahasa), English (is widely used
and taught in most secondary schools)
+Unemployment rate: 6.25%
+Leading industries: Services, Energy, Manufacturing.
+IP protection: Party to the Berne Convention, the Paris
Convention, the Convention Establishing the World Intellectual
Property Organization, the WIPO Copyrights Treaty, the Patent
Cooperation Treaty, and the World Trade Organization (“WTO”)
Agreement including the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPs).
+Free Trade Zones
Indonesia - Introduction to
Indonesia

12. z
Registering a Business
+Environmental License is a mandatory requisite for a
Business License (Law No. 32 Year 2009)
+Prior to investing in an Indonesian company, a foreign
investor must apply for a registration approval from the
Investment Coordinating Board (“BKPM”), and inform
the BKPM of the nature of the intended investment.
+Certain reporting obligations
+“Negative List” which lists the areas that are not open
to FDI

13. z
(Tax) Incentive Programs for
Businesses
+Certain eligible investments (available for 5 to 10
years)
+Regional Tax Incentives for Foreign Investors (depend
on the business field and region)
+Special incentives for companies conducting business
in an Integrated Economic Development Zone (KAPET)
or Bonded-Zone (KB status)

14. z
Taxation in Indonesia
+Anti tax-avoidance regulations:
+ Regulation on thin capitalization
+ Deemed dividends
+ Controlled foreign corporation
+ Anti tax treaty abuse
+ Standard salaries for expatriates
+A resident taxpayer’s worldwide income is subject to
Indonesian tax (territorial basis).
+Fiscal losses can be used as deduction against future
taxable income (up to 5 years).

15. z
Export to Indonesia
+ Member of GATT and ASEAN Free Trade Agreement
+ Especially Japan and ASEAN members like Malaysia, Philippines,Thailand,Vietnam, but
also important GATT members like the U.S.
+ Advantages of being a member of GATT or ASEAN: among the countries who are part of
ASEAN and GATT, custom duties and tariffs on exporting products are
eliminated/reduced
+ Importers need an Importer Identification Number and Custom Identification
Number
+ Import duties are calculated on the basis of the Harmonized System Code
+ Manufacturing requirements:
+ Local content in products (certain percentage) – especially in electronic devices
+ Product labeling- Strict Requirements.
+ For example, cell phone products have to be equipped with an Indonesian manual

16. z
Thank You!
Vinita Bahri-Mehra
vmehra@keglerbrown.com
614.255.5508
Katja Garvey
kgarvey@keglerbrown.com
614.462.5490