Car rental Business in Singapore
The Singapore automotive industry has started picking up from 2017. Investors of the automotive industry are now looking at car rental companies in Singapore
The following are the steps to be considered for starting the car rental business
Choosing a business form for a car rental company in Singapore
Irrespective of the nature of your business, it is necessary to decide on the business form as it can have a great impact on the liability and taxation of the business owner. The limited liability company is a preferred business form by local and foreign investors coming to Singapore, as it offers similar advantages and registration requirements.
the following steps must be completed:
- Choosing and reserving a trade name is the first step
- choosing a registered address for the company and finding suitable premises for the car fleet;
- having the company’s Articles of Association drafted, notarized and filed with ACRA for incorporation;
- registering for tax purposes with the Inland Revenue Authority in Singapore and obtaining a GST number;
- applying for the necessary operating licenses with the Land Transport Authority in Singapore.
In the case of foreign citizens offering the rental services, it is mandatory that the an international driver’s license is required and must be valid at the time the documents to be filed with the Land Transport Authority
Services offered by car rental companies in Singapore
Considering the competitiveness in the car rental industry, one must consider the type of cars for rent, as well as the services included in the offer. Among the services a Singapore car rental company can offer are:
- – daily rentals, which usually cover the needs of individuals;
- – long-term rentals, which are very sought by companies in Singapore;
- – various types of insurances;
- – towing services in case of accidents or other events.
Operating as a car rental company in Singapore
An entrepreneur who wants to open a Singapore company and offer car rental services through it has various options. After the company registration procedure is completed, the car rental business must register with the Land Transport Authority (LTA).
One of the advantages of setting up a car rental company in Singapore is that it can tailor its services to the request of its clients. Most Singapore citizens rent cars for everyday business trips, for going on vacations or for various special events. For some of these events the services will also mean hiring a driver.
Singapore car rental companies which also offer private hire driver must comply with a few requirements imposed by the LTA, among which:
- – the drivers must pass a medical exam;
- – the drivers must hold valid driver’s licenses class 3/3A/3C/3AC;
- – the drivers must have passed the private hire car driver’s vocational license course.
Responsibilities of car rental companies in Singapore
Under the local legislation, companies offering car rental services in Singapore have several responsibilities, among which the most important is related to verifying the persons the cars are rented to.
The following regulations must be respected by those hiring the services of a car rental company and by the Singapore car rental business:
- – only persons with the age of 21 are allowed to drive cars in Singapore (the company renting the car must verify that);
- – drivers with ages between 21 and 25 will be subject to a specific fee when renting cars in Singapore;
- – foreign citizens who want to rent cars in Singapore will need several documents when renting cars in Singapore;
- – if the driver’s license is not in English, an international driver’s permit or license and a notarized translation of it is required;
- – for citizens in ASEAN countries the driver’s license conditions are more relaxed in Singapore
Taxation of car rental companies in Singapore
The taxation of companies in Singapore, including car rental businesses, will occur the same way as for any other type of company, depending on the structure used. However, an important aspect to consider is that such companies can claim various deductions, according to the Singapore tax authority. Among these, the company can claim the deduction of all the expenses generated by the private hire of cars. Various capital allowances are also available when purchasing the cars for the fleet.
Singapore is one of the countries in which owning a vehicle is not among the preferences of residents, considering the public transportation system is quite developed and the services offered by car rental companies are affordable. Starting a car rental business in Singapore is quite advantageous from a taxation point of view.