Setting Up a Travel Agency in SingaporeDownload Now: FREE GST 2023 GuidebookDownload Now: FREE Employment Pass ChecklistDownload Now: Free Incorporation Checklist
Setting up a travel agency in Singapore can be a good idea this year. With the recent opening of borders across international destinations, the tourism industry has been brought back to life, if not even bigger scale with the help of social media. If you wish to start a travel agency in Singapore, but aren't certain what steps to take, then you're not alone.
Starting a business can be overwhelming, particularly if you are unfamiliar with the process. However, the right information and tools will make it easier to begin your travel agency quicker than anticipated.
Being the most thriving business hub located in the heart of Southeast Asia, and it offers a wealth of opportunities for entrepreneurs looking to open a travel agency. With its modern infrastructure, vibrant culture, and sophisticated tourism industry, Singapore is an ideal destination for those seeking to establish a successful travel agency.
The first major advantage of opening a travel agency in Singapore is its strategic geographic location. Situated at the crossroads of East and Southeast Asia, this city-state has a population of 5.6 million people and covers an area of 710 square kilometers with bustling cities located at north, leisure or entertainment districts at south respectively. Its unique and vibrant culture has in turn attracted tourists from all around the world flock to the city for their world-class attractions, such as the Singapore Zoo and Universal Studios Singapore, and not to mention the state-of-art landmark Marina Bay Sands.
Singapore is a gateway to a wealth of destinations, from nearby Southeast Asian countries to further afield places like India and China. This makes it easy to organise tours and packages to a variety of destinations, giving travel agencies an advantage when it comes to meeting customer needs.
Moreover, Singapore is one of the most developed countries in the region, with a modern infrastructure that supports business operations. This includes a reliable transportation network, excellent telecommunications and internet access, and a comprehensive banking system. These features make it easy to operate a travel agency efficiently and effectively, and they also make it attractive for potential customers.
On top of that, the government is making it easier for entrepreneurs to start new businesses in Singapore by streamlining the licensing process and reducing red tape.
Travel Agency Licensing Requirements
In general, a person or business that intends to supply any person or tour a right to travel on any conveyance (land, sea or air) and/or a right of accommodation will be required to possess a Travel Agent (TA) license, under Section 4 of the Travel Agents Act (Cap. 334).
A travel agency license is required if you wish to conduct the following activities:
- Selling or arranging for travel services on behalf of a third party
- Selling air tickets, hotel accommodation and cruise bookings
- Providing information on travel destinations, fares and schedules
Certain exemptions only apply where any of the acts described above is carried out outside Singapore. For example, an overseas travel agent who arranges and sells a travel package outside of Singapore does not require a travel agent license, even if the travel package includes travel to or from Singapore.
Whether you are planning to open a one-stop solution travel agency or provide limited services, here are two types of license to consider in general.
- Requires an upfront capital of $50,000, plus a net worth of equal amount.
- Licensed to only sell or arrange tours with conveyance WITHIN Singapore, WITHOUT accommodation
- Upfront capital of $100,000, plus a net worth of equal amount
- Licensed to carry out ALL travel agent activities
Conditions for Obtaining a Travel Agency License
Singapore Tourism Board (STB) has created guidelines for setting up a travel agency in Singapore. They also provide information on how to qualify for the license and conduct other business activities in Singapore as a travel agent. Additionally, users can apply or renew their licenses using the digital-integrated Travel Agents and Tourist Guides Licensing System (TRUST) with ease. The following steps will guide you in securing your license application approval.
1. Registration of Business Entity
You are required to first register your business with the Accounting & Corporate Regulatory Authority (ACRA) for the purpose of conducting the business of a travel agent. The company must be set up under the Standard Industrial Classification (SSIC) codes of 78211 for Travel Agents And Tour Operators.
2. Paid-Up Capital and Net Value
For registered business entities (including dormant entities) applicants shall ensure that at anytime, the issued and paid-up capital in the business entity’s latest ACRA BizFile+ is not less than $100,000 for general travel agent licensees or $50,000 for niche travel agent licensees.
The same goes for sole-proprietors, partnerships or unincorporated association where applicants must submit a Credit Bureau Singapore report to verify their creditworthiness.
3. Key Executive
All applicants must nominate a suitable person for the position of a Key Executive (KE). The KE is the contact person between the Board and the travel agency. The KE is responsible for the proper administration and management of the affairs of the travel agency. To ensure clear lines of accountability and full commitment, the KE appointee should not be a concurrent KE of another licensed travel agency.
The appointment of the KE must be endorsed by more than half of the directors. The nominated KE of the business entity is subject to the Board’s approval:
- Must either be a Singaporean, Permanent Resident or a foreigner holding a valid work pass. A work pass must have a validity of at least 6 months at the time of application.
- Preferably be a Director of the entity equivalent with at least 1 year of managerial experience, in the proper administration and management of a travel agent business.
- For sole-proprietor or partnership, the Key Executive should either be the owner or partner.
4. Business Entity Internet E-mail Address
Applicants will have to apply for an e-mail address specifically for the operation of the travel agency business. All e-mail correspondence regarding the travel agent license application will be made via this e-mail address, including the notification of final approval for the Travel Agent’s License.
5. Management Staff and Personnel
All directors, executives and managerial staff of the entity must be persons suitable to be involved in the management or operation of the business of a travel agent, and must be of good moral and conduct.
6. Office Space and Signboard
The applicant’s premises to carry out the business of a travel agent is subject to the Board’s approval under the following conditions of having consent or permits for the conduct of travel agent; proofing of premise tenancy leasing ( for at least one year) or ownership ; obtaining approval under ‘Home Office Scheme’ from HDB or URA.
At times like this, it is often a smart idea to enlist the assistance of a local expert in Singapore finances, business best practices and accounting when it comes to the timely collation, submission and coordination of documentation such as this.
License Application Procedure
Applications for travel agency licenses are all submitted online. Any ownership interests in additional travel agencies must be disclosed.
Following the full and accurate submission of all supporting papers, the application processing period is between one and two weeks. An In-Principle Approval (IPA) letter will be mailed to you in response from the authorities. The clearance process might take longer if the authorities decide they need to do financial and criminal background checks on the potential employees of the new firm.
Before your Singapore travel agency license is officially approved, the IPA letter may include a list of requirements that you must meet. A common need is the filing of the tenancy agreement for the space where you wish to operate your travel agency. You should specify the term of the tenancy agreement of at least one-year. On the other hand, you are required to show proof of ownership if you happen to own the premise.
Upon completing the online application for a new license via Travel Agents and Tourist Guides Licensing System (TRUST), you are required to pay an application fee of SGD200 through e-payment. If your approval has been successful, you will be notified through email and prompted to make a payment of $400 for the license fee. STB by default will then mail the license to your registered office address upon successful payment confirmation. Besides, you may opt to collect the license in-person too, just remember to give STB a heads up for the arrangement.
License Validity and Renewal
The Singapore Travel Agency License is valid for two years. This can be extended by one year at a time. You may apply for renewal of your license at any point during the validity period.
If you have not applied for renewal by the expiry date of your current license, you will need to wait until it has expired before you can apply for a new one.
The application process for renewal is the same as that for an initial application. However, there are no additional fees associated with applying for renewal of your Singapore Travel Agency License.
The travel agency must have a good track record with no complaints lodged against it. A review of the business practices of your travel agency Singapore location will be fulfilled by the Ministry of Tourism and Trade at least once every three years.
Suspension or Revocation
For malpractice, dishonest business practices or other offenses, the travel agency home may well find itself facing up to 6 months suspension or full revocation of its operational license.
There are many reasons why this can happen. It may be because the leadership team is incapacitated due to illness, or it could be that the management of a travel agency Singapore has committed a crime or other immoral action. Similarly, a travel agency Singapore license can also be revoked if the functions of the business shift in such a way that, to all intents and purposes, the organization is no longer operating as a travel agency.
Despite the heavy penalties, the Board is obliged to notify the licensee beforehand and grant the licensee 14 days to offer up reasons why the agency should not be penalised. While serving suspension, you should not conduct any new business, except to fulfill obligations to supply a travel product that were undertaken right before the start of the suspension.
Operating a business in Singapore comes with tedious challenges but Sprout Asia can help. Our team of professionals has the expertise to guide you through all aspects of setting up a business in Singapore, from accounting and business law best practices to taxation advice and the facilitation of documents to get you up and running fast.