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Singapore-Australia Free Trade Agreement (SAFTA) - a business guide

Chapter 4:  Selling professional services in Singapore

The services sector dominates the Singapore economy.  Under SAFTA, Singapore is required to treat Australian services suppliers on the same terms as Singapore businesses (national treatment) and to remove quantitative and other market access restrictions on service suppliers.  All exceptions to these obligations must be listed (‘negative listing’ – see Annex I [pdf] for summary), or they are deemed to be liberalised.  As a result, SAFTA offers improved conditions of access for many Australian service suppliers, and provides more certainty in the operating environment.

SAFTA binds Singapore’s current and, in many cases, recently liberalised regulatory regime in a number of important services sectors.  Singapore is thereby committed not to introduce more restrictive measures in these areas without consultations with Australia, at least with respect to Australian services suppliers.

In addition, SAFTA secures improved visa conditions for Australian services providers and investors, for both short-and long-term stays.  Accompanying spouses and dependants of long-term business residents now have a guaranteed right to work in Singapore in a wide range of jobs.  These provisions of SAFTA are explained in more detail in Chapter 8 of this guide, ‘Working and living in Singapore’.

The most significant gains from SAFTA for Australian providers of specific services are in the financial and legal services sectors, along with positive outcomes for education, environmental services and professional services as follows.

Summary of gains for Australia’s services providers

Financial services

Singapore is committed to providing market access and national treatment across a range of financial services, including banking, insurance and capital markets.  In addition, financial services suppliers may transfer to or process information in Australia, including through electronic means.  Restrictions on the number of wholesale banking licences available to Australian banks will be removed from 1 January 2007.

While access to the Singapore financial services sector has improved through its commitments under the General Agreement on Trade and Services (GATS) and under SAFTA, some restrictions remain and apply to the establishment and operation of foreign banks, wholesale banks, offshore banks, merchant banks, finance companies, and Fund Management Companies (FMCs).  For example, foreign banks may only operate as Singapore branch offices of Singapore-incorporated companies, and finance companies and all insurance brokers may only do so as Singapore-incorporated companies.

Details of these restrictions or ‘negative listings’ are listed in Annexes 4-I (B) and 4-II (B) of SAFTA, and are summarised in Annex I of this guide. 

Telecommunications services

Singapore is a key player in global telcommunications.  It was one of the first countries in the world to have a fully digital telephone network.  The Singapore Government has, in recent years, sped up the liberalisation of its telecommunications sector.  All restrictions on direct and indirect foreign investment were eliminated in April 2000 to promote full competition. 

Although the dominant incumbent continues to play a major role in the provision of public basic telecommunication services, liberalisation has seen a number of new operators entering the market.  SingTel, majority-owned (over 60 per cent) by the Singapore Government through its investment holding company (Temasek Holdings), remains Singapore’s largest phone company.  The Singapore Government has recently committed to the privatisation of SingTel and ST Telemedia (another major government-linked telecommunications company), with the objectives of reducing its existing stakes in these companies to zero.

Following full-market liberalisation of the telecommunications sector in April 2000, more than 600 telecommunications licences have been awarded by the Infocomm Development Authority of Singapore (IDA), Singapore’s telecom regulator.  However, only around 5 per cent of the licences awarded (just over 30) are Facilities-Based Operators (FBOs – fixed line or mobile), and the remainder are Service-Based Operators (SBOs – local, international and callback). 

The liberalisation of the telecommunications sector in Singapore has also led to the entry of many new players offering Internet, paging, cellular, trunked radio, value-added network, satellite uplink/downlink for broadcasting purposes, VSAT and mobile data services.  There are a number of Internet service providers (ISPs), including SingTel (through SingNet), Pacific Internet, and Starhub.  There are three mobile phone operators – SingTel, M1 and Starhub. 

SAFTA establishes disciplines for telecoms regulation by both countries that expand significantly upon WTO commitments.  It provides greater transparency of decision-making, rights of appeal, effective enforcement by the regulator in Singapore, non-discriminatory pricing for interconnection and consultations with industry in development of standards and policy.

Under SAFTA, Singapore is obliged to allow Australian services suppliers access to any public telecommunications network or service, including lease circuits, and to ensure that major suppliers provide interconnection in a timely fashion. 

Major suppliers in the Singapore market are now obliged to provide to Australian FBOs access to unbundled network elements, physical co-location of equipment necessary for such access, and interconnection on terms that are non-discriminatory, in a timely fashion, and at cost-oriented rates.  It is to allow resale of its retail services by its competitors at reasonable rates where such services have been designated by the government or regulator.

Under SAFTA, Singapore is obliged to maintain appropriate measures to achieve connectivity between public telecommunications networks to ensure that end users can communicate with each other.  It is also to ensure that Australian FBOs may install, maintain, and have access to their equipment in buildings or on land in Singapore to enable them to provide public telecommunications services to end user customers.

SAFTA contains provisions on interconnection dispute settlement and the independence of regulators.  It requires telecommunications regulators in both countries to operate in a transparent manner and properly explain decisions in relation to the approval of commercial terms, conditions and standards, and the adjudication and resolution of disputes.  Australian suppliers who are likely to be affected by any proposed regulatory decisions in Singapore must be given a fair and reasonable opportunity to obtain sufficient information to enable them to develop informed views on these decisions and to provide these views to the regulator, IDA. 

Suppliers of public telecommunications networks or services are able to appeal to an independent authority if they are unhappy with a regulatory decision. 

SAFTA also commits Singapore (and Australia) to maintaining effective sanctions to enforce competitive safeguards and regulatory decisions, and to facilitate consultation with industry participants, including in the development of industry standards.

Main telecommunications outcomes for Australia of SAFTA

Singapore is to:

It should be noted that telecommunications equipment is included in the 2001 MRA on conformity assessment between Australia and Singapore.  This means Australian companies exporting telecommunications equipment to Singapore can arrange to have their products tested by accredited establishments in Australia and reduce the time delays and costs involved obtaining regulatory approvals in Singapore. 

More open and predictable telecommunications regulation MCT’s plan to be No. 2 in Singapore

The most important gain from SAFTA for Australian suppliers of telecommunications services is Singapore’s commitment to provide greater transparency of decision-making, rights of appeal and effective enforcement by Singapore’s telecom regulator, the Infocomm Development Authority (IDA).  In addition, major suppliers in a particular sector of the Singapore telecommunications market are required to provide other suppliers with interconnection on terms that are non-discriminatory, timely, and cost-oriented. 

Recognising the potential benefits of SAFTA, Macquarie Corporate Telecommunications (MCT) is one of several Australian companies which participated in the Australian Government’s consultations with business and industry on the SAFTA negotiations.  MCT, an Australian-owned, publicly listed company, manages the voice (fixed-line and mobile), data and e-business requirements for many large corporate and government clients in Australia and Singapore.  It also operates a nationwide data network and a data centre in Sydney which is Suntone, Microsoft and EMC2 certified.  MCT also has offices in Melbourne, Brisbane, Perth, Hobart, Adelaide and Townsville.

MCT was awarded a ‘Service Based Operator (SBO)’ licence to offer voice services in Singapore in October 2000.  This was subsequently expanded and now includes data services.  MCT provides international direct dial (IDD), voice, data and online services as well as data network solutions to corporate clients and, more recently, Singapore Government related agencies.  After almost three years of operation, MCT Singapore now has about 500 corporate clients, or 10 per cent of the top 5000 multinational corporations and government-linked companies, and is fast becoming the number two player in the corporate telecommunications sector after Singtel.

Now that SAFTA has entered into force, MCT is moving to expand its operations in Singapore, and is considering the option of becoming a ‘Facilities Based Operator’ (FBO).  With support of the Australian Department of Foreign Affairs and Trade and Austrade, MCT has been active in engaging relevant Singapore authorities, including IDA, the Economic Development Board of Singapore, and the Ministry of Trade and Industry, in its expansion plans.

SAFTA has improved the operating environment for Australian companies like MCT in the Singapore telecommunications market.  However, to be successful in this market, there is still a need for careful planning, extensive market research, obtaining the support of relevant Singapore authorities, and long-term commitment to the market. 

What many other Australian companies have said about the Singapore market in general applies equally well to the telecommunications sector.  As Maha Krishnapillai, MCT’s National Executive, notes: ‘to be successful here you need to be very patient and think long term’; ‘build your network and try to win the support of the local Ministries and Government agencies’.

(Source: Macquarie Corporate Telecommunications on the freecall number 1800 676 272)

Professional services

Under SAFTA, residency requirements for Australian professionals such as architects, engineers, accountants and auditors have been removed or eased.  To practise in Singapore, Australian professionals are still required to register with certain regulatory bodies, depending on professions and qualifications.  A list of some of the main professional bodies is provided at Annex II of this guide. 

Under SAFTA, Australia and Singapore will encourage their relevant professional bodies to enter into negotiations on mutual recognition of professional qualifications and/or registration procedures.  To date, the following Australian professional bodies have commenced negotiations of mutual recognition agreements (MRAs) with their counterparts: the Architects Accreditation Council of Australia (AACA); the Institution of Engineers, Australia; the Certified Practising Accountants (CPA) Australia; and the Council of Pharmacy Registering Authority.

Registration of Australian architects in Singapore made easier

Under the SAFTA framework, Australian architects are likely to be the first profession to arrive at a mutual recognition agreement (MRA) with Singapore.  The Architects Accreditation Council of Australia (AACA) and its Singapore counterpart, the Board of Architects (BOA), have already concluded negotiations on the text of the MRA on registration of architects.  AACA is looking forward to signing the agreement shortly.

AACA is the national organisation responsible for establishing, coordinating and advocating national standards for the registration of architects in Australia and for the recognition of Australian architects overseas by the relevant registration authorities.  BOA Singapore is the statutory authority established in Singapore to administer the Architects Act, which sets out the general qualifications and requirements for registration.  It is responsible for evaluation of applications to the Register of Architects.

Under the MRA between AACA and BOA, Australian architects with ten years of post-graduate experience will be able to register with BOA and practise in Singapore.  The MRA will remove barriers to trade in architectural services and simplify registration requirements for Australian architects working in Singapore.

Singapore recognises AACA-accredited architecture degrees from all Australian educational institutions.

The MRA extends reciprocal benefits to Singapore architects.

AACA can be contacted via PO Box 236, Civic Square ACT 2608; tel: (612) 6230 0506 and fax: (612) 6230 7879

Legal services

The Australian legal profession will benefit directly from SAFTA.

Under Singapore’s existing regulatory system, foreign law firms may set up offices in Singapore to advise clients only on the laws of their home country or international law.  Foreign law firms with a track record in financial work are allowed to enter into joint ventures or establish formal alliances with Singapore law firms.  In such cases, certified foreign lawyers participating in the joint venture may, on completion of prescribed courses on Singapore law, practise Singapore law with the exception of representation before judicial or regulatory bodies.

Under SAFTA, conditions on the establishment of joint ventures in Singapore involving Australian law firms have been eased. These conditions include requirements with respect to the number of foreign lawyers of the foreign law firm that must be resident in Singapore and how many years of experience those lawyers are required to have.  The easing of these requirements will allow Australian law firms to compete on a level playing field compared with the larger US and UK law firms.

The number of Australian universities whose law degrees are recognised in Singapore has increased from four to eight, thereby enhancing the attractiveness of Australian universities for Singaporean students.  These universities are the Australian National University, Flinders University of South Australia, Monash University, the University of Melbourne, the University of New South Wales, the University of Queensland, the University of Sydney, and the University of Western Australia. 

Singapore has also bound liberal conditions of access for Australian law firms and lawyers in relation to the practice of Australian law, third country law, and international law.

Medical professional services

While recognition of medical qualifications is not addressed specifically in SAFTA, it should be noted that Singapore recognises undergraduate medical degrees from ten Australian universities: Flinders University of South Australia, Monash University, the University of Adelaide, the University of Melbourne, the University of Newcastle, the University of New South Wales, the University of Queensland, the University of Sydney, the University of Tasmania, and the University of Western Australia.  It has also lifted restrictions on the ability of foreign-trained doctors to work in Singapore, enabling a wide range of Australian medical graduates and practitioners to work in Singapore.  While these outcomes are not part of SAFTA, they contribute to the strengthening of bilateral economic and trade links and, as such, complement the outcomes of SAFTA on professional services.

Education services

Education services represent a significant part of our services exports to Singapore, with 31,400 students undertaking courses at onshore and offshore courses with Australian educational institutions in 2003.  This makes Singapore Australia’s fourth-largest market.  Under SAFTA, Singapore has provided full national treatment and market access commitments for university, adult and vocational and technical education, with only limited exceptions.  Australian education providers can operate relatively freely in Singapore.  Singapore government scholarships for overseas use are also tenable at Australian universities.

SAFTA also provides a framework for both Governments to encourage cooperation between Australian and Singaporean educational institutions in a number of areas, including technical education, vocational training, distance education and teacher training. 

Case study – Emerging opportunities in education services

Singapore is already a major source country for Australia’s international student population.  Increased cooperation in education under SAFTA will lead to new opportunities for Australian education providers. 

Several Australian universities have been pursuing new opportunities in Singapore.  Among these are the Queensland University of Technology (QUT) and Griffith University in Queensland.  Both are looking to use the improved environment provided by SAFTA to pursue further opportunities in the Singapore market.

QUT has, since 2001, entered into an arrangement with the Singapore Police Force to offer a specialised program in international policing to Singapore Police Officers who have completed Advanced Diplomas in Police Studies from Singapore’s Temasek Polytechnic.  The program focuses, among other things, on Asian economic crime, global crime trends and the psychology of offending and investigating, and has special relevance to the understanding and prevention of crime in South-East Asia.  Upon the successful completion of this program, involving three semesters of part-time study, Singapore Police Officers will be awarded the QUT Bachelor of Justice (International Policing).  The arrangement has served to fill a gap in Justice or Police Studies programs available at degree level to the Singapore Police locally.

QUT is now looking to build upon SAFTA to expand its courses to cater for other government agencies in Singapore, and to include other areas of study, for example, knowledge-economy and related studies.  Building upon the success of the Bachelor of Justice (International Policing), QUT has introduced a Master of International Crime Management in 2004.  This program is available in Singapore only in the first instance, and has already attracted significant interest, including from graduates of the Bachelor of Justice program. 

Griffith University’s School of Aviation, in conjunction with the Aerospace Training Centre (ATC) in Singapore, will offer a suite of Aerospace Management programs in 2004.  These programs will be marketed specifically to those who work in the engineering sector of the Aerospace industry, although they may also appeal to non-engineering staff and airline employees.

Griffith University has been able to build on the improved environment provided by SAFTA to pursue further opportunities in the Singapore market. It is expected that SAFTA will also facilitate further cooperation between Griffith Aviation and business partners in Singapore.

(Source: The Queensland University of Technology (QUT), and Griffith University in Queensland)

Environmental and other services

The environmental services sector is open to Australian businesses apart from some restrictions in the areas of waste water and hazardous waste. Singapore has given full market access and national treatment commitments in a range of other sectors of interest to Australian exporters, such as construction, sporting services, computer and related services and auxiliary transport services.

Austrade identifies opportunities for Australian businesses

Environment sector

Sports sector

Construction sector

Hiring professional services from Singapore

SAFTA also makes it easier for Australians to buy services from Singapore.  Regulation of the Australian services sector is transparent and predictable by international standards, even before the entry into force of SAFTA.  However, SAFTA commits Australia to providing national treatment and market access to Singapore services suppliers.  The exceptions to this rule are listed in Annexes 4-I (A) and 4-II (A) of SAFTA.

By binding the existing open regime, SAFTA provides certainty of access at the federal level for Singapore services suppliers in number of sectors, for example, real estate services, distribution services, tourism services, energy services, and a range of professional services including legal, engineering, and architectural services.  The Australian states and territories will be making further commitments on trade in services and investment during the first review of SAFTA.

Table of contents - Singapore-Australia Free Trade Agreement (SAFTA) - a business guide