With its business-friendly environment and policies, Singapore draws global businesses like few other countries. One of the most important steps to setting up a business in Singapore is to pick the right SSIC code at the time of incorporating your company. This article walks you through the process of choosing an SSIC code for your business, what this code stands for and why you need it.
Short for Singapore Standard Industrial Classification code, an SSIC code is a numeric code of up to five digits (examples below). It classifies the business activity your company is involved in and must be selected at the time of registering your business with the Accounting and Corporate Regulatory Authority (ACRA), Singapore’s regulatory authority for companies. The SSIC is based on the International Standard Industrial Classification and is monitored and updated at regular intervals by Singapore’s Department of Statistics. The latest version – the Singapore Standard Industrial Classification (SSIC) 2020 – was released in November 2021 with fresh updates and the removal of obsolete codes.
An SSIC code for business activities in Singapore benefits companies in the following ways:
Apart from the importance it holds for businesses, the SSIC code serves an administrative function for the government. Singapore collects SSIC data to analyse economic activity – to understand the growth or decline of certain industries or to identify emerging trends, for example – and use the insights to guide policy decisions. For example, it uses SSIC data to identify business activities that require greater government support. The government also uses SSIC codes to make sure businesses are regulated through ACRA and to determine if they are eligible for tax incentives and support schemes through the IRAS.
The first and most important step in selecting an SSIC code is to be clear about your ‘principal activity’. Here’s how to go about it.
‘Economic activity’ lies at the heart of SSIC classifications and companies need to understand this in order to select the right SSIC code. According to SSIC 2020, “An economic activity takes place when resources such as labour, capital, goods and services are used in a production process to produce goods and services.” It goes on to state that there are three types of economic activity:
To put this into perspective, if your principal activity is the retail sale of mobile phones, then a secondary activity could be repair of mobile phones while ancillary activities would cover anything from HR and accounting activities to sales and promotions.
When a company selects an SSIC code in Singapore, it ideally reflects its principal activity. However, businesses are free to pick up to two SSIC codes for two activities that generate the most revenue.
Although the SSIC code list is regularly updated to keep up with the latest economic activities, there is a chance that your business activity is so unique that it doesn’t have a matching SSIC code. In such a case, you can include a customised description of your business in your registration application on BizFile+, ACRA’s business filing portal.
If you’re still unsure about what SSIC code to select, you can do a keyword search on the BizFile+ SSIC Search page. Or, you can go through the full list of SSIC codes for various business activities in the latest SSIC 2020 report.
Be careful to select the most relevant code as a wrong decision could delay your incorporation process by anywhere from two weeks to two months.
Yes, companies are constantly evolving and the business activity you started off with might not be what you’re still doing five years later. If your business activity has changed, then it is important to change your SSIC code to comply with licensing and other regulatory requirements, and to receive grants and tax incentives you are entitled to. Furthermore, your SSIC code might also change when fresh updates are made to the SSIC code list periodically.
You can change one or both of your SSIC codes by logging on to the ACRA website and simply changing your business activity.
The latest SSIC classification broadly comprises 21 economic activity categories called ‘sections’. Each section is distinguished by a single alphabet. Each section is further broken down into one or more ‘divisions’:
Source: SSIC 2020
Within each section, there are one or more divisions. A division is further divided into ‘groups’, a group into ‘classes’, and each class into ‘sub-classes’. Here is an example of how the SSIC hierarchy works:
The way to read an SSIC code is to understand that the first two digits stand for the major business division while each digit that follows further refines the classification of the business activity.
When the digit 0 appears at the end of an SSIC code, it is usually an addition because there is no further classification. So, the SSIC code for ‘manufacture of basic iron and steel’ is 2410 because it is the only class within the group ‘manufacture of basic iron and steel’ with the classification code 241. Similarly, ‘construction of buildings’ is assigned the SSIC code 410 as it is the sole group within the division ‘manufacture of basic iron and steel’ with the classification code 24.
When 9 appears at the end of your SSIC code, it is an indication of residual activities that are not significant enough to warrant their own SSIC code. For business activities with SSIC codes ending in 9, the description of the activity ends with the acronym N.E.C, which means ‘not elsewhere classified’.
Source: SSIC 2020
Incorporating and selecting the right SSIC code for your company is an important first step, but there’s plenty more to do after that. You can get a smooth start in Singapore with Aspire’s multi-currency business account, with its market-leading foreign exchange rates and unlimited corporate cards. Join today to streamline your accounts payables and accounts receivables, set budgets, and implement a multi-level approval system to stay in control of your expenses.