Food is our way of life.
From casual catchups with our long-time buddies to professional meetings with business clients – or even first dates with our love interests – food forms the cornerstone of a majority of our social interactions, playing a major role in our daily lives.
In Singapore, the diversity of the food we have around is endless, with almost any cuisine that our hearts could desire. If you’re reading this, you likely have the vision of hopping into this melting pot of delicacies, so let’s help you get started!
Home-Based Food Business vs Standard Food Business
Food-related businesses in Singapore can be broadly categorized as either Home-Based Food Businesses or Standard Food Businesses. In our previous article, we covered the ins and outs of the Home-Based Food Business – looking into what would appropriately constitute a Home-Based Food Business.
Without again going into too much detail, the major differences that set apart a Home-Based Food Business from a standard Food Business include:
- Requirement for licenses (SFA licenses & more) – Home-Based Food Businesses do not require licenses to be run while Food Businesses require various licenses depending on the nature of business (for instance, the Liquor License that permits the distribution of alcohol or Food Shop License that permits the setup of your retail location).
- Customer limitations – Home-Based Food Businesses have a more restrictive customer base as compared to standard Food Businesses due to the lack of SFA licensing. For instance, Home-Based Food Businesses cannot carry out the large-scale sale of food (such as catering services) that food retailers are permitted to carry out.
Additionally, Home-Based Food Businesses are also unable to carry out sales at temporary food fairs such as neighborhood pasar malams or shopping mall food events. - Premises – Home-Based Food Businesses are strictly regulated only to be run from an individual’s residential premises without using heavy appliances or equipment not originally intended for domestic usage (such as storage freezers, commercial ovens etc.)
- Partnerships with merchant platforms – Home-Based Food Businesses will be unable to carry out sales on merchant platforms like Grab due to the need for SFA licensing to partner up with these platforms.
If at this point, a Home-Based Food Business would seem to fit what you envision more, do hop onto our article instead (you can always return later). Otherwise, let’s dive deeper into the world of food retail.
Food Businesses: Food Retail vs Food Processing (Manufacturing)
Before getting into more specifics, it is first important to distinguish between the two main types of food businesses that populate Singapore – the retail food establishments and the food processing establishments.
Food Retail: Food Shops, Food Stalls & Supermarkets
Retail food establishments are establishments that focus on providing finished food products (raw and/or cooked) to consumers – and can be broken down into three main types:
- Food Shops – independent food establishments that run separately from other retail food establishments. Examples include hawker centres, restaurants and bakeries.
- Food Stalls – individual food establishments that are run within food shops. Examples include individual food stalls within hawker centres or school canteens.
- Supermarkets – independent food establishments that run separately from other retail food establishments and are permitted to sell unprocessed meat (poultry and seafood) products.
Each type of establishment is unique from the other, requiring their own set of related licenses that dictate the food products which can be sold.
Manufacturing: Importing & Contract Manufacturing
Food processing establishments are establishments that focus on the manufacturing of food products for distribution to retail food establishments. If you want to get into the food retail industry, there are two key ways of large-scale manufacturing you HAVE to know about – Importing & Contract Manufacturing.
As covered in our article on OEM (contract) manufacturing, contract manufacturing refers to the act of outsourcing your food manufacturing to a third-party manufacturer – such as us at moonbeam.co.
Importing, on the other hand, refers to the act of bringing food products into Singapore from abroad. With each method, there are certain considerations to be aware of in Singapore.
Some brief considerations of the importing route include:
- Reduced costs of production – as compared to contract manufacturing, importing from countries with reduced labor costs would result in a greater reduced overhead.
- Faster market entry – through reducing the need to set up manufacturing operations.
- Focus on core competencies – without the need to focus on manufacturing, your business can focus on product development, branding, and building customer relationships.
- Requirement of additional licensing & registration – to ensure food products entering Singapore are fit for consumption or distribution, SFA strictly regulates the act of importing through licensing & registration.
Some brief considerations of the contract manufacturing route include
- Compliance – as compared to importing, products manufactured in SFA-licensed facilities are more likely to comply with the SFA requirements of food safety.
- Licensing not required – locally manufactured goods are not subjected to import regulations and do not require additional licensing.
- Quality Assurance – as contract manufacturers must also obtain licensing from the SFA, the quality of the food products manufactured is ensured.
- Faster market entry – by reducing the need to set up manufacturing operations.
- Focus on core competencies – by outsourcing production, your business can focus on product development, branding, and building customer relationships.
Thus, you can view importing as a form of overseas manufacturing while contract manufacturing as a form of domestic manufacturing. For someone looking to make their first steps into the food retail industry, the domestic manufacturing route is recommended.
Why you might ask?
Engaging a domestic contract manufacturer (like us at moonbeam.co) can not only provide the peace of mind that your products will meet the safety standards of Singapore, but also be of good quality – as we, the contract manufacturers, are also regulated by the SFA through routine checks and inspections.
Effective communication between supplier and buyer is also vital in ensuring business success and engaging domestic services reduces the likelihood of communication breakdown due to similar geographical locations (aka we are all in Singapore) – where not only would language NOT be an issue, but timezones too.
While some might view timezones as just a bunch of letters (GMT) followed by a random assortment of numbers (+8), it is more than that in the business world. Not only can timezones affect communication but work schedules too – as 9 am on my watch just might not be the same time as the 9 am on the watch of someone else thousands of miles away.
Going with the safer route of domestic manufacturing would likely provide the least stress-inducing time and this is probably a good idea, especially if you’re only just leaping into this industry.
So on a side note, If you’re ever looking for someone to get things done right on a large scale, drop us a message anytime as we’d love to have a chat. Feel free to also check out the products that we have successfully launched to date!
Which Licenses & Certifications are required for a Food Retail Business?
As a Food Business, some relevant licenses and certifications include:
- Food Retail Licenses
- Halal Certification
- Petroleum and Flammable Material (P&FM) storage License
- Fire Safety Certificate & Temporary Fire Permit
- Workforce Skills Qualification (WSQ) Food Safety Course Level 1
- Import-related Licenses or Registrations
However, before you attempt to apply for any of these licenses, do note that you have to first register your Food Business with the Accounting and Corporate Regulatory Authority (ACRA). The ACRA registration establishes your business as a legal entity, allowing you to apply for your relevant licenses and permits.
Licenses have to be renewed after expiry and operating with an expired license is illegal
Finally, licenses will typically only retain validity for a year and have to be renewed after expiry – if you intend to continue running your business. You will be provided with renewal notices before your license expires so do always try to renew them ASAP – as you have to stop business operations while your license remains un-renewed.
You can pay extra for an extended validity period on your Food Stall License
Certain licenses – such as the Food Stall License – also give you the option to top-up for a two-year license validity period so be sure to keep an eye out for that also!
ACRA Registration
The two commonly selected options when registering with ACRA are:
- Sole Proprietorship or Partnership (SP)
- Local Company – Private Limited Company (Pte Ltd)
Sole proprietorship (or partnership) (SP) refers to a business owned and controlled by a single entity – either an individual owner or a partnership. With SP, there are no additional business partners involved (apart from the associated entity) and the entity is not a separate legal entity from the business.
In a sole proprietorship, as the owner (or partners) is not a separate legal entity from the business, they hold and are responsible for all business liabilities (including debts and losses).
To apply for a sole proprietorship, you must be:
- Above the age of 18
- Be a Singapore Citizen, Singapore Permanent Resident or be an eligible FIN holder (the eligibility of a FIN holder can be assessed by contacting their respective pass issuing authorities – ICA or MOM)
If you are a foreigner, you can also apply for SP, under the condition that you appoint a locally-resident authorized representative that fulfills the aforementioned conditions. You should also ensure to contact the MOM (Ministry of Manpower) to seek approval for the management of your business.
A Local Company refers to a business that is registered under the Companies Act and is typically identified by the words “Pte Ltd” found at the end of the company’s name. The primary difference between a local company and a sole proprietorship is the legal status of the local company.
In a local company, the shareholders (partners) of the business are considered as separate legal entities from the business. This means that, unlike sole proprietorship, the shareholders of a company do not hold and are not responsible for the business liabilities.
While this difference may make the local company route seem like the “better” option, you should also be made aware that it is the slightly more complicated one – in terms of registration:
- For Sole Proprietorships (Partnerships) – the individual(s) only needs to register their business name and submit their application for approval
- For a Local Company – officers have to be appointed within the company, which includes roles such as Company Director, Company Secretary, and Auditor. A Company Constitution also has to be prepared alongside the declaration of the company’s Financial Year End (FYE).
As such, both business structures have their respective pros & cons, so it might be handy to find out more about eithe/r on ACRA’s main page before confirming your registration. To find out more, navigate to ACRA’s main page and select “STARTING A BUSINESS“. This should cause a drop-down list to be displayed.
Food Retail Licenses
Depending on the targeted nature of your retail business, you may either apply for the Food Shop License, Food Stall License or Supermarket License:
- Food Shop License – required to operate a food shop where food and/or beverages are being sold. Examples include bakeries, restaurants, and canteens.
- Food Stall License – required to operate a food stall (within a food shop) where food and/or beverages are being sold. For instance, food stalls within canteens, eating houses or food courts.
- Supermarket License – required to operate a supermarket with the sales or preparation of raw foods.
*You may visit the respective links to find out the specific documents required and the process of applying for either license.
Of these three licenses, ONLY the supermarket license permits the sales of raw meats and seafood. The other two licenses only permit the sales of processed (cooked) foods.
These licenses are required under the Environmental Public Health Act (EPHA). The purpose of licensing is to ensure cleanliness and food safety in food retail outlets and to prevent food-borne diseases
As per SFA regulations, these licenses are NOT interchangeable and you should ensure to apply for the correct one if you have either applied for the wrong one or plan to change your business operation. Licenses are also non-transferable and only valid for the stated licensee.
Halal Certification
The Halal Certification is required if you intend to cater towards Muslim customers. This certification ensures that your food production and preparation processes adhere to Islamic Laws – and can thus be consumed by Muslims.
However, applying for a Halal Certification is not as simple as there are specific requirements that you will have to meet first – which include:
- Staff requirements – at least 2-3 Muslim staff must be employed in the premises that the Halal Certification is applied for.
- Halal requirements – any raw material (such as ingredients) used must be Halal and supporting documents will have to be provided.
- System (Halal Quality Management) requirements – the applicant must comply with the ten principles of the Halal Quality Management system.
As there are currently seven types of Halal Certifications, the one you apply for should reflect the nature of your business:
- Eating Establishment (EE) Scheme – issued to retail food establishments which include both food shops (bakeries, confectioneries, restaurants etc.) and food stalls (within canteens, food courts etc.).
- Food Preparation Area (FPA) Scheme – issued to establishments involved in food preparation & distribution such as catering establishments and central kitchens.
- Poultry Abattoir (PA) Scheme – issued to poultry abattoirs (slaughterhouses) for their freshly slaughtered poultry.
- Endorsement (EN) Scheme – issued to imported, exported or re-exported food products to endorse their Halal certification.
- Product (PRO) Scheme – issued to products that are either manufactured or partly manufactured and processed in Singapore.
- Whole Plant (WP) Scheme – issued to manufacturing facilities and their products.
- Storage Facility (SF) Scheme – issued to storage facilities (stationary or mobile) such as warehouses and cold rooms)
Petroleum and Flammable Material (P&FM) storage License
Depending on the amount of petroleum or flammable material that you intend to keep within your premises, you may need to apply for a P&FM storage license. This is done to ensure the fire safety of the building and the individuals within as flammable storage is considered a high-risk activity.
The license exemption quantity refers to the maximum amount of petroleum or flammables that can be stored without a license
As the gas commonly used in cooking (Liquified Petroleum Gas – LPG) is considered a Class 0 petroleum, the exemption quantity for a Class 0 petroleum would be the most relevant for you.
The license exemption quantity for food shops (eating places or restaurants) is 200kg of Class 0 petroleum and 30kg for individual food stalls within a food shop.
To apply for the P&FM storage license, a prerequisite license which you might need is the Fire Safety Certificate or the Temporary Fire Permit.
Fire Safety Certificate & Temporary Fire Permit
The Fire Safety Certificate (FSC) ascertains that your premises meet the requirements for fire safety – which includes the necessary fire installations and safety measures. Applying for the FSC is relevant if, during premise renovation, you intend to change the design and/or the layout of your fire compartments and installations.
In such cases, you should ensure to contact the owner of the premises (if you don’t own the premises) to either request for the FSC or discuss your plans to make changes to the fire safety measures – before any sort of renovation.
Do note that you will also be required to engage a Registered Inspector to inspect and certify your installed fire safety measures before applying for an FSC.
The Temporary Fire Permit (TFP) is only issued when fire safety requirements are satisfactorily met with minor issues for rectification. The TFP issued will maintain validity for a specified period (changes on a case-by-case basis) and individuals are required to obtain the FSC before the expiration of the period validity.
Workforce Skills Qualification (WSQ) Food Safety Course Level 1
The WSQ Food Safety Course Level 1 is a collaborative effort by the SFA and SkillsFuture Singapore (SSG) that provides its participants with the relevant skills and knowledge required to ensure food safety and hygiene. This is a one-day course and spans 7.5 hours (which includes both the lessons and assessments)
Individuals preparing food for sale in SFA-licensed food establishments are required to attend and pass Food Safety Course (FSC) Level 1
The course covers five primary topics:
- Topic 1: Practicing good personal hygiene
- Topic 2: Using Safe Ingredients
- Topic 3: Handling food safely
- Topic 4: Storage of food safely
- Topic 5: Proper maintenance of equipment and premise cleanliness
The certificate will be issued to you upon completion and passing of a 1.5-hour assessment that occurs at the end of the course. This assessment will consist of both a practical and a written assessment.
The certificate obtained will have a validity period of 5 years – whereupon expiry – you will be required to undergo a refresher course to renew your certificate.
Import-related Licenses or Registrations
A valid license is required for the import of:
You can find additional information about the SFA import regulations here.
For processed foods – such as biscuits, nuts or milk products – you need to instead register with the SFA. You may find out the classifications that your food product falls under here.
Who can you sell to?
As a SFA-licensed food retailer, your only restriction is that you will be unable to cater to other food retail establishments – SFA-licensed or not. But apart from that, your sales can include:
- Deliveries – catering & on merchant platforms (Grab)
- Temporary Food Fairs
- Export
With temporary food fairs and exports, however, some additional licensing is needed where:
- For Temporary Food Fairs – you will be required to apply for the Temporary Fair Stall License.
- For Exports – you will be required to apply for the Free Sale Certificate and Export Health Certificate. Depending on your product for export, you may also be required to apply for a Trader’s license (similar to the import-related licenses & registrations).
Food Retail Establishments
As a food retail establishment yourself, you will not be able to provide services to other food retail establishments (unless for their own consumption).
To supply to other food retail establishments, you will need to possess the food processing establishment license – as the food retail licenses do not allow food processing for distribution to other food retail establishments.
Temporary Food Fairs
The Temporary Fair Stall License is required for you to set up a food stall within a temporary food fair. This is not to be confused with the Temporary Fair Permit – which permits the setup of the temporary fair. The application of the Temporary Fair Stall License is also free-of-charge so there is no reason to not apply for it!
In the recent years, there have been incidents of food fair stalls being suspended and fined due to the lack of valid temporary fair licensing
However, with temporary food fairs, there are some restrictions to the food that you can sell, regardless of the SFA licenses that you possess. As per the SFA, this includes the sales of:
- Raw ready-to-eat meat or seafood products – such as sashimi or sushi
- Dishes prepared on-site containing raw ready-to-eat ingredients – such as Chinese & Malay Rojak or Vietnamese & Chinese spring rolls
- Dishes that consists of food items open displayed at ambient temperatures for customers to hand-pick
Apart from these restrictions, certain food products can also only be used or sold if stipulated conditions are met – examples include:
- Only the usage of pre-packed food-grade ice from ice factories is permitted.
- Dispensers for milk or milk-based drinks must be equipped with temperature control to ensure the beverages are kept at 4°C or lower.
Food Exports
To carry out food exports, you will require both the Free Sale Certificate and the Export Health Certificate – where:
- The Free Sale Certificate – serves as a form of SFA endorsement for imported or locally manufactured food products meant for export.
- The Export Health Certificate – certifies that the imported or locally manufactured food product is safe for consumption and meets the sanitary standards stipulated by the countries to which the product will be exported.
What are the Singaporean Legislations that apply to Food Businesses?
Apart from the licenses that you will have to apply for (explained in the next section), some relevant legislations that you should be aware of include:
- Sale of Food Act (SOFA)
- Wholesome Meat and Fish Act (WMFA)
- Environmental Public Health Act (EPHA)
- Infectious Disease Act (IDA)
Sale of Food Act – SOFA
The Sale of Food Act (SOFA) is involved in the regulation of food sales and ensuring safety for human consumption. This is reinforced within the legislation, such as under Section 15, which states that all food providers are required to avoid the sale of food that might be or is unsafe for consumption.
This is further reinforced by Section 18, which states that food which is not of good quality or the quality expected by the purchasers should not be sold.
Other relevant sections include:
- Section 8 – states that any food made can be legally subjected to analysis by authorized personnel upon request
- Section 11 – states that food products which have had their ingredients altered should not be sold or distributed unless the consumer is made aware of these changes.
- Section 13 – states that food manufacturers should ensure to follow the imposed regulations when manufacturing food products that contain ingredients which have their usage regulated (such as alcohol)
- Section 49 – states that for breaching rules within the SOFA, first-timers can be liable to a fine of up to $5000 while repeated offenders can be subjected to both a fine of up to $10,000 and imprisonment of up to 3 months.
Wholesome Meat and Fish Act – WMFA
As its name suggests, the WMFA regulates the sales and distribution of meat and fish products, from the initial slaughtering to the processing & packaging. As such, this legislation is only relevant if you intend to work with meat or fish products.
The relevant sections to take note of include:
- Sections 5 & 6 – prohibits the distribution of meat and fish products with the valid licenses and permits (illegal importation and exportation)
- Section 22 – prohibits the usage of any premise as a wholesale market (store) unless the individual possesses the required licenses.
- Section 23 – prohibits the sales of meat and fish products if stipulated regulations are violated. Some examples of regulations include undergoing inspection and obtaining certification from an authorized examiner prior to distribution or obtaining the appropriate licenses that permit distribution.
- Section 26 – states that food products found to be diseased or unfit for consumption must be destroyed upon the request of authorized personnel.
Environmental Public Health Act – EPHA
The key details that you should take note of within the EPHA include:
- Water Safety – ensuring that the water used for food preparation is of appropriate purity and quality.
- Food Hygiene Regulations – ensuring that prepared food is fit for consumption and handled and stored appropriately.
Infectious Disease Act – IDA
The (IDA) deals with the prevention and control of infectious diseases in Singapore, with the relevant SFA-enforced sections including Sections 39, 44, 55 and 57.
Sections 39 and 44 are related to the prevention of the international spread of diseases from Singapore while Sections 55 and 57 are related to the enforcement of the IDA regulations. As such, Sections 39 and 44 are only relevant if you intend to partake in export-related activities.
- Section 39 – states that any food products for consumption or retail can be legally subjected to analysis by authorized personnel if suspected to be contaminated or unfit for consumption. In such scenarios, the authorized personnel can also order for the destruction of these food products.
- Section 44 – states that individuals in-charge of vessels (air or sea) should take the proper measures to ensure the safety of individuals working on the vessels.
- Section 55 – states that during the investigation of disease outbreak, authorized personnel may enter any premise without warranty and seize substances (including food) for analysis. In such scenarios, the authorized personnel can also order for the destruction of these food products.
- Section 57 – states the individuals are required to comply and provide their personal details (name, address, proof identity) for investigative purposes.
Conclusion
Starting your own food retail business is no small-feat and hopefully with this guide, you are now better equipped to begin your journey. We, at moonbeam.co, are always open to discussing and collaborating in new business ventures so do not hesitate to contact us anytime!