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A Step-by-Step Guide to Registering Your E-Commerce Business in Singapore

Hello, I am Leslie and I have completed the accounting degree from SPPPU.

Registering Your eCommerce Business In Singapore.

Registering Your eCommerce Business In Singapore.

You can set up an e-commerce company to facilitate commercial transactions between interested parties using the Internet. It could be buying or selling goods, products, services or transactions involving money, funds, or data online.

Depending on your business goals, you can build your company to facilitate online commercial transactions between:

  • Business to Business (B2B)
  • Business to Customer (B2C)
  • Customer to Customer (C2C)
  • Customer to Business (C2B)

What is needed to register an eCommerce business in Singapore?

To register a company, you will need to apply to the Accounting and Corporate Regulatory Authority (ACRA), the Company Registrar of Singapore.

Market Research

Before you move on to register an e-commerce business, you should have researched and pinpointed the business niche you want to exploit and the products or services you wish to sell or promote. Market research and surveys will give you deep insights into your competition, target market and audience.

Planning

You should also have a flexible business plan, well-defined objectives and goals, detailed financial planning, and enough budget to meet all the needs of your new Singapore company. You also need an understanding of versatile and borderless models.

Choose Legal or Business Structure

The next step is to choose a legal or business structure to form your business. You can set up your business as a sole proprietorship, limited liability partnership, or a private limited company.

Choose carefully, as your business' taxation, liability and growth prospects depend on the business structure you use. In the case of a sole proprietorship, your liability is unlimited. If your business ends up losing money and incurs debts, your personal property may be used to pay them.

Private Limited Company

Business owners prefer to start their business as a private limited company. Many of them hire registered filing agents or Singapore company incorporation services providers.

  • Private limited companies are dynamic and scale as per the needs of a growing business
  • Investors and lenders consider them credible and find it easy to raise capital for expansion

Pre Company Incorporation Requirements

To set up an e-commerce company, you need to fulfil the pre-incorporation criterion:

  • At least one shareholder
  • Minimum initial capital of S$1
  • At least one local or resident director
  • At least one company secretary
  • At least one auditor
  • Registered local address

Incorporation Documents

You will also need to put together your incorporation and KYC documents.

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  • Company name registered with ACRA
  • Brief description of business activities
  • Registered local address
  • Particulars of shareholders, directors, company secretary,
  • Foreign entrepreneurs: a copy of passport & proof of residential address (overseas)
  • Foreign corporates: Memorandum & Articles of Associations, Certificate of Incorporation
  • Singapore residents: Copy of Singapore ID

2 Steps to Set Up an E-commerce Company

The process to set up an e-commerce company has only 2 steps:

Step 1: Register name of the proposed company with ACRA

You must, first, check the availability of the name of your proposed company. Your agent can help you with this step.

Submit a list of 3-5 names to your agent. They will check the name availability on the ACRA's portal and register the available one for your use.

Make sure that none of these is:

  • Vulgar or indecent
  • Unique and meaningful
  • Not blacklisted by Minister

Step 2: Apply to ACRA to start your company

With a company name approved by ACRA and your incorporation documents in hand, your agent will apply to ACRA to set up an e-commerce company for you.

ACRA takes about 1-3 days to approve or reject your application. On success, it sends you an email giving details of your new company like Unique Entity Number, business profile, Etc.

In Singapore, this email serves as an Incorporation Certificate. Your agent can pay the required fees if you need a hard copy. ACRA sends you a PDF file that you can download and print for your use.

E-commerce Business as a Home Office

Since you don't need to hold physical inventory, you can also think of starting your e-commerce business as a Home Office.

Take permissions from the URA or HDB authorities. You will also need to comply with the requirements applicable to a home office. It will save your rent and travelling expenses.

Virtual Address Service

If needed, you can hire a registered office address or virtual address service located in the main business district for meeting your business associates.

Build Your Online Store and Business Website

Take help professionals to build your online store. You must choose a reliable platform and sales channel. Explore options like Shopify, WooCommerce, etc.

A well-designed business website gives a face to your business. It also serves as a platform where your targeted audience can communicate with you. You will need to write catchy and useful content to lure them to it.

Try to register a domain name that is similar to your business name. And let experts take care of website design and development and logo design because intuitive design, loading time, secure payment gateway builds confidence. And host it with a reliable hosting services provider.

How much does it cost to register an eCommerce business in Singapore?

The official cost of registering your business as a private limited company is clearly defined. ACRA charges S$15 to register the name of the company. ACRA's fee for processing the application to set up an e-commerce company is S$300.

Then there are added costs of:

  • Applying and acquiring business licenses and permits
  • You will also need to open a MediSave account for your business and top it up
  • Pay for business insurance

Before you start your business activities, open a corporate bank account for your new company. It will help you separate your personal and business finances.

What are the tax obligations for eCommerce businesses in Singapore?

Bookkeeping and Accounting

Experts advise new business owners to start bookkeeping and accounting as early as possible. It helps in keeping track of money going in and out of your business. Most importantly, it helps in complying with the statutory regulations.

Singapore-sourced Income

It may happen that your e-commerce company is facilitating online buying and selling through an overseas platform.

If the business operations facilitating these activities are based in Singapore, then your business' income is taken to be Singapore-sourced.

File a Tax Return

You will need to file a tax return if your total annual net trade income exceeds $6,000 or if your annual taxable income, including net trade income, exceeds $22,000.

You also need to file a tax return if IRAS sends you a letter, form or SMS to inform you to do so.

Corporate Income Tax

IRAS reviews your tax return and sends you a Notice of Assessment or tax bill. You then have one month to pay your tax. Pay it even if you disagree with the IRAS and has filed an objection.

Goods and Services Tax (GST)

If your revenue for the past 12 months or projected revenue for the next 12 months is over S$1million, you will need to register your business for GST.

Online and offline supplies of goods and services in Singapore are treated equally. You will need to collect 7% of GST from each of your customers and transmit it to IRAS as per schedule.

What are the compliance obligations for eCommerce businesses in Singapore?

The InfoComm Media Development Authority (IMDA) of Singapore governs all content on the internet, information and communication, and media.

Check if you need any business permits and licenses for your e-commerce company. It will largely depend on your business activities and the products and services you intend to offer to your target audience.

Make sure to acquire an appropriate license if your business activity involves:

  • Online gambling service provider
  • Online financial products and services
  • E-tailing of used goods
  • Online promotional activities
  • Web advertising of goods and services

In addition, you need to be aware of and comply with provisions of various Acts to protect the rights of consumers and their private data:

  • Personal Data Protection Act
  • Sale of Goods Act
  • Internet Code of Practice
  • Misrepresentation Act
  • The Computers Misuse Act
  • Copyright Act
  • Singapore Trademark Act
  • Electronic Transactions Act (ETA)
  • Unfair Contract Terms Act
  • Singapore Code of Advertising Practice
  • Consumer Protection Act
  • Common Gaming Housing Act
  • The Public Entertainment Act
  • Second Hand Dealers Act
  • Betting Act
  • Guidelines on Offer of Securities made through the Internet
  • Internet Code of Practice
  • Singapore Broadcasting Authority (SBA) Act

You can ask your agent for assistance to ensure your compliance.

How do I get started?

If you are a foreigner, you will need to appoint a registered filing agent to set up an e-commerce company for you. Even many local business owners hire agents to form their businesses. You can easily find a lot of agencies assisting in the same area at very low prices.

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