Having a proper plan for an e-commerce registration is essential if you are planning to dive into the realm of e-commerce business in Singapore. The global epidemic accelerated e-commerce development, with businesses adapting digitally to survive and prosper.
The novelty of owning an online business continues to increase, and establishing an e-commerce business remains appealing. Low overhead, diverse revenue models, and a worldwide clientele will ensure that it stays that way for the foreseeable future. Our guide below covers all the important aspects of an e-commerce registration below.
WHAT EXACTLY IS AN E-COMMERCE BUSINESS?
- E-commerce is an abbreviation for electronic commerce, which refers to business transactions and activities that occur online.
- It is considered a subset of e-business, which includes all internet enterprises.
- E-tailers (online services, such as virtual tuition), e-goods (digital items, such as online courses), and physical goods from stores are all part of e-commerce. These companies can also use any of the following business models: –
- Direct-to-Consumer (D2C)
- Consumer-to-Government (C2G)
- Business-to-Government (B2G)
- Government-to-Business (G2B)
- Business-to-Consumer (B2C)
- Consumer-to-Business (C2B)
- Consumer-to-Consumer (C2C)
- Business-to-Business (B2B)
TYPES OF SG E-COMMERCE BUSINESSES
There are various types of e-commerce businesses, such as dropshipping, white-label, and manufacturing. Further explanation of these businesses can be seen below.
Dropshipping indicates that you will merely operate as a storefront, where you will find a buyer and then sell them the stuff you obtained elsewhere. This is a straightforward strategy in which you can concentrate on marketing, storefront, and customer communication.
Make an awesome brand and find things to sell under it. You may offer soaps, face masks, candles, chocolates, and toys made by various companies but branded under your name. It might also be sports equipment, automotive accessories, or anything else that comes to mind. This e-commerce business type needs a significant branding effort.
A conventional model in which you oversee the whole manufacturing cycle from start to finish. This business is more complex than e-commerce and needs more time and effort. It’s riskier since you frequently have to create in quantity, optimize expenses, and manage storage on top of selling. If effective, it also provides larger margins since you eliminate the middleman.
WHY SHOULD I REGISTER FOR E-COMMERCE IN SINGAPORE?
- Singapore may be one of the best countries to start your entrepreneurial e-commerce path. This island nation ranks first in the ease of doing business, in addition to having a strong government and world-class infrastructure. Singapore, on the other hand, offers the fastest internet download speeds in the world, which is very important for e-commerce enterprises.
- Based on the most recent statistics, Singapore’s B2C e-commerce market is growing at an 8.35% compound annual growth rate (CAGR). The forecasted market volume for 2025 is over USD 4,079 million, with 90% of the population online.
- The government is launching a number of 5G networks in order to improve connectivity and infrastructure. Singapore is well on its way to becoming a smart nation and Southeast Asia’s e-commerce center, thanks to robust regulations and goals.
WHAT ARE THE IMPORTANT PREPARATIONS THAT I SHOULD KNOW BEFORE REGISTERING FOR E-COMMERCE IN SINGAPORE?
In some instances, running an e-commerce business varies from running a traditional business. It is critical to understand that the processes behind such business models are diverse, flexible, and borderless. As a result, preparation and planning are essential, and they include:
Research feasible company concepts, competitors, target markets, your degree of commitment, etc.
Setting up a business strategy
Strategies such as niches, objectives, goals, milestones, financial planning, budgeting, and so on.
Selecting a business structure
Among the available business, structures are sole proprietorships, limited liability partnerships, or limited companies.
SHOULD I OBTAIN APPROVAL BEFORE SETTING UP AN E-COMMERCE BUSINESS IN SINGAPORE?
- In Singapore, the InfoComm Media Development Authority (IMDA) governs all internet content, information and communication, and media. The Personal Data Protection Commission (PDPC), which controls data protection in Singapore, is presently part of the IMDA.
- The rules and regulations are tight in order to maintain consumer protection and confidence. Relevant and pertinent legislation to be aware of is as follows:
- Copyright Act and Trade Marks Act
- Electronic Transactions Act
- Internet Code of Practice
- Personal Data Protection Act
- Sale of Goods Act
Depending on the sort of items or services offered, e-commerce businesses will require licenses and permissions. As a result, approvals are tied to company activity, and enlisting expert assistance is the only way to stay fully compliant. The following are some examples of activities that may need licensing:
- Buying and selling used items
- Gambling or luck-based games
- Providing financial services or goods
- Promotional acts
WHAT IS THE PROCEDURE FOR REGISTERING AN E-COMMERCE BUSINESS IN SINGAPORE?
(1) Research strategy
- Conducting preliminary market research is an important first step in learning about your target market, how to reach them, and estimating the projected demand for your product or service.
- Typically, your preliminary study should include answers to queries such as:
- What kind of product or service will you be offering?
- Who are your buyers?
- Where and how will you get your products?
- How are you going to fund your company, and what is your backup plan?
- What are your rivals’ strengths and weaknesses?
- What makes you stand apart from your rivals?
(2) Financial Assistance & Funding
- Singapore has everything a company needs: financing programs, tax breaks, cash awards, venture capital, and business-incubating infrastructure.
- In addition, e-commerce businesses have access to a wide range of finance and financial tools to help them develop.
The traditional business loans
Perhaps the simplest method is to receive extra money to fund your business. However, this ease comes with high risk and expense in terms of losing not just your business but also your wealth if things do not go as planned.
Unlike a traditional loan, this one does not need repayment of the principal amount in monetary terms. The investors claim a portion/share of your business in exchange for their investment in it.
The Singaporean government has been quite active in terms of new businesses and is always looking for fresh investment. Several programs make cash available to start-ups and specialized industry enterprises. Grants, company incubator schemes, and tax breaks are a few examples of such programs.
(3) Choosing the most suitable business structure
Entrepreneurs in e-commerce might consider employing one of the following company structures:
- Limited Liability Partnership (LLP)
- Private Limited Company (Pte Ltd)
- Sole Proprietorship (SP)
WHAT ARE THE KEY REQUIREMENTS FOR THE INCORPORATION OF E-COMMERCE BUSINESS IN SINGAPORE?
We recommend making a shortlist of three options in case your first choice is unavailable.
Must have at least one director who is over the age of 18 and has not been barred from holding a directorship in Singapore or abroad.
Must have at least one locally resident director. This is someone who is a Singapore citizen, Permanent Resident, or holder of an EntrePass visa at the time of incorporation.
Must have between 1-50 shareholders who are individuals or a legal entity such as a trust or another corporation.
The minimum paid-up capital that is needed to register a business in Singapore is S$1. The share capital can be raised at any moment after incorporation.
The address submitted for the business must be in Singapore. A physical address is required.
Every business must have a company secretary. This person will assist the directors in preparing and filing the relevant papers to ensure the company is in line.
Unless the company has been excluded from audit, every company must hire an auditor within three months after establishment.
WHAT ARE THE REQUIRED DOCUMENTS FOR THE REGISTRATION OF E-COMMERCE BUSINESSES IN SINGAPORE?
To incorporate your business in Singapore, you must apply with Accounting and Corporate Regulatory Authority (ACRA), which oversees company registration in the city-state. You must supply the following documents:
- Company name
- The description of activities and Singapore Standard Industrial Classification (SSIC) code
- Details on shareholders, directors, and KYC
- Registered address in Singapore
- Details on share capital
- The constitution of the company
(5) Infrastructure for e-commerce
After successfully registering your company, the following step is to examine what tools and infrastructure you may require to establish your e-commerce company.
A domain name
This will be the name of your brand. Make sure you choose a domain name that accurately represents your brand and is easy to remember.
A hosting site will guarantee that you have adequate security, and bandwidth and that your site is always up and functioning.
Make sure the design is user-friendly and gives enough information about your product to the consumer.
Advertising and marketing
A solid marketing strategy is required to guarantee that more people learn about your company. Many e-commerce businesses sell their services and products using social media platforms and other paid internet marketing methods.
These are technologies that enable e-commerce sellers to accept payments from customers in ways other than cash or bank transfer, such as credit cards or digital wallet payments.
If you are overwhelmed with the procedure stated above, you have nothing to worry about as Relin Consultants are always here to assist you. Our highly skilled and competent agents are just one call away from guiding you in the e-commerce registration process. Just give us a call at +65 8756 2027, and we will be in touch with you soon.
HOW ARE E-COMMERCE BUSINESSES IN SINGAPORE TAXED?
- All Singapore-incorporated companies must fulfill the reporting requirements established by the Inland Revenue Authority of Singapore (IRAS) and the Company Regulator
- Whether your Singapore business is active or dormant, all tax filings are required. Failure to fulfill these dates may result in fines and sanctions, including the removal of directors.
- The end of the company’s fiscal year triggers reporting requirements.
Are foreigners allowed to own an e-commerce business in Singapore?
Yes, the Singaporean government permits 100% foreign ownership of Singapore companies, including e-commerce businesses.
How long will it take for my e-commerce business in Singapore to be successfully incorporated?
ACRA often processes applications within hours, so it all depends on how much time you need to gather all of the necessary data and papers.