How to start an e-commerce business in Singapore?

These e-commerce businesses are defined by their immaterial activity and the use of the Internet allowing this platform to have an online visibility and to offer certain products. The e-commerce refers to the online sale of goods or services through merchant websites. The commercial transactions are done through the Internet. In an e-commerce business, the web merchant holds the stock and must prepare and ship the product.

An e-commerce business can help you serve a wider geographic area than a physical retail store. You don’t need to set up stores in different locations. Customers can find your products online and buy them.  This is in line with the corporate laws in Singapore that allow virtual offices allowing many e-commerce SMES to set up shop in Singapore.

The main difference is in the storage and fulfillment of orders. Under the e-commerce model you buy inventory in bulk, sell it, prepare it and pack it. Thus, an e-commerce business can easily suffer heavy losses due to poor product quality or low brand awareness.

On the other hand, with a dropshipping business, you can buy product samples to take your marketing photos but you don’t hold inventory. The inventory is held by a supplier who will have to pack and ship the product themselves.

Some company names and business activities are restricted and require a license before you can do business. For this purpose, Singapore has set up a business license portal.
In operating your business, you must comply with the Internet Code of Practice, the Singapore Advertising Code of Practice and the Electronic Transactions Act.

Therefore, prior to setting up an e-commerce business, it is essential to determine the products and services that will be offered online in order to identify the need for specific licenses or not.

Product selection should be the most important priority when starting an e-commerce business. Not all products work well, you need to consider the demand of the people living in the particular country. It is also necessary to analyze the competition. In order to choose the right product you are going to sell, you can consider some things like:

E-commerce entrepreneurs can use one of the following business structures, which will only be available to Singapore citizens, permanent residents or Entrepass holders:

A foreign company seeking to establish itself in Singapore can use one of the following business entities to register a local presence in Singapore:

In Singapore, registering a business is fairly straightforward. You need to fulfill the government requirements, pay the fees and gather the documents. The process can be done online. There are several requirements that you need to comply with:

Government requirements: you need at least one general manager. You will also need a company secretary. You must have a registered address in Singapore. This address can be a virtual office.

Administrative formalities: it is important to have a company name, which you should check for availability. You must also provide your identification and contact information, and those of all your directors and shareholders, and the company secretary. If you are a foreigner, you must provide proof of residence for yourself and all your directors and shareholders. You must also provide your company’s status and registered local address.

You are also required to submit to ACRA (Accounting and Corporate Regulatory Authority) the administrative documents and the government tax.

Processing time: ACRA processes applications within hours.

This is an important step, you need to look at e-commerce marketplaces, create your own store and use multiple platforms to increase your chances. The main platforms used are Wordpress with its Woocommerce plugin.

Creating your store depends on the platform you choose. Designing your own store offers more possibilities in terms of branding. All you need to do is determine a brand personality and take product photos.

It is important to open a business bank account so that you do not use a personal account and risk affecting your legal liability. There are some major banks operating in Singapore such as OCBC, DBS and UOB. Also, many online banks offer to open a business account for Singaporean companies in a few hours, such as transferwise.

It is important to be prepared to receive income from the beginning, so it is important to present the means by which customers will be able to pay you. There are several payment gateways used in Singapore:

It is important to ensure that the communication flow is set up and works perfectly. For this, it is necessary to be easily reachable. It is therefore advisable to set up an email box for all customer requests, which will be consulted regularly. You must also have a telephone number. It is also important to clearly communicate the response time. For maximum satisfaction, it is important to respond quickly. To do this, you can draft email templates in advance.

All companies incorporated in Singapore must comply with the reporting standards set by the Inland Revenue Authority of Singapore and the company regulator ACRA. All tax returns are mandatory, it does not matter if the company is active or inactive. Failure to meet these deadlines may result in fines and penalties. Reporting deadlines are triggered by the end of the company’s financial year.

The protection of copyright and trademark law is of particular importance in the e-commerce sector as the ease with which images, information and data can be transferred over the internet has created the need to protect intellectual property rights in cyberspace.

Copyright is protected in Singapore by the Copyright Act and extends to creative works. In Singapore, an author is automatically entitled to copyright protection upon creation of his or her work, whether it is registered or in written form. It is not necessary to file an application for registration to obtain copyright protection. Copyright protection prevents anyone other than the copyright owner from copying, reproducing, disseminating, publicly distributing or adapting the work.

A trademark is a name or symbol protected by legal registration that identifies the owner’s product or service and distinguishes it from the products and services of other companies. A trademark gives its owner the right to prohibit any other business from using a similar mark on products. To obtain trademark rights and protection in other countries, it is necessary to register the trademark in those countries or to proceed with an international trademark registration through the Madrid Protocol.

Generally, a Singapore court will have jurisdiction over a case if the defendant is served with a claim in Singapore or the court allows service on a defendant located outside Singapore. A court order obtained in one country can only be enforced against a defendant in another jurisdiction in accordance with the enforcement rules of that jurisdiction. Choice of law refers to the legal principles that will be applied to resolve a dispute. If the online contract does not explicitly state the choice of law, the Singapore court will decide the applicable law based on which law is most related to the agreement.