It’s no secret that Singapore’s online-based enterprises have grown rapidly in recent years, to the point that they now generate billions of dollars annually. According to a report by Facebook and management consultancy Bain & Company, the country’s e-Commerce income is expected to reach US$10 billion (S$13.4 billion) by the end of 2026.
In case you’re wondering, yes, you may get on the e-Commerce bandwagon and participate in the digital revolution. However, while beginning an internet business may appear to be a simple procedure at first, it may quickly become complicated when it comes to the real thing.
You might be tempted to go forward without registering your company with the registrar of companies. After all, aren’t e-Commerce businesses intended to operate almost entirely on the cloud? Is it logical to assume that such systems of operation will exempt you from Singapore’s formal business registration process? But, unfortunately, it does not. You need to follow certain guidelines and take action before you get the ball rolling.
Step-By-Step Guide to Register an e-Commerce Business in Singapore
Some of the stages to successfully starting your own e-Commerce business are mentioned below:
Carrying Out Extensive Market Research
It’s a good idea to do some market research before beginning a business. In your situation, you’ll need to know who your target audience is as well as who your competitors are. Singaporeans are tech-savvy, and a big percentage of them access the internet via their smartphones.
You should also look at the infrastructure you’ll need to communicate with your customers. Singapore has dependable communication networks and high-speed internet access.
Your e-Commerce company business plan should also address the following questions:
- What kinds of products (apparel, electronics, etc.) will you be selling?
- Where and how should you buy things for your Singapore business?
- Where can you get finance for an e-Commerce business?
- What is your competitive edge, or why will consumers buy from you?
Determine How Much and How to Get Money for Your e-Commerce Company
Setting up an e-Commerce business in Singapore doesn’t require too much initial capital. You can get started with a capital of less than $1000. While this is just the start-up cost, the inventory cost will depend on your business needs. The more you procure and store, the more will be your cost. So if you are looking for higher capital, you have multiple options to raise it.
Check out the following details to see which choice best suits your needs:
Self-funding or Bootstrapping
You can fund your firm with your own money, or money borrowed from family and friends.
The Use of Crowdsourcing/Crowdinvesting
Crowdfunding is a method of raising finances by asking a large number of people for small contributions.
Angel Investors Input
Getting private investors to put money into your company.
Venture Capitalists (VCs)
These are professional investors who specialize in investing in startups. They may request a hands-on involvement in your company to ensure its success.
It’s a funding scheme designed to help enterprises in the early stages of development get off the ground. The incubator and accelerator programs in Singapore can benefit e-Commerce businesses with the correct company model and concept. Some of the popular incubator schemes in Singapore include Incubator for Disruptive Enterprises and Start-ups (IDEAS) Fund and Incubator Development Program.
Government Programs And Schemes
Singapore authorities are eager to help their entrepreneurs in any way they can. The government of Singapore offers different incentive programs intending to offer funding to e-Commerce companies that are just starting to set shop. These incentives include:
- Startup SG
- Startup SG Founder
- Startup SG Tech
- Startup SG Accelerator
- Technology Adoption Programme (TAP)
- Innovation & Capability Voucher
- Enterprise Development Grant (EDG)
- Productivity Solutions Grant (PSG)
- Market Readiness Assistance (MRA) Grant
- ACE Startups
- Early-Stage Venture Funding
- Technology Enterprise Commercialization Scheme (TECS)
- Financial Sector Technology and Innovation (FSTI) scheme
- Capabilities Development Grant (CDG)
- ComCare Enterprise Fund
Incorporation Of The e-Commerce Company And Choosing The Best Business Structure
To register your e-Commerce firm in Singapore, you can use one of the following business structures.
- A Private Limited Company (Pte Ltd)
- A sole proprietorship: A business that is owned and operated by one person.
- Limited Liability Corporation (LLC)
The Advantages of a Private Limited Company (Pte Ltd)
By forming a Singapore private limited company, you can begin your e-commerce venture. Pte Ltd is preferred because it restricts its shareholders’ responsibility to their share capital. Here are some benefits of a Private Limited Company (Pte Ltd) e-Commerce company;
- Private Limited Company (Pte Ltd) can be formed by anybody above the age of 18.
- It exists indefinitely.
- The number of shareholders might range from one to fifty.
- It has a legal identity that is distinct from that of its owners.
- It possesses the same rights as a natural person, including the ability to buy property and sue or be sued in its name.
- Singapore enables foreign ownership to be 100%.
- It is simple to transfer ownership.
A corporation, whether international or domestic, that wants to start an eCommerce business can do so by registering a:
- Franchise company
- Office wing
What Do You Need to Form an e-Commerce Company in Singapore?
- A minimum of S$1 in initial funding is required.
- A minimum of one stakeholder (maximum 50)
- At least one director from the area (Singapore citizen, Permanent Resident)
- At least one company secretary is required (ordinarily resident of Singapore)
- At least one auditor is required.
- Local address on file
For your company to be formed, you must submit an application to ACRA (Accounting and Corporate Regulatory Authority). Pay S$15 to register the proposed business’s name and S$300 to incorporate the company.
List of Incorporation Documents You Need To Have
When going to incorporate your e-Commerce website, ensure that you have prepared the documents listed below:
- ACRA must have a record of your business name deposited with them.
- Brief descriptions of the company’s operations
- SSIC (Standard Industrial Classification) Code
- Shareholder information
- Directors’ information
- A registered business address in the area
- Share capital information
- The constitution of a company
Identify a Location for Your Business
It doesn’t matter if you run your business entirely online or if you’re a sales or marketing firm that only take inbound calls and never interacts with customers in person. You won’t obtain the business if you don’t have the correct location.
After all, it’s not just about where your office is on the street. It’s all about the culture and accessibility of your firm. As a result, make sure your business isn’t solely online. Take the effort to create a physical space that reflects your company’s ideals and history.
If you manage a tiny internet business that hasn’t taken off yet, you’ll want to make sure you’re adequately represented. Don’t assume you don’t need to spend time or money on your registered office because you don’t have consumers coming in to buy your stuff.
If you deal on physical inventory that you sell online, then having a warehouse where you store your physical inventory will be necessary. You will have to rent premises where you can store your goods. Make sure you sign a document of tenancy with the owner of the premises.
Starting an e-Commerce Company
Singapore is a society that is quite regimented. It has had a stable political environment since its independence. Its politicians’ well-intentioned and planned policies have allowed it to become Asia’s most desired corporate hub.
- According to the World Bank report 2020, Singapore is ranked second in the ‘Ease of Doing Business’ metric.
- The country is ranked first among competitive economies.
- In 2020, it will be the fifth-largest financial centre in the world.
- Singapore is ranked second in the world for the talent competition.
After you’ve successfully registered your company, the following step is to think about what tools and infrastructure you’ll need to start your e-Commerce firm. These include;
Building your E-commerce Website
- Register a domain name for your company: You have to first register a domain name for your e-commerce company. It needs to be memorable and catchy.
- Create an e-Commerce site: Use a user-friendly site design to present your customers with the information they need.
- Your website should be hosted by one of the best website hosting providers. Ensure you choose a dependable hosting service that will keep your e-commerce site up and running at all times by ensuring security and adequate bandwidth.
- To get in front of online buyers, use social media, content marketing, SEO, Facebook advertisements, and Google ads to promote your e-commerce site.
- Payment gateways: Payment gateways make it simple for your customers to buy from your e-commerce site. Allow them to pay using cash or a bank transfer, as well as credit cards, mobile payments, net banking, and digital wallets.
Building an E-commerce Site on E-commerce Platforms
To make things simpler, convenient and cheaper you can also explore the option to host your site on e-commerce platforms like Shopify. You just need to register with them, choose your desired layout and even customise it if you want, add your products and get going.
But if all this sounds like too much work, you can simply register as a seller on popular e-commerce sites like Lazada, Shopee or Amazon and start selling.
Set Up an Accounting and Bookkeeping System
By tracking and accounting for all financial transactions, regular bookkeeping and accounting assist you in being compliant. You also learn about the financial condition and cash flow of the company. To automate invoice tracking and bank reconciliation, use accounting software. A well-run company can readily obtain loans and investments.
Singapore Taxation Adherence
Singaporean businesses must adhere to IRAS and ACRA reporting requirements. They must submit their tax returns on time. All e-Commerce companies are required to complete and file their tax returns at the end of each fiscal year.
Read more about tax regulations for e-commerce businesses in Singapore.
Permits and Licenses
The Singapore Broadcasting Authority (SBA) Act governs e-commerce activity. e-Commerce website owners, on the other hand, do not need to submit a separate licensing application because they are Class Licensees. You must also follow the Internet Code of Practice, the Singapore Code of Advertising Practice, and the Electronic Transactions Act while conducting your firm (ETA).
Obtain Commercial Insurance
Check to see if your e-Commerce business needs any insurance coverage to protect itself from loss or damage.
You must also ensure that you are not infringing on any copyright or trademark laws in Singapore. Remember to register a corporate bank account for your e-commerce business as well.
Creating a Company Account
Use a company account, not a personal account, regardless of your situation. For starters, it may have an impact on your legal liability. It’s also a lot easier to keep track of your accounts, file taxes, and answer audits later on. It’s just the right thing to do in general.
When determining where to base yourself, incorporating in Singapore is a good option. A solid global reputation, a stable economy, and business-friendly tax policies help you get up and running faster, so you can spend less time caught up in paperwork and more time expanding your company.
While these ten steps may seem simple, it involves a lot of work and dealing with several government agencies. Any glitch can lead to some serious delays in bringing your dream project into motion.
So why not let HeySara be your trusted company compliance service provider to help you glide through the process. We will be there with you from the very first step till the last. You can also rely on us to manage the statutory requirements after you start your business.