Setting Up an E-Commerce Company in Singapore
E-commerce or online business is an attractive proposition. It is why many entrepreneurs are opting for company incorporation in Singapore to establish one.
An e-commerce company can help you cater to a wide geographical area than a brick and mortar shop. You do not have to set up shops or offices in different locations. Customers can locate your products online and buy them. It saves their money, time, and efforts.
Steps for Registering an E-Commerce Company in Singapore
Step1: Research Your Market
Before starting any business, it is wise to research the potential of the market. In your case, you will need to know your target audience and competitors. Singaporeans are tech-savvy people, and a large percentage of them use smartphones to access the internet.
You also need to research the infrastructure you will need to reach out to your customers. Singapore offers reliable communication networks and internet connectivity.
Your business plan should also answer:
- What types of product will you be offering (Apparels, Electronic, etc.)?
- Where and how of buying products for your Singapore company setup?
- Where to find business funding?
- Why will people buy from you, i.e. your competitive advantage?
Step2: How to Fund Your E-Commerce Business
Singapore authorities are very keen on offering all the assistance they can to their startups. Especially, e-commerce companies with the right business model and plan, you can benefit from the incubator and accelerator programs in Singapore. Go through the following info to know which option meets your requirements:
1. Bootstrapping or Self-funding
Fund your startups using your savings or money from family and friends.
Crowdfunding means collecting funds by asking for small contributions from a large number of people.
3. Angel Investors
Asking private individuals to invest capital in your business.
4. Venture Capitalists
These are professional investors specializing in startups investments. They may ask for a hands-on role in your business to ensure its profitability.
It is a funding system to get the businesses in initial development stages off the ground.
6. Government Schemes
- 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
Step3: Selecting Right Business Structure
You can choose one of the following business structures to register your e-commerce business in Singapore.
- Private Limited Company (Pte Ltd)
- Sole Proprietorship
- Limited Liability Partnership
Benefits of Private Limited Company (Pte Ltd)
You can start your e-commerce business by registering a Singapore private limited company. Pte Ltd is favoured as it limits the liability of its shareholders to their share capital.
- Any individual above the age of 18 can register Pte Ltd.
- It has perpetual existence.
- Its shareholders can be from 1-50 in number.
- It has a separate legal identity from its owners.
- It has the rights of a natural person; buy property or sue or be sued in its own name.
- Singapore allows 100% foreign ownership.
- Transfer of ownership is easy.
A foreign or local company trying to start an e-commerce business can do so by registering a:
- Subsidiary Company; or
- Branch Office
Company Incorporation in Singapore: What Do You Need
- Minimum initial capital of S$1
- At least one shareholder (maximum 50)
- At least one local director (Singapore citizen, Permanent Resident)
- At least one company secretary (ordinarily resident of Singapore)
- At least one auditor
- Registered local address
You need to apply to ACRA (Accounting and Corporate Regulatory Authority) for your company incorporation. Pay S$15 to register the name of the proposed company and S$300 as the company incorporation fee.
List of Incorporation Documents
- Company name registered with ACRA
- Brief details of company activities
- SSIC Code
- Particulars of shareholders
- Particulars of directors
- Registered local business address
- Details of share capital
- Company constitution
Step4: Establishing an E-Commerce Business
Singapore is a highly disciplined society. Since its independence, it has enjoyed a stable political environment. Well-directed and purposeful decisions by its politicians have allowed it to emerge as the most favored business hub in Asia.
- Singapore, as per the World Bank report 2020, ranks at the 2nd place for the ‘Ease of Doing Business’ indicator
- The country ranks 1st in the list of competitive economies
- It ranks at the 5th spot as the large financial center in 2020
- Singapore ranks at the 2nd place for talent competitiveness
Renowned for Protection of IP
Register a domain name: Register a domain name that will identify your business. It should be catchy and easy to remember.
Design your e-commerce site: Use pro-user web design that will provide required product info with your users.
Host your website: Choose a reliable hosting service that will keep your e-commerce site accessible all the time by providing security and enough bandwidth.
Market your e-commerce site: Leverage social media, content marketing, SEO, Facebook ads, & Google ads to get in front of online buyers.
Use Payment gateways: Make it easy for your buyer to buy from your e-commerce site by using payment gateway. Enable their cash or bank transfer; credit cards, mobile payments, net banking, or digital wallet payments.
Step5: Set-Up Bookkeeping and Accounting System
Regular bookkeeping and accounting help you in being compliant by tracking and accounting for all financial transactions. You also get to know business’ financial health and cash flow. Implement accounting software to automate invoice tracking and bank reconciliation. A healthy business can easily secure loans and investment.
Singaporean companies must follow the reporting standards by IRAS and ACRA. They have to be prompt with their tax filings. They have to complete it at the end of each of their financial year.
Step7: Licenses & Permits
E-commerce activities come under the Singapore Broadcasting Authority (SBA) Act. However, as one of the Class Licensees, e-commerce website owners do not have to make a separate license application. While running the business, you also need to comply with the Internet Code of Practice, Singapore Code of Advertising Practice, and Electronic Transactions Act (ETA).
Step8: Get Business Insurance
See, if your e-commerce business needs any insurance cover to protect itself from any damages or harm.
You also need to see that you are not violating any copyright, or trademark laws that are in force in Singapore. And do not forget to open a corporate bank account for your e-commerce business. SBS Consulting Pte Ltd is a registered filing agent in Singapore. We can provide expert assistance to establish your Singapore company setup so that you can start your e-commerce activities within no time.