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It is a misconception that you do not have to register your Singapore online business. It is a total rubbish! If you are looking for how to start an e-commerce business in Singapore or any other type of business, you have to register it with ACRA, the Company Registrar.
Do I Need to Register My Online Business in Singapore?
You can start an online business easily. It is actually affordable than starting a brick and mortar business. As the initial investment is low, you can even start and operate it from your home.
ACRA has made it quite clear that if you are carrying out any gain/profit-making activity continuously, you must register it.
Use Right Business Structure for Singapore Business
As an individual entrepreneur (local and foreigner), you can register your Singapore business using one of the following business structures:
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Private Limited Company (Pte Ltd)
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Sole Proprietorship
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Limited Liability Partnership (LLP)
However, your best bet is to incorporate a private limited company to exploit one of your online business ideas in Singapore. A Pte Ltd limits your liability to the amount you have invested in its shares.
A corporate can use following business entities to register its business:
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Subsidiary Company
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Branch Office
Pre Company Incorporation Requirements
The experts from your Singapore company incorporation services provider assist you with the incorporation documents, processes, and the steps involved. You must meet a few requirements for setting up a private limited company.
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At least 1 shareholder
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At least 1 resident director
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At least 1 company secretary
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Minimum of $1 as initial paid-up share capital
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Registered office address in Singapore
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Memorandum and Articles of Association (M&AA)
Singapore Incorporation Documents
You also need to submit following documents along with the application to register a company so as to fulfill the conditions dictated by the ACRA:
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Singaporean Business Owners
Copy of Singapore Identity Card
Foreign Individual Entrepreneurs
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Description of business activity
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Memorandum and Articles of Association (M&AA)
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Copy of passport
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KYC documents- Overseas residential address proof, Bank reference letter, Personal and business profile, Particulars of directors, company secretary, and shareholders
Corporate
Copy of their Certificate of Incorporation and Constitution
Procedures For Registering a company with ACRA
You can start an e-commerce business in Singapore by completing only two procedures; A)Register company name and B)Register company with ACRA.
Choosing Similar Name for E-Commerce Website & Company
Most importantly, the name of your business is useful for branding it. So, you need to come up with something that will be catchy, easily remembered, and something that tells your clients about the nature of your business.
Make a list of 3-5 names and give it to your incorporation agent to check online on ACRA's website. If one of them is available, they will pay the ACRA fees and reserve it for your use.
If you want to start an e-commerce business in Singapore, it is obvious that you will need to create a website. It will be of real advantage if its domain name matches that of your business. It will make your marketing campaign that much simple.
ACRA wants to keep the name of the businesses distinct so as to avoid the confusion in the minds of investors. The agency reserves the right to reject a name if it is similar to that of any existing business or violates any trademark or a brand name. It can also reject any malicious, vulgar, or blacklisted name.
Applying to ACRA for Registering Your Business
With all the incorporation documents and approved company name in hand, your agent will then apply to ACRA to register your Singapore company. It is a straightforward process and takes no time. Sometimes such applications get referred to the external authorities and then, the approval may take as many as 2 months.
After the successful registration of your Singaporean e-commerce business, ACRA sends an email containing the details of your company. The email serves as the Certificate of Incorporation in Singapore. Your agent can pay a small fee to ACRA and get its hard copy for you.
Post Registration Tasks
You cannot just go and start your business activities even though your company is registered. At this stage, you need to check and find out what the e-commerce law of Singapore says about the licenses or permits that you may need.
As the owner of an e-commerce website, you are regarded as “class licensees.” It exempts you from separate license application. However, if you intend to produce any marketing content and publish it on your website, you will have to apply to the Singapore Broadcasting Authority (SBA) for the license.
You will also strictly follow the Internet code of practice (ICP) statutes of Singapore. Both rules apply to you if the servers hosting your website are located in Singapore.
There are certain other post-registration tasks that you must complete on war-footing. In fact, you can ask for assistance from your incorporation agent. They are listed as follows:
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Obtain a tax number for your new web-based business
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Register for GST (Goods and Services Tax)
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Opening a corporate bank account
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Register for the Central Provident Fund (CPF) and top-up the account
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Register for the Skills Development Levy (SDL) and pay the fees
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Appoint an auditor within the 3 months of company registration
Bookkeeping and Accounting
It is important for every business to keep track of its cash flow. It can happen only if you have a system to keep track of the financial transactions of the business. You need to give special attention to your bookkeeping and accounting as it is a statutory requirement. Updated financial records also let you know about the financial state of your business.
Singaporean Taxes
Goods and Service Tax (GST)
GST of 7% is charged on the goods and services consumed in Singapore. If your estimated annual turnover is expected to exceed SGD $1 million, you will need to register for GST. You need to collect GST from your customers and file it with IRAS.
Corporate Income Tax
One of the attractions behind registering a business in Singapore is its low tax rates. Singaporean corporate tax is affordable and maxes out at 17%. However, you may find calculating tax for e-commerce businesses a bit complex.
Singapore has adopted territorial taxation. Income accrued in or derived from Singapore, or received in Singapore from outside of Singapore is taxed. In this case, you will need an expert assistance. The e-commerce business is a borderless affair. However, it still has to follow the rules and regulations professed by the Singaporean regulating authorities.
Registering an e-commerce business in Singapore is not much different than staring any other business. The process for it remains the same. They differ in their business activities.
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