How to Set Up an E-commerce Business in Singapore
Due to the increasing costs of running a physical business, many entrepreneurs are now turning to e-commerce. Even with all the benefits such a move affords your business, you still have to establish a base of operations. Singapore stands out because it is one of the fastest-growing economies in Asia, giving your business some geographic advantages due to its proximity to China and the rest of the Asian Market. Below, we will look at some tips to help you establish an e-commerce business in Singapore.
Research
Research is very important when starting any type of business. It helps you identify potential opportunities and tells you if there is a large enough market for your products and services. Your research should shed light on the type of products you will be selling, who your ideal buyers will be, where you will obtain products and who your competitors are, and what competitive advantage you have over them.
The insights you gain from your market research should help you come up with a business plan to help bring your ideas, goals, objectives, and thoughts together.
Funding
A huge advantage that Singapore has over other countries is that there are lots of funding options for startups. These include tax incentives, financing programs, venture capital, cash grant, and business-incubation programs. E-commerce businesses can follow the traditional route of applying for loans, seeking investors, or asking for government funding because the Singaporean government is very keen on finding new businesses.
Business Structure
There are three main business structures e-commerce entrepreneurs should consider. These include establishing a private limited company, sole proprietorship, or a limited liability partnership. Do note that the last two options are only available to permanent residents, Singapore citizens, and Entrepass holders.
If you already have a business but just want to incorporate it in Singapore, then you should consider a branch office or subsidiary company. Both of these let you avoid the complexities of going with the other options mentioned above.
Incorporation
Before you can begin operations, you need to incorporate your business. For this, you will need a business name, the names of the directors and partners, depending on your business’ structure, share capital, a registered address for your documents and correspondents, a secretary, and an auditor (appointed three months after beginning operation or if your business is not exempt from audits).
Your choice of business structure will determine what you need during this process, as well as how you pay taxes, your liability, and the ability to get funding. A private limited company seems like the better option as it affords you limited liability, legal entry status, perpetual succession, credibility, and tax incentives.
Tax Compliance
All companies incorporated in Singapore must pay taxes as stipulated by the Company Regulator ACRA and The Inland Revenue Authority of Singapore. It is also important to remember that these taxes are paid whether the company is active or not. Tax returns are reported three months after the end of the financial year, which ends on December 31.
If you do not reside in Singapore, it is important to ensure the reporting deadlines are met to avoid penalties and fines for not doing so. This can be easily done by hiring the services of s Singapore employer of record (EOR). In addition to ensuring tax deadlines are kept, a Singapore employer of record like New Horizons Global Partners, who you can get in touch with at nhglobalpartners.com, does a lot more for your business, including ensuring labor laws are adhered to, managing monthly payroll, and being responsible for all employee liability in Singapore so you do not have to worry about this. New Horizons also handles all HR issues like termination, contract renewals, and annual leave management, so you can focus on running your business.
Establishing Your Infrastructure
To run an e-commerce business, you will need the necessary supporting infrastructure. This infrastructure can include staff (which the Singapore employer of record can take care of for you), IT systems, facilities, and the necessary logistics to deliver your products. A good starting point includes:
Website development – Here, you will need a domain name, a web hosting service, and the accrual design and development of your website. Luckily, there are lots of website builders to help you get a website up and running quickly
Marketing and advertising – Both of these will help you bring customers to the website and help you sell more. Remember to customize your marketing and advertising strategies for the Singaporean market if that will be your primary market.
IT systems – These will help you fulfill customer orders as well as deal with any customer support issues.
Fulfillment – Fulfillment is just the way you get the products to the customer. Because you will be running an online business, you will need a partner to help you ship your products to your customers.
Finance and Bookkeeping
Although starting an e-commerce business in Singapore is very lucrative and affords you some advantages, you still have to deal with the actual starting and running of the business. There is a lot more to do, but the tips above provide you with a great place to start.
