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How to Set Up an Internet Business Online

Published on March 31st, 2016 by in Blog

Starting an Internet business in Singapore requires a few steps to get started. One of the fastest growing markets, e-commerce allows you to sell goods across the world. If you choose to be a service provider, you’ll also be able to offer your services globally.

And, there is less overhead than starting a ground business.

Plan and Strategize Your Business

Market research will be needed to ensure that your goods or services are in demand. The planning process will change depending on your niche, but a few questions that need to be answered are:

  • What is the goal of your online business?
  • What goods or services will you offer?
  • How will you market your business?
  • How will you fund your business?

Incorporate Your Business

Once you have a plan in place and are confident that an Internet business is the right decision for you, it’s time to start the incorporation process. The business structure you choose is very important and will affect:

  • Taxes
  • Liability
  • Ability to raise capital

Many new startups prefer incorporating as a private limited company. Why? This structure allows for the utmost in benefits for the owner(s), including:

  • Tax incentives
  • Limited liability
  • Legal entity status
  • Perpetual succession

A private limited company must have fewer than 50 members. You’ll also enjoy an easy registration process that requires just two procedures and can be completed within 24 hours in most cases.

Incorporating can be done in several ways. You can talk to your local accountant to discuss your structure options and for help with incorporation. If you already know what structure you prefer and you want to register online, you can.

Online Incorporation

Singapore’s Accounting and Corporate Regulatory Authority (ACRA) suggests registering through BizFile. This is the ACRA’s own filing and retrieval system where all new filings will be done completely online.

Professional firms can also submit your online application on your behalf. These firms include:

  • Accountants
  • Lawyers
  • Chartered secretaries

The choice of how to register is up to you.

You will be responsible for fees related to your company name ($15) and incorporation fees ($300) for a private company. There are further fees that you need to be aware of and will want to discuss with your accountant, such as annual filing fees.

At this time, you’ll want to do the following:

  • Open a corporate bank account.
  • Apply for any required business licenses.

Licensing for E-Retailers

All Internet content is considered broadcast media content in Singapore. This means that your online business may fall within the legal requirements of the Singapore Broadcasting Authority Act.

The act states that the following broadcasting services must be licensed:

  • Internet Service Providers
  • Internet Content Providers

Class licensees are certain persons that are automatically licensed and will not need to submit a separate license. This would include owners of an e-commerce website.

If you fall under the classification of an Internet Content Provider, you will need to register your business with the Singapore Broadcasting Agency (SBA). You’ll need to register with the SBA if your online business:

  • Promotes political causes
  • Promotes religious causes
  • Sells online newspapers

Obtaining the proper licensing is required before you begin operations. If you’re unsure of what licenses are needed, a lawyer or accountant will be able to discuss these requirements with you.

Adhere to Internet Content Regulations

The Internet Code of Practice must be followed for all class licensees and e-merchants. What content is not allowed to be posted? Content that is objectionable in relation to:

  • Public morality
  • Public security
  • Public interest

This is a grey area in terms of what is and isn’t acceptable. If Internet Content Providers do not live in Singapore but make their content available to readers in the country, they will not fall under these regulations.

In effect, content that resides on servers outside of the country will not be covered by the SBA.

Only local content providers will be subject to the Internet Code of Practice. For residents of the country that have servers located outside of Singapore, you’ll want to err on the side of caution to ensure that you’re not breaking any local laws and regulations.

Online Business Regulations

There are several business regulations that apply to online businesses. These regulations correlate to the products or services that you offer. Regulations apply to the following:

  • Online Gambling: Any company that offers online gambling may fall under the regulation of the Betting Act. There is also the possibility of being regulated under the Common Gaming Houses Act.
  • Financial Services and Products: Existing regulations may apply to financial services and products. If securities are offered, you’ll need to comply with the Companies Act.
  • E-retailing Second Hand Goods: The Second Hand Dealers Act applies to any merchant that sells secondhand goods. As such, you must apply for a license with the Deputy Commissioner of Police. This is an attempt to thwart the sale of stolen goods.
  • Web Advertising: The Singapore Code of Advertising Practice will be applied to ensure that advertising of certain products does not go against regulations and restrictions. Products that fall under the practice include: alcohol, medicine and several other goods.

Online business owners must also remain diligent to not infringe on a company’s trademarks or copyright.

Infrastructure and Financing

A business’s online infrastructure must be setup at this time. Key items that need to be attended to include:

  • Web design and development
  • Domain name registration
  • Website hosting
  • Web marketing and advertising
  • Customer support and product fulfillment
  • Bookkeeping and financing
  • Security and automation
  • E-commerce solutions

Any financial-related needs should be discussed at this time. Funding to enhance or begin business operations can be sought. Discussing your tax-related options and concerns with a local accountant is a financial requirement.

Online sales and business activity can have complex tax issues arise if strict rules are not followed. The source of taxation is the biggest concern because the merchant may not be selling goods from within Singapore, or goods or services to a resident of Singapore.

Tax residency concerns and income classification should also be discussed with an accountant at this time.

 
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