Ekta Porwal wrote: ↑Sat, 23 May 2020 1:37 pm
Hi
My Background: I am living in Singapore from past 2 years and holding a DP Pass. My husband is currently working in an organisation and holding an EP pass.
Query: I am planning to start a E-Commerce business (by selling online) as an Individual and not as PVT limited. I am planning to sell items directly to US but my account will be in Singapore. Here are my queries:
- Do I need to obtain some-kind of permit? If yes, how can I apply for it.
- What type of Account I will need to open (for e.g Saving or Current) ? As, it will keep money received from overseas through Paypal (or some other portal).
- How will I pay (and calculate) tax to Singapore ? Please suggest some Tax guidelines
I am newbie. I am looking for the expert advice so that I can start something of my own.
Thanks in advance.
Here are some facts to consider.
- If your business has the following characteristics:
- You do not sell any products or services in Singapore
- Your company is incorporated or registered in a country other than Singapore
- Your website(s) are hosted somewhere other than Singapore
- You do not ship any of your products and services from Singapore
- Your payment processor will deposit all your funds into a bank account styled with your personal name
then you will not need any sort of registration or company in Singapore. For example, your online website is hosted by a US company. You use a US payment processor to take your credit card orders. Your orders are directly drop shipped to your customers from a company in China that you have engaged to perform this service. You use online payment services located in India to pay your suppliers and shippers. Your payment processor sends you a check in your personal name (or does a direct deposit).
- If you need a Singapore bank account in anything other than your own name, then you must register a business.
- If you are shipping your products from Singapore, then you must register a business
- If you are receiving your products in Singapore, you must register a business.
- When you sell as an individual, you are still running a business, in the form of a sole proprietorship. This is true anywhere in the civilized world. In Singapore, if you operate solely using your own name, then you can run as an unregistered sole proprietorship, for example, "John Smith". But, if you have any other words in your business name, for example, "John Smith Trading", then you must register your sole proprietorship with the ACRA.
The bottom line is this: If every one of your activities surrounding your business is being conducted outside of Singapore, then you have no registration requirements whatsoever.
But, if any of your business activities is occuring inside Singapore, then you must register a business.
And since you are on a DP, you cannot work for a business in Singapore unless you have a work permit or an LOC. Therefore, you must apply for a work permit to operate your business. There are many threads in the Careers and Business forums covering this topic. You will find that it is not particularly easy to do, especially if you want to do it as a sole proprietor.
With respect to taxation, you will report your earnings on your personal Singapore income tax return. If your business is completely offshore from Singapore, you will report as an unregistered sole proprietorship. If your business is located in Singapore, then you will report your earnings as a registered sole proprietorship.
In my view, your best course of action is to sell through another online service such as eBay, Amazon, and the like. They collect the money. You must arrange to have your products drop shipped out of country. This is a challenge in itself but there are plenty of fulfillment centers that will accept quantities of your product and then break them up for individual delivery.
If your business is not operating in Singapore, then you will need to be aware of the laws and regulations in the countries that are handling your drop shipping.
Good luck.
