Starting An E-commerce Business: Don?T Know Where To Begin?
Posted by martin on January 11th, 2018
Starting an e-commerce business can be a daunting affair and most people will have an initial idea of the product or service they want to sell but will have no idea how to set the business up. A key initial question to ask yourself is where are you selling to and who are your customers. If you are intending to sell within one country, it would make sense to set up the company there. However, if you are selling across multiple countries such as the European Union, then it could be that there is an element of flexibility in where you choose to base your business and an offshore company formation set up may be of interest.
A common question that people often ask is whether an offshore company formation set up would better suit your needs and offer certain fiscal and tax benefits. Jurisdictions such as Cyprus or Malta are offshore but still conveniently within the European Union. Both countries also offer a lower base rate of taxation if set up correctly but importantly also adhere to European Union legislation such as the Parent-Subsidiary Directive, which allows for double taxation relief for the repatriation of dividends from a subsidiary in one member state to a parent company in another Member State. This can allow for several planning opportunities with regards taxation. However, a key point that a person thinking of setting up a business in another jurisdiction is to ensure that the effective management and control of the organisation is set up within the chosen country.
Malta company formation services or Cypriot set up costs as an example are also relatively cheap in comparison to other jurisdictions in the European Union. Both countries also have good legal frameworks in place, but Malta is favourable if you speak English as all legislation is in Maltese and in English, which is a national language. A lot of the tax laws and legal jargon related to Malta company formation services is also familiar English law.
Whilst the actual set up of an ecommerce business is often straightforward and can take a few days, it is worth remembering that most firms will need an abundance of documentation to comply with anti-money laundering legislation and this is now becoming standardised across many jurisdictions. The simpler the structure and shareholding should mean in theory that the paperwork needed to set up the company should be manageable. A lot of the items requested such as utility bills and identification should be relatively straightforward to obtain but items such as references from banks can often be more problematic and thus can slow the process down. It is at this initial stage if not managed properly that can frustrate immensely. It is worth ensuring that all the relevant paperwork needed for due diligence is also of a certain standard so that it can be used to open a bank account. There is nothing more painful than having to do the whole process twice and opening a bank account in any jurisdiction is nothing short of a nightmare these days.
Hopefully, the above will help with regards to starting an ecommerce business and with careful planning and the correct product or service to sell you should hopefully start to reap the rewards.
About The Author:
Turn Your Hobby Into A Business
Whether you want a full time income, or are just trying to supplement your income with a side hustle, now is your chance to turn your hobby into a business!