13 December 2021
Singapore

The State of E-commerce in Singapore

Singapore has a national standard of e-commerce transaction. According to Jun Meng Heng, Director at ZICO Insights Law LLC,

“in order to start an e-commerce business, you have to know the rules, advertising, marketing, the products that can be sold, and protection. If you are thinking of setting up your own e-commerce platform, you should consider the platform terms and conditions as well as the privacy policy.”

Governing legislation/ framework

There is no single/omnibus legislation on E-commerce activities in Singapore. Applicable laws that would apply include those in regards to consumer protection, sale of goods and services, trade description and personal data protection.

In June 2020, Enterprise Singapore and the Singapore Standards Council set out the first national standard for E-commerce transactions, Technical Reference 76 (“TR 76”).

Regulatory authority

The Infocomm Media Development Authority regulates Singapore’s infocomm and media sectors.

Licensing & market entry requirements

Generally, there are no restrictions on the types of E-commerce entities that could be set up in Singapore.

Internet Content Providers (“ICPs”) in Singapore are regulated by an automatic class licence pursuant to the Broadcasting (Class Licence) Notification. ICPs must comply with the Internet Code of Practice.

An E-commerce entity may be subject to additional licensing if it engages in certain activities (i.e., e-retailing of second hand goods).

Foreign equity restrictions

A foreign entity is not prohibited from setting up a company in Singapore. However, certain restrictions apply to foreign direct investment in particular sectors (i.e., media and broadcasting).

Payment solutions, foreign exchange administration and merchant acquiring services

  • Payment solutions: Singapore’s mature E-commerce payment infrastructure has led to the availability of multiple forms (i.e., credit card, digital wallet, bank transfer) of payment solutions on E-commerce platforms.
  • Foreign exchange administration: Since 1978, all exchange controls in Singapore have been abolished. Accordingly, local currency may be used for E-commerce platforms based outside Singapore.
  • Merchant acquiring services: Providers of “merchant acquisition service” must be regulated under the Payment Services Act 2019 (“PSA”). The PSA defines “merchant acquisition service” to mean any service of accepting and processing a payment transaction for a merchant under a contract between the provider of the service and the merchant, which results in a transfer of money to the merchant pursuant to the payment transaction, regardless whether the provider of the service comes into possession of any money in respect of the payment transaction, in a case where – (a) the merchant carries on business in Singapore, or is incorporated, formed or registered in Singapore; or (b) the contract between the provider of the service and the merchant is entered into in Singapore.

Product liability

There is no single system of product liability law in Singapore.

Generally, the Sale of Goods Act (Cap. 393), Supply of Goods Act (Cap. 394), and Unfair Contract Terms Act (Cap. 396) work together by implying basic standard terms into contracts for the sale of goods – i.e., that goods are of satisfactory quality.

Consumers may also rely on the Consumer Protection (Fair Trading) Act (Cap. 52A), which protects consumers against unfair practices and gives consumers additional rights in respect of goods that do not conform to contract. Consumers will have a right of action against sellers that perform unfair practices (i.e., acts that deceive or mislead consumers).

Sector specific product liability laws include:

  • Food & Beverage: The Sale of Food Act (Cap. 283) sets out minimum standards to ensure that food for sale is safe and suitable for human consumption.
  • Medicines: The Health Products Act (Cap. 122D) regulates the manufacture, import, supply, presentation and advertisement of health products in Singapore. It comprises of standards for the formulation, composition, design specification, quality, safety, efficacy and presentation of health products.

Data protection

The Personal Data Protection Act 2012 (“PDPA”) regulates the collection, use and disclosure of personal data by organisations (including any individual, company, or body of persons, i.e., E-commerce websites).

E-commerce platforms are required to incorporate terms of the PDPA in their policies (i.e., user agreement / privacy policy). This includes, inter alia, that the organisation must:

  • obtain the prior consent of the individual before the collection, use of, and disclosure of the personal data;
  • use the personal data only for limited purposes of which the individual has been notified;
  • provide the individual access to and correct errors in his personal data;
  • protect personal data in its possession;
  • cease to retain personal data when no longer necessary; and
  • not transfer personal data outside of Singapore (except in accordance with the PDPA).

In addition, individuals may opt out of marketing messages addressed to their Singapore telephone number via the Do Not Call Registry.

Consumer protection

Pursuant to TR 76, e-marketplaces & e-retailers should ensure that relevant information relating to its organisation, its products and/or services, and the transaction is presented accurately.

Such information, inter alia, includes:

  • legal name, registration number and place of registration;
  • points of contact for any enquiry;
  • safety and health-related concerns;
  • guarantees and warranties, including the validity period of warranty;
  • payment policies and delivery options; and
  • after-sales services, refund policy, withdrawal and cancellation policy and returns and exchange policy.

Suppliers of controlled goods (as defined in the Consumer Protection (Safety Requirements) Regulations) registered with Enterprise Singapore must ensure that their goods are affixed with the SAFETY Mark before they are sold in Singapore.

For more information about e-commerce across ASEAN, download the comparative guide, ASEAN Insiders: Electronic Commerce in ASEAN.