Setting Up a Dropshipping Business in Singapore

Thinking of starting a dropshipping business in Singapore? This may be the right time to put your plan into action as we bring to you a small but mighty nation that offers world-class digital infrastructure, a savvy consumer base, and an ideal business environment for e-commerce. Dive into this comprehensive guide to learn how to launch, grow, and scale your dropshipping venture in 2025.

Key Takeaways

• Minimal Financial Risk, Maximum Flexibility: Launch with low up-front cost, operate from anywhere.
• Strict Compliance Required: Register your business, charge GST as needed, and follow consumer protection laws.
• Execution is Everything: Choose a niche wisely, vet suppliers, build an SEO-optimised storefront, and market smartly.

What is Dropshipping and How Does it Work?

Dropshipping is a popular e-commerce fulfillment model that lets online store owners sell products without holding inventory.

Here’s how it works: when a customer places an order, the retailer forwards the order to a third-party supplier, who then ships the product directly to the customer. This hands-off approach means sellers do not need to worry about warehouse space, packaging, or shipping logistics—they can focus on marketing, customer support, and growing their business.

Thanks to its low startup costs and minimal risk, dropshipping is ideal for aspiring entrepreneurs who want to test product ideas or explore online business opportunities without the burden of unsold stock.

Another major benefit of the dropshipping model is location independence. You can run a profitable online store from anywhere in the world, as long as you have a stable internet connection. While the dropshipping business is booming globally, this guide highlights Singapore as a top destination for this fast-growing e-commerce model.

Why Choose Singapore?

• High internet penetration (As per World Bank, 94.3% of internet users in the country)
• A mobile-first, tech-savvy consumer base—70% of Gen Z shop via social media.
• Efficient delivery networks and a strong legal framework.

Is Dropshipping Legal in Singapore?

Yes, dropshipping is completely legal in Singapore—but operating within the legal framework is non-negotiable. Singapore has a well-regulated business environment designed to support entrepreneurship while protecting consumers.

To legally run a dropshipping business, you must follow certain regulatory, tax, and operational guidelines. Here’s a breakdown of what’s required:

1. Incorporate Your Business With ACRA

   All dropshipping businesses—whether run by locals or foreigners—must be registered with ACRA (Accounting and Corporate Regulatory Authority). This process includes:

   • Choosing a company name
   • Appointing at least one director (must be a Singapore resident or permanent resident)
   • Assigning shareholders and defining share capital
   • Registering a business address (can be a virtual office or coworking space)
   • Maintaining annual filings and corporate governance documents

   You can register your business as a Private Limited Company, which is the most common structure for e-commerce entrepreneurs due to its liability protection and credibility.

   Foreigners must appoint a local nominee director or use a local incorporation partner like InCorp.

2. Tax Compliance and GST

   Singapore offers one of the most business-friendly tax regimes globally, but you’re expected to comply fully. For dropshipping businesses, here are key tax considerations:

   • Corporate Tax: A flat 17%, with tax exemptions for startups (first S$100,000 of income may be tax-free).
   • Goods and Services Tax (GST):
     • Currently, it is 9% in Singapore and GST-registered businesses must charge this on all sales unless exempt or zero-rated.
     • Mandatory registration if your annual turnover exceeds S$1 million.
     • GST applies to locally sold goods, not typically to overseas sales. However, dropshipping businesses targeting the local Singapore market must comply.
   • Customs & Duties:
     • If goods enter Singapore as part of your operations, import GST and duties may apply.
     • Make sure your suppliers are aware of this, or consider Delivery Duty Paid (DDP) shipping options.

   Use IRAS’s online tools to determine your GST obligations and consider consulting a tax advisor for custom guidance.

3. Consumer Protection and E-Commerce Laws

   Singapore enforces strict consumer protection laws that apply to all e-commerce businesses, including dropshippers. These include:

   • Consumer Protection (Fair Trading) Act (CPFTA): Prohibits unfair practices such as false advertising, bait-and-switch tactics, or misleading claims.
   • Sale of Goods Act & Lemon Law: Requires goods to match descriptions, be of satisfactory quality, and function as advertised.
   • Personal Data Protection Act (PDPA): If you collect customer information (e.g., email, phone), you must comply with Singapore’s data privacy laws.

   Even if your supplier is overseas, you are accountable for product quality, return or refund policies, and customer service.

4. Optional Licences (For Restricted Products)

   Depending on your chosen niche, you may require sector-specific permits or licenses. For example:

   • Health Sciences Authority (HSA): If you sell health supplements, cosmetics, or medical devices.
   • Infocomm Media Development Authority (IMDA): For importing electronics like mobile phones or wireless devices.
   • Enterprise Singapore or NEA: For food-related products or eco-regulated items.

   Always research product regulations in advance, especially if your store features high-risk or regulated categories.

Singapore E-Commerce Market Insights

Singapore’s e-commerce sector is experiencing significant growth, with projections indicating it will hit S$33.3 billion (US$24.8 billion) by 2028, according to market intelligence firm GlobalData. The market is expected to maintain a compound annual growth rate (CAGR) of 8.9% from 2024 to 2028, building on an already strong foundation.

Strong Performance in Recent Years

As per GlobalData, between 2020 and 2023, Singapore’s e-commerce industry grew at a CAGR of 25.3%, reaching S$21.2 billion (US$15.8 billion) in 2023. This growth trajectory is set to continue into 2024, with an anticipated 11.7% year-on-year increase, pushing the market value to S$23.7 billion (US$17.6 billion).

Drivers Behind the Growth

Experts at GlobalData believe the following factors contribute to this remarkable growth:

• Advanced digital infrastructure enables widespread access to fast internet, supporting seamless online transactions.
• A growing base of digitally native consumers is fueling the demand for e-commerce across categories.
• Major online events such as Black Friday and Cyber Monday continue to boost seasonal shopping volumes.

Expansion of Online Offerings

The appeal of e-commerce has extended beyond traditional product categories. In November 2024, Deliveroo unveiled a new feature called Deliveroo Shopping within its app. This service allows users in Singapore to purchase a range of non-food items, including:

• Beauty and personal care
• Baby care products
• Electronics
• Floral arrangements
• Health and pharmacy essentials

Deliveroo is encouraging adoption by offering discounts and a flat S$1 delivery fee, positioning itself to meet the growing demand for one-stop online shopping solutions.

Payment Trends: Flexible Options Are Key

Payment cards continue to dominate Singapore’s e-commerce scene, thanks to benefits like:

• Interest-free instalment plans
• Reward points and cashback
• Exclusive merchant discounts

But alternative payment methods are catching up fast. Consumers are increasingly using Apple Pay, PayPal, and Google Pay. There’s also a noticeable uptick in Buy Now, Pay Later (BNPL) solutions. Platforms like Hoolah and Atome are offering interest-free split payments. Notably, Atome partnered with Amazon in May 2023, giving shoppers a pay-in-three, zero-interest option at checkout.

Outlook for the Future

With its blend of tech-savvy consumers, cutting-edge infrastructure, and payment innovation, Singapore is set to remain a regional leader in digital commerce. According to GlobalData’s forecast, the sector’s solid fundamentals and forward-thinking innovations will keep it on a robust upward trajectory through 2028.

As new platforms expand services, and fintech continues to reshape the checkout experience, e-commerce in Singapore will not just grow—it will evolve. Whether you are a brand looking to enter the market, or a shopper loving the online deals, one thing is clear: Singapore’s e-commerce ecosystem is only getting smarter, faster, and bigger.

Pros and Cons of Dropshipping in Singapore

Advantages of Dropshipping in Singapore

1. Low Startup Cost – no inventory risk.
2. Location Flexibility – operate from anywhere.
3. Scalability – easier to add products and markets.
4. High Consumer Demand – e-commerce booming, especially mobile and social commerce.

Challenges of Dropshipping in Singapore

• Tight Margins – reseller costs can chip profits.
• Supplier Dependence – product quality and shipping are out of your hands.
• Complex Logistics – managing multi-supplier shipping costs and timelines.
• High Competition – the need for a standout branding and marketing strategy.

How to Set Up Your Dropshipping Business

Step 1: Incorporate Your Company

• Register with ACRA.
• Choose the company name, appoint directors/shareholders, and obtain a local address.
• Register for GST if needed.

Step 2: Pick a Niche

• Focus on demand-driven niches like electronics, personal care, or sustainable products.
• Use Google Trends, social platforms, and Keyword Planner for research.
• Avoid heavily saturated or legally restricted markets.

Step 3: Choose Reliable Suppliers

• Source via CJ Dropshipping, AliExpress, Spocket, and HyperSKU for convenience.
• Prefer local or APAC warehouses for faster delivery.
• Vet suppliers: request samples, read reviews, and check return terms.

Step 4: Build a Storefront

• Use Shopify (with Oberlo or DSers), WooCommerce, or BigCommerce.
• Incorporate SEO key elements:
  • Keyword-rich but natural titles and product descriptions.
  • Mobile-optimised design, fast loading, clean navigation.
• Include essential pages: Home, About, Contact, FAQ, Shipping & Returns, Privacy Policy.

Step 5: Payment and Shipping Setup

• Support e-wallets & local gateways: PayNow, GrabPay, and credit/debit cards.
• Provide convenient options and offers like:
  • Free shipping above a certain amount.
  • Tiered delivery: either standard or express.
  • Couriers like SingPost Speedpost, UrbanFox, or supplier-integrated logistics.

Step 6: Marketing Strategies That Work

1. SEO & Content Marketing – optimise blog posts and product pages for search.
2. Social Media & Social Commerce – use Instagram Shops, TikTok, and Facebook Live.
3. Email Campaigns – automation for welcome flows, abandoned carts, and promotions.
4. Influencer Collaborations – 30–70% of Gen Z buy via influencer content.
5. Paid Ads – Facebook/Instagram Ads, Google Shopping, dynamic retargeting.
6. Referral & Loyalty Programs – reward repeat business and referrals.

Step 7: Enhance Customer Experience

• Offer multi-channel support through chat, email, and WhatsApp.
• Create a clear returns policy and automate where you can.
• Set SLAs for response times (for example: complaint resolution within 48 hours).
• Outsource to virtual assistants when scaling.
• Build loyalty through VIP programs, early bird access, and bundle offers.

Step 8: Scaling Smartly

• Automate Operations: Plugins like DSers, AutoDS, or Zapier integrations.
• Add Product Lines: Consider high-margin, evergreen items.
• Expand Markets: Address SEA neighbors with cross-border shipping.
• Diversify Marketing: Launch affiliate programs and explore Pinterest and YouTube.
• Analyse Data: Use Google Analytics, heatmaps, and A/B testing.

How Can InCorp Help You Set Up a Dropshipping Business in Singapore?

Building a professional and user-friendly online store, along with a dropshipping business, is vital for attracting and keeping customers engaged. It starts from selecting a name and structure for your business to completing post-incorporation procedures and compliance to setting up accounting and finance.

The list is extensive when it comes to ensuring a successful dropshipping business is ready to take-off. Fortunately, you do not have to do it all alone. At InCorp, we help to streamline your investment into the Singapore market with our expert handling of ACRA registration, compliance, and more.

About the Author

InCorp Content Team

InCorp's content team includes talented copywriters from our regional group and globally. We contribute informative, thought leadership, and market-trending articles to guide aspiring business entrepreneurs to a higher level across the Asia-Pacific region.

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