Suppliers from Italy - Customers in Europe - Is it possible to set up the business in Singapore?

[stiffened]

Hi everyone,

I will be launching my e-commerce business soon. It's basically like a marketplace of Italian products (including food).

• Customers will be mainly in Italy and other parts of EU
• We also plan to offer our products globally (once we find the right logistics company)

My dilemma:

• My partner is Italian and he is based in Italy but we are facing challenges in registering the business. Since the business will be dealing with food, he is required to take a 120-hour course. Apparently this is a requirement. And causing so much delay for us to launch our business.
• I, on the other hand, am based in Singapore. So we're thinking of registering the business in Singapore.

Questions:

• Should we register in Italy or Singapore?
• If we decide to register in Singapore, Do we still need to register for taxes (IVA) in Italy?
• What's the best way to move forward with this so that we make sure we comply with all the rules and regulations.

Thanks!

 

[Sols]

Should we register in Italy or Singapore?

The company will very likely be considered resident on both Singapore and Italy for tax purposes, and be required to pay Italian tax on its earnings sourced in Italy. That doesn't mean just local sales in Italy, that means every sale which in some way can be attributed to Italy.

Since Italy isn't known for being tax-friendly, they will likely decide that 100% is sourced in Italy and then you have to argue in courts over which part was sold from Italy and which from Singapore.

Basically, do the 120-hour training course (or someone who has done it) and form a company in Italy. Having failed to do so will probably not exactly be in your favour if you're subject to court proceedings as the result of of tax fraud investigation.

If we decide to register in Singapore, Do we still need to register for taxes (IVA) in Italy?

Yes, since the company will be tax resident in Italy and because all sales in and into the EU are subject to EU VAT regulations.

What's the best way to move forward with this so that we make sure we comply with all the rules and regulations.

Speak with a good, reputable tax adviser who understands Italian and Singaporean law. Someone like Vistra, Grant Thornton, or BDO.

Maybe you can leverage your residence in Singapore to legitimately save on taxes by having a Singaporean holding company own the Italian company, for example. That's a discussion to be had with a tax adviser.

 

[stiffened]

Speak with a good, reputable tax adviser who understands Italian and Singaporean law. Someone like Vistra, Grant Thornton, or BDO.

Hi Sols,

Thanks so much for your advice. Really helps. And thanks for recommending those tax advisers. Spent my whole afternoon looking for people who have expertise in Italy and Singapore markets.