Report Topics:
1:- General Information
2:- Cooling-off Period
3:- Pyramid Schemes
4:- Multi-Level Marketing
5:- Prohibition on Products
6:- Credit Restrictions Country
7:- Money Collections
8:- Licenses
9:- Status of Direct Sellers
10:- Earnings Claims
11:- Taxes and Fees
12:- Social Security
13:- Others
General Information
selling in Singapore is governed by the Multi-level Marketing and Pyramid Selling (Prohibition) Act (Chapter 190) and the Multi-level Marketing and Pyramid Selling (Excluded Schemes and Arrangements) Order 2000.
The Consumer Protection (Fair Trading) Act (CPFTA) came into effect 1 March 2004.
Cooling-off Period
The DSA of Singapore has voluntarily adopted a seven (7) day cooling-off period since 1992. The following clause is included in the sales contract or order form of its member companies:
In line with the cooling off policy of the Direct Selling Association of Singapore, this contract / order may be cancelled within seven days (excluding Saturdays, Sundays and all public holidays) in writing and receive a full refund of their money (subject to reasonable charges for, among other things, the goods and services supplied related to the order or the contract).
To avoid possible abuse of this clause by the consumer, members of the DSA have been advised against delivering goods to the customer during the effective period of the clause. Any customer requesting delivery of the goods during this period would be advised of forfeiture of the right to cancel the contract of order.
Under the CPFTA, consumers are only entitled to a 5-day cooling-off period, excluding Saturdays, Sundays and Public Holidays.
Pyramid Schemes
The applicable law is the Multi-level Marketing and Pyramid Selling (Prohibition) Act 1973 which prohibits multi-level marketing or pyramid selling schemes or arrangements in relation to the distribution and sale of all goods, services, rights or other property. The incorporation or registration of companies which propose to promote multi-level marketing schemes or pyramid selling schemes is also prohibited.
Pursuant to the Multi-Level Marketing & Pyramid Selling (Prohibition) (Amendment) Act, multi-level marketing (MLM) and pyramid selling is, as a general rule, prohibited in Singapore.
However, the Multi-Level Marketing & Pyramid Selling (Excluded Schemes and Arrangements) (Amendment) Order 2001, which came into effect from Jan 1, 2002, provides that MLM schemes or arrangements that satisfy certain conditions are permitted in Singapore.
Please refer to MTI (Ministry of Trade & Industry) website: http://www.mti.gov.sg for full text of the Multi-Level Marketing & Pyramid Selling (Excluded Schemes & Arrangements / order).
Multi-Level Marketing
See previous section.
Prohibition on Products
There are some prohibitions on certain classes of products. Various laws make the sale, distribution or possession of such products illegal.
Credit Restrictions Country
This aspect also deals with the law on sale of goods.
Generally, ‘credit’ is given an extended meaning to cover not only its conventional sense of cash loans but also indebtedness incurred in the form of sale of goods on credit or hire purchase or conditional sale. The law of chattel security in Singapore consists of both case law with statutory modifications and statutory law. These include the law of pledge and law of chattel mortgage, the law of hire purchase and conditional sale, and the floating charge which only applies to incorporated traders.
Legislative techniques and policies here turn, inter alia, on the formal requisites for the transaction , the disposition of the goods, the rights of the seller and third parties, repossession of goods and the unpaid seller’s rights.
Related to the issue of credit is the issue of transfer of ownership of the goods. Under a hire purchase agreement, a hirer cannot vest a good title in a third party. Under a credit sale or conditional sale, a disposition to a third party can confer a good title. But unlike hire purchase, ownership of goods passes to the purchaser immediately. So the essential feature of sale on credit terms is that the seller permits the buyer to have possession of the goods before the price is paid in full. The Sale of Goods Act provides that ‘delivery of the goods and payment of the price are concurrent conditions … unless otherwise agreed’. Hence, a seller can grant credit on whatever conditions he pleased. Thus, if there are no conditions and where the purchaser defaults, the seller depends really on his assessment of the buyer’s honesty and credit-worthiness. The security position of the seller is to be considered in the light of three problematical areas:
- resale or pledge by buyer;
- buyer defaulting on payment;
- buyer’s bankruptcy.
One not often practised method is to assess the financial standing of the buyer from his respective banks.
Money Collections
No legislation.
Licenses
There is no law or legislation requiring a direct salesperson to register with the authorities.
However, under the Environmental Public Health Act, the operation of a food establishment requires a license from the Commissioner of Public Health. Further, hawkers of food or goods of any kind, operating from stalls and itinerant hawkers (ie, any person who, with or without a vehicle, goes from place to place or house to house carrying for sale or exposing for sale any food or goods of any kind) must first obtain a license from the Commissioner.
Companies selling health supplements, Chinese proprietary medicine and cosmetic products are advised to follow guidelines laid out by the Health Sciences Authority of Singapore.
Status of Direct Sellers
They can be classified as independent contractors if the contract spells out as such and, in practice, they are treated as such, ie, if there is no direct supervision. However, in as far as their liability vis-à-vis the customer is concerned, they are, unless known to the buyer, agents of the company. The company will be liable to the customer and any consequent liability of the company can be indemnified by the agents through third party proceedings.
Earnings Claims
No legislation.
Sales people pay their own Income Tax, through the basis of disclosure. Tax on income is based on residence. As for companies, including those involved in direct selling,
the prevailing corporate tax rate applies.
Social Security
No information.
The WFDSA International Guide to Direct Selling Legislation is a guide and is not exhaustive either in terms of subjects presented or for all areas of concern to direct selling companies. It is intended to cover general areas of concern. The Guide is not a substitute for legal counsel but only intended to alert you to the general nature of laws and regulations affecting the direct selling industry in a particular country. Consequently, before beginning an operation in any foreign country, it is strongly recommended that competent legal counsel be consulted. While every effort has been made to insure that the information contained in this Guide is accurate, the variety of sources used makes absolute verification difficult. Further, laws and regulations also can change from time to time without notice. Therefore, the WFDSA cannot be held liable for the information included in this publication.