How to start selling goods via online shop

Since January 1, 2017, registration as an individual entrepreneur has been transferred to the notification procedure, according to which, in order to register as an individual entrepreneur, an individual submits to the state revenue authority a notification of the beginning of activity as an individual entrepreneur.

Notification of the beginning of activity as an individual entrepreneur can be sent in 2 ways:

- electronic - through the Electronic Licensing portal of the Republic of Kazakhstan e-license;

- it is possible to submit notifications through the mobile application of second-tier banks, while the IP registration service is carried out through the state information system e-license.

For state registration as a joint individual enterprise, the authorized person of joint individual entrepreneurship, in accordance with paragraph 1 of Article 36 of the Entrepreneurial Code, submits directly to the state revenue authority or through the state information system of permits and notifications a notification in the form approved by the authorized body in the field of permits and notifications, as well as a power of attorney signed on behalf of all participants in joint entrepreneurship.

According to paragraph 3 of Article 36 of the Entrepreneurial Code, the state revenue authority, within one working day from the date of submission of the necessary documents, performs state registration of joint individual entrepreneurship.

If the applicant has not reached the age of majority, the consent of legal representatives is attached to the notification, and in the absence of such consent - a copy of the certificate of marriage (matrimony) or a decision of the guardianship and guardianship authority or a court decision declaring the minor fully capable.

The reclamation of other documents is prohibited.

The state revenue body, within one working day from the date of submission of the specified documents by an individual, performs state registration of an individual entrepreneur (joint individual entrepreneurship).

We draw attention to the fact that in addition to citizens of the Republic of Kazakhstan and Kandases, citizens of the Russian Federation, the Kyrgyz Republic, the Republic of Belarus, the Republic of Tajikistan, the Republic of Armenia permanently residing in the territory of the Republic of Kazakhstan have the right to carry out individual entrepreneurship.

At the same time, persons included in the list of organizations and persons associated with the financing of terrorism and extremism, in accordance with the legislation of the Republic of Kazakhstan, are not entitled to submit a notification of the beginning of activity as an individual entrepreneur.

Thus, when submitting a notification of the start of activity as an individual entrepreneur, there is an IIN check.

E-commerce involves activities related to selling of goods via online shop or online platform.

Main stages:

1. Draw up a business plan;
2. Attract investments and find initial capital;
3. Design a website for your online shop. Describe your requirements to the shop, select prototypes and apply to a web-studio after familiarization with its pricelist and alignment with budget;
4. Register as an individual entrepreneur or register a legal entity;
5. Notify a tax authority on commencement of activities in the field of e-commerce;
6. Think through logistics, i.e. acquisition of goods, their storage and delivery;
7. Hire personnel and organize their work;
8. Carry out activities to promote your online shop (both online and offline);
9. Always keep consumer rights and seller liabilities in mind.

We won`t provide a detailed information on business plan, initial capital, and on how to organize the work of online shop as those are essential requirements and business success depends on adequate planning and volume of investments.  

Ability to find a niche, select goods, which will attract people and establish logistics, is not an easy task requiring a comprehensive analysis and preparation.

Keep in mind that the following conditions should concurrently be observed when performing e-commerce activities:

• goods are sold to individuals;
• transactions are executed online;
• payment method should be cashless;
• availability of courier services, personal courier service or under contract with individuals delivering services on transportation of freights as well as courier and (or) postal activities.  

Consumers have a right for:

1. conclusion of contracts on acquisition of goods (execution of works, delivery of services);
2. awareness in the field of protection of consumer rights;
3. obtainment of information about goods (works, services) as well as about seller (producer, provider);
4. acquisition of safe goods (works, services);
5. free choice of goods (works, services);
6. adequate quality of goods (works, services);
7. exchange and return of goods both of inadequate and adequate quality;
8. reimbursement of losses (damage) to the full extent that were inflicted to life, health and (or) property due to deficiencies of goods (works, services);
9. obtainment of document from a seller (producer, provider) certifying the fact of acquisition of goods (execution of works, delivery of services);
10. submission of claim to initiator (organizer) of games regarding the quality of goods (works, services) provided (executed, delivered) as prize;
11. establishment of public consumers` associations;
12. refurbishment of moral harm;
13. protection of rights and legal interests;
14. execution of other rights stipulated by the Law and other legal acts of the Republic of Kazakhstan.

Within 14 days from the moment of acquisition of non-food good, if other term is not provided by a seller (producer), consumer has a right to exchange an acquired good at the place of acquisition or other places announced by a seller (producer) to a similar good of other size, form, model, colour, set as agreed by parties and perform review calculation if there is price difference.       

If a seller does not have a relevant good for exchange, a consumer has a right to return an acquired good to seller (producer) and obtain money back. 

In case if a document certifying the fact of acquisition of good was lost or not issued to a consumer than a good can be exchanged or returned, if a consumer will prove the fact of good acquisition from seller (producer).

A consumer to whom goods of improper quality have been sold, if their defects have not been agreed upon by the seller, has the right to demand them within the time limits established by law at his choice:

1. a commensurate reduction in the purchase price;
2. to eliminate defects of the goods free of charge;
3. compensation of its costs for elimination of defects of goods;
4. replacement of similar brands (models, articles) with the goods;
5. replacement of another brand (model, article) with the goods of the same type with a corresponding recalculation of the purchase price;
6. cancellation of the agreement and refund of the sum of money paid for the goods.

In the event that the seller of goods of inadequate quality is not its manufacturer, the requirements specified in subparagraphs 2), 4) and 5) may be imposed at the choice of the buyer to the seller or to the manufacturer;

The consumer shall be entitled to compensation for the damages caused regardless of the claim selected by him.

You can register a legal entity as a small or medium-sized business online. The electronic service, in addition to the registration of the LE, includes the possibility of opening a bank account and entering into a contract for compulsory insurance of employees.

Going to the service page, click on the "Order the service online" button.

1. In the first step, you need to specify the legal form and fill out the fields with the full and short name of your company in three languages – Kazakh, Russian and English.

Next, indicate the IIN of the manager, the number and date of the decision of the authorized body of the LE to appoint the head.

When specifying information about the founders, it is necessary to fill in the fields with their IIN / BIN, full name / name, as well as provide information about the amount of their contribution and its share in the authorized capital. Then it is necessary to indicate whether the LE will act according to the model charter and register as a VAT payer.

Next, indicate the legal address, contacts and code of the main type of economic activity and the approximate number of people employed.

At the end of the page, you can indicate whether you want to immediately open a bank account with this application and enter into an insurance contract. If you plan to do this yourself offline, do not tick this box.

2. The next step is to carefully check all the information entered for errors.

3. If you indicated on the first page that you will open a bank account online, then in the third step you will be required to complete all the information in order to complete this procedure.

Select one bank from the list (Alfa-Bank, Halyk Bank of Kazakhstan, Fortebank or Jýsan Bank), specify its branch and used currency (tenge, dollar, euro).

Attach the completed bank application form for opening an account, a sample of which can be downloaded immediately after selecting the STB. The application form is required.

Then you can attach documents from the following list, if available:

• Application for accession to the Agreement between the bank and the client;
• Charter;
• Samples of signatures;
• Extract from the register of holders of securities;
• Power of Attorney (in case of submitting from the trustee of the LE).

The application of these documents is desirable, but not necessary.

4. The next step is to fill out an application for an insurance contract.

Select an insurance company from the list:

• 'Freedom Finance Life' Life Insurance Company, JSC;
• 'State Annuity Company' Life Insurance Company, JSC;
• Halyk-Life, JSC.

Fill out a form with information about employees, including information about the annual payroll and make a note in the questionnaire on labor protection in your company. The annual payroll per employee must be no less than 12 minimum wage and no more than 120 minimum wage.

Indicate the date of commencement of the insurance period, attach a list of employees with the companys charter, and then tick off the clauses on acceptance of the insurance terms.

At this stage of filling the application of the composite service ends, and then the founders will be required to confirm it through the EDS. After this, the application is signed by the applicant himself and sent to the registering authority for approval.

The waiting time for processing an application is 2 business days. Also, note that the online registration of a legal entity is free, i.e. does not require payment of state duty.

After you have registered as an individual entrepreneur or legal entity, you need to notify a State Revenue Department at the place of location (tax authority) on registration as taxpayer performing certain types of activities. 

This can be done via online service available on e-Licensing Portal:

- Notification of the beginning or termination of activities as a taxpayer performing certain activities

Seller (producer) should ensure exchange and return of non-food goods of adequate quality, if it was not used, its market condition, application properties, security seals and stamps are intact, and also documents is provided certifying a fact of a good acquisition within 14 calendar days, if longer period is not provided by contract from the date of goods acquisition, except:

• pharmaceutical products and medical devices;
• underwear;
• legwear;
• animals and plants;
• goods sold based on metreage, namely fabrics out of fiber of all types, knitted and curtain fabric, artificial fur, carpeting items, nonwoven fabrics, ribbons, laces, tapes, cords, cables, linoleum, picture frames, film, oilcloth;
• mobile communication user equipment.

Also, as a seller you should:

• ensure the safety of the goods (work, services);
• ensure the free choice of goods (work, services);
• ensure the proper quality of the goods (work, services);
• ensure the exchange or return of the goods, whether of proper or improper quality; ● ensure the free choice of goods (work, services);
• ensure the proper quality of the goods (work, services);
• publish links on web-resources (electronic trading platform, online shop, information and advertising trading platform) with indication of information on major consumer properties of goods, name of seller, legal address and subscriber`s number registered at mobile communication operator of the RoK ;
• prior to conclusion of purchase/sale agreement, provide information to a customer in Kazakh and (or) Russian about good, its price, payment procedure, delivery conditions and price, guarantee period (if available);
• when selling goods based on sample and (or) description, you should provide a customer with good which correspond to sample and (or) description;
• have documents certifying the ownership right for goods, except for own-produced goods;
• compensate in full for losses (damage) caused to life, health and/or property of the consumer due to defects of goods (work, services).