SIC for my dropshipping business

[Kawaii Era]

Hello,
I registered a UK LTD for my dropshipping store. As a dropshipping online store, I don't have any physical store or warehouse in the UK. When I applied for the Shopify Payments, they disapproved me as my business has no physical presence in the UK. But shopify supports dropshipping.

The SIC codes I selected for my UK LTD are:

47710 (Retail sale of clothing in specialised stores)
47750 (Retail sale of cosmetic and toilet articles in specialised stores)

I think these selected SIC codes are not applicable for my business since it is dropshipping and it does not need any physical presence of warehouse and store.

Should I select these SIC codes for my dropshipping business?

47910 (Retail sale via mail order houses or via Internet)
47990 (Retail sale not in stores, stalls, or markets)

Can someone help me about it? It is my first time registering a UK LTD and business.

Thank you

 

[StevensOnln1]

SIC codes are just used to indicated what areas your company operates in for statistics, they won't have any effect on Shopify Payments. The reason they're declining you is that you have no physical presence in the UK, so either you need to get one or find another payment provider that accepts overseas businesses.

Either that, or set up a company in your own country and stop pretending to be in the UK.

 

[Kawaii Era]

SIC codes are just used to indicated what areas your company operates in for statistics, they won't have any effect on Shopify Payments. The reason they're declining you is that you have no physical presence in the UK, so either you need to get one or find another payment provider that accepts overseas businesses.

Either that, or set up a company in your own country and stop pretending to be in the UK.

I know many guys here who are not in the UK but has a UK LTD, using the Shopify Payments without even having any physical presence of them or their business in the UK. Like they just registered a UK LTD and applied for shopify payments and all done. Shopify didn't even ask them for any proof. Just 4 days ago, a friend of my friend got approved to use the shopify payments with his UK LTD.

 

[StevensOnln1]

How long have they been trading? Part of the issue could be if your company is new and has no trading history.

 

[Kawaii Era]

How long have they been trading? Part of the issue could be if your company is new and has no trading history.

shopify just lets the store admin use the shopify payments right after they send the documents...my friend just created his UK LTD a week ago and applied for shopify payments and it was activated instantly. He is saying me that there is a problem with the SIC codes in my LTD.

 

[Ozzy]

When I applied for the Shopify Payments, they disapproved me as my business has no physical presence in the UK.

They have given you the reason here, that you have no physical presence. Having said that, the SIC codes you have chosen are for businesses that operate out of a physical retail space, so it might be possible that the Shopify automation is looking at your SIC code and expecting you to have a physical shop.

The SIC codes you suggest are the correct ones for dropshipping so should be used anyway.

Try changing your SIC code (by filing a CS01) and try again, what's the worse that could happen?

 

[Paul Kelly ICHYB]

Why didn't you use your UK registered address?

 

[Newchodge]

I know many guys here who are not in the UK but has a UK LTD, using the Shopify Payments without even having any physical presence of them or their business in the UK. Like they just registered a UK LTD and applied for shopify payments and all done. Shopify didn't even ask them for any proof. Just 4 days ago, a friend of my friend got approved to use the shopify payments with his UK LTD.

Ask them how they did it?

 

[fisicx]

@Kawaii Era - change the SIC codes then try again. As already suggested you current codes indicate you have a retail premises. Not actually sure why you think you need a limited company to run a dropshipping business.

 

[Paul Kelly ICHYB]

Not actually sure why you think you need a limited company to run a dropshipping business.

They don't but it is that classic 'lets use Shopify for everything'. The need the UK company to get UK status and open up a payment provider!

 

[Kawaii Era]

@Kawaii Era - change the SIC codes then try again. As already suggested you current codes indicate you have a retail premises. Not actually sure why you think you need a limited company to run a dropshipping business.

yeah i will change the SIC codes and try again. And I need to form a LTD because shopify payments is not available here and I can't be a sole proprietor as I'm not any USA/UK resident. But I can get the shopify payments with a private limited company even if I live in the not eligible countries.

Also, stripe and paypal are not officially available here but I can get the business paypal and business stripe accounts using the LTD information. But I won't go for paypal and stripe because they suddenly hold the money without any reason as I know some guys losing 2/3k usd because paypal held their account even after they sent documents.

 

[fisicx]

But I won't go for paypal and stripe because they suddenly hold the money without any reason as I know some guys losing 2/3k usd because paypal held their account even after they sent documents.

Money is only ever withheld if breach the terms of PayPal or Stripe. If you do everything correctly you won’t have a problem.

Remember as well that the CH rules are changing. So you may need to verify your UK identity.

TBH, so many people are now doing as you have done that the market is flooded. And many in the UK are very wary of drop shippers

 

[Ozzy]

Remember as well that the CH rules are changing. So you may need to verify your UK identity.

* will need to verify your identity

 

[fisicx]

* will need to verify your identity

…. to stop people like @Kawaii Era doing what they are doing.

I’d put money on them using someone in the UK to set up the company on their behalf because they don’t meet the requirements themselves.

 

[Ozzy]

I’d put money on them using someone in the UK to set up the company on their behalf

Nominee officers was made illegal a few years ago, so having someone 'front' your company is not lawfully allowed in the UK any more.

 

[fisicx]

Nominee officers was made illegal a few years ago, so having someone 'front' your company is not lawfully allowed in the UK any more.

So there you have it @Kawaii Era. Your UK limited company is illegal. As are those of your fellow dropshippers. Expect them to be liquidated at some point.

I wonder if all those Chinese dropshippers with a UK business address are in the same situation?

 

[Ozzy]

Your UK limited company is illegal. As are those of your fellow dropshippers. Expect them to be liquidated at some point.

Easy tiger!

There is nothing wrong with an overseas person with an overseas address being a director and shareholder of a UK company, that is perfectly legal and perfectly fine. What is not legal and fine is having some in the UK pretend to be the director and owner of the business as a front. Nothing above implies that is happening.

So if @Kawaii Era is registered at Companies House correctly that is fine and perfectly Ok. It is also perfectly fine and legal to have a UK address through an address service provider who handles the post for them in the UK, such as open, scan and forward. So long as everything is run properly it's fine.

 

[Kawaii Era]

So there you have it @Kawaii Era. Your UK limited company is illegal. As are those of your fellow dropshippers. Expect them to be liquidated at some point.

I wonder if all those Chinese dropshippers with a UK business address are in the same situation?

Oh okay i see but everything was with my legal paperslike my legal id card, passport and other documents which were needed. let's see where it goes :/

 

[fisicx]

Oh okay i see but everything was with my legal paperslike my legal id card, passport and other documents which were needed. let's see where it goes :/

What about the UK address?

 

[Kawaii Era]

What about the UK address?

that UK address is rented

 

[fisicx]

that UK address is rented

In your name?

 

[Kawaii Era]

In your name?

i guess yes cause when it asked for where i want to setup my company, the agency who helped me to create the LTD gave me that address from brushfield, england.

 

[Ozzy]

i guess yes cause when it asked for where i want to setup my company, the agency who helped me to create the LTD gave me that address from brushfield, england.

Sounds like you’ve used one of the virtual address services I mentioned above, which is perfectly fine

 

[Kawaii Era]

Sounds like you’ve used one of the virtual address services I mentioned above, which is perfectly fine

yeah, the agency said it's a virtual address. good to know it's perfectly fine

 

[fisicx]

But only if you are resident in the UK.

The rules for someone living overseas are different. But they might be ok.

 

[Ozzy]

But only if you are resident in the UK.

The rules for someone living overseas are different. But they might be ok.

I am going to need a citation on this as I wasn't aware the rules would be different, and I have been working in the company formation and virtual address industry for nearly a quarter of a century.

 

[fisicx]

It’s probably me getting confused. It was this I was referring to:

Register as an overseas company

You must register as an overseas company in the UK to do business legally - find out about what you need to do

www.gov.uk

 

[Ozzy]

It’s probably me getting confused. It was this I was referring to:

Register as an overseas company

You must register as an overseas company in the UK to do business legally - find out about what you need to do

www.gov.uk

This is something completely different, nothing to do with registering a UK company.

The best way I can explain what you have linked to is where you register a company that is registered in another country (like a Germany head office for example) into the UK Companies House records so that people can search the UK register for details of your company in Germany and your UK sibsidiary. Not exactly like that but it's the just.

Nothing to do with UK-registered Limited Companies that just happen to have directors or owners living somewhere else in the world