Hi there, I am new to this forum so greetings to all.
I wanted to start escrow service in my country as internet purchasing and selling is increasing day by day over. To give an idea of what escrow service is here is a brief concept.
Escrow service is a service provided by a website that allows the buyer ans seller to have a safe transaction over the internet. The buyer when meets the seller they ultimately decide upon a price and to ensure that buyer is able to pay that price the seller will ask him to deposit the funds at our website where a notification will be sent to the seller that buyer has deposited the funds. Once when the buyer receives the item and he informs us that he is satisfeid with the purchase then we release the money to the sellers bank account. Such a service is known as escrow service.
Following are few questions: However i wanted to know what are the legal implications to this website?
are there any international rules that apply on such service?
how are the legal terms and conditions set?
can i start this service in my country as an individual?
is there any tax on such websites?
[FONT=verdana]Welcome to the forum. I’ll try to answer your questions:
However i wanted to know what are the legal implications to this website?
Quite substantial. You will be holding money on behalf of other people. I don’t know what country you are in, but the chances are that there will be a strict regulatory scheme in force for the service you are proposing. Take professional advice before you commit yourself.
are there any international rules that apply on such service?
Not sure what you mean by “international” rules. The rules in your country are the ones that will apply.
how are the legal terms and conditions set?
You can’t expect a useful answer to that question from a forum post. It’s essential that you take proper legal advice.
can i start this service in my country as an individual?
As we don’t know what country you are in, we can’t advise on whether you can start this service in your country. As for whether you can do it as an individual, I can only say that, as an individual, you are probably bound by similar laws as a corporation.
is there any tax on such websites?
There’s no tax to pay on the website. You will pay tax on the profits of your business. How much you will pay will depend on the tax regime in your country. Again, we can’t give you any firm advice without knowing what country you are in.
[FONT=verdana]No, I’m sorry, I can’t give you any answers specific to Pakistan. Only someone who is knowledgeable on Pakistani law can do that.
But it’s safe to assume that you will be subject to strict regulation in Pakistan, just as you would in most other countries. After all, you are proposing to hold money on behalf of other people. In that respect, you will be acting similarly to a bank (albeit on a much smaller scale). So it’s likely that you will be subject to the same controls and regulatory regime as a bank, and these could be considerable.
Leaving aside the legal aspects, I wonder how you can make a business case for your proposed service. Have you done any market research to find out if people would actually use an escrow service when buying good on line? Are you sure you can convince people to trust you to hold their money?
Also, have you any experience of this kind of service? The fact that you have to ask these basic questions suggests that you haven’t. That in itself doesn’t mean that you shouldn’t do it, but it does highlight the need to take proper professional advice (which you must be prepared to pay for).
My first step was to post on your forum. So that I could know which direction i need to move to get started. Talking about professional advice, I am absolutely ready to pay for it but from where can i get professional advice for implementing such an idea? I mean is there some company out there? consultants? what are those people called? I thought such forum would give me advice.
Anyway my questions must have cliched you about my inexperience but I am looking forward for implementing this idea. People will start using this service once it is advertised.
As far as market survey is concerned i believe thats not so reliable due to the fact that my idea is a service/utility and it will be used as people use escrow service worldwide.
[FONT=verdana]No, I’m not suggesting you speak to a consultant. You need to get advice from a lawyer. The problems I’ve highlighted are legal ones. You need to discuss your ideas with someone who knows the law in Pakistand, and who can advise you on what you need to do to comply with it.
As far as market research is concerned, you say this is “not so reliable”. It is up to you do research your market in such a way that it is reliable. The fact that your proposed business is a service, and that it will be used worldwide, does not change that. Market research is essential for any new business idea; in that respect, there’s nothing special about your plans that make it any different.
Having said all this, I hope I haven’t discouraged you from going ahead with your plans. I wanted to warn you of the substantial legal difficulties that you face. It is now up to you to decide whether you can overcome them.
Thanks a lot mike. Ur patience and co operation is highly appreciated.
I will try to not to get de-motivated and come up with a solution to the problem.