Mistakes To Avoid While Establishing A Singapore Company

Establishing a company in Singapore is a smart move for many founders thanks to clear regulations, strong governance, and efficient digital filings. However, even in such a business-friendly environment, common mistakes can lead to delays, penalties, or compliance issues. Here’s how to avoid them and ensure a smooth incorporation process.

1) Inadequate Market and Regulatory Scoping

Market validation is essential, but so is understanding regulatory fit—licensing, employment quotas, tax registration, and annual filings. Before committing, review both your target market and compliance obligations to ensure your business model is feasible in Singapore’s environment.

2) Choosing the Wrong Business Structure

Singapore offers multiple structures—sole proprietorship, partnership, limited liability partnership (LLP), and private limited company (Pte. Ltd.).For most growth-oriented founders, a Pte. Ltd. is best, offering limited liability and stronger investor confidence. Refer to the Accounting and Corporate Regulatory Authority (ACRA) guide for official entity types and requirements:

Reference: ACRA — Setting Up a Local Company

3) Misunderstanding Director and Secretary Rules

• Local Director: Every company must have at least one director ordinarily resident in Singapore (citizen, PR, or eligible pass-holder).

• Company Secretary: Must be appointed within 6 months of incorporation; this position cannot remain vacant for more than 6 months. Neglecting these statutory appointments can result in fines or enforcement action by ACRA.

4) Missing AGM and Annual Return (AR) Deadlines

Private companies must file their Annual Return within 7 months after the financial year end (FYE).AGM obligations are also FYE-based, with exemptions available if conditions are met. Late filing incurs a late lodgement penalty up to S$600, while serious or repeated breaches can lead to court fines up to S$5,000 per charge. Always follow the latest FYE-based rules rather than outdated 18/15-month schedules.

5) Misjudging Initial Capital

A Singapore company can be incorporated with S$1 paid-up capital. There is no rule requiring deposit within one year; higher capital may, however, help with bank account opening or visa applications. Treat any minimum-capital demand as a commercial, not legal, requirement.

6) Ignoring Business Licensing Obligations

Many sectors require specific licences or permits before operations can begin (for example F&B, employment agencies, import/export, or fintech). To check which apply to your activity, use the Government’s official GoBusiness Licensing portal: GoBusiness — Find Business Licences

Operating without the necessary approvals can result in penalties or closure.

7) Misunderstanding the Certificate of Incorporation (COI)

Your company is officially registered once ACRA issues a Certificate Confirming Registration / Incorporation of Entity via BizFile+ (fee S$50).You can download it anytime, along with your Business Profile, as legal proof of incorporation.

8) Overlooking Tax Incentives and Filings

Singapore’s corporate tax rate is 17 %, but generous exemptions apply:

• Start-Up Tax Exemption (SUTE): 75 % exemption on the first S$100 000 + 50 % on the next S$100 000 of chargeable income for the first 3 YAs (subject to conditions).

• Partial Tax Exemption (PTE): Available for companies not qualifying for SUTE.

• ECI Filing: Within 3 months after FYE unless exempt.

• Corporate Tax Return: File electronically by 30 Nov each YA. Official details and current thresholds are published by the Inland Revenue Authority of Singapore (IRAS): IRAS — Corporate Income Tax for Companies

9) Ignoring Audit Exemption Rules

Private companies that meet any 2 of 3 criteria for the past 2 financial years—revenue ≤ S$10 million, total assets ≤ S$10 million, employees ≤ 50—qualify for small-company audit exemption. If not exempt, an auditor must be appointed within 3 months of incorporation.

10) Skipping Professional Support

While Singapore’s systems are user-friendly, incorporation still involves compliance, tax, and accounting complexities. Partnering with an experienced corporate service provider ensures accurate filings, timely renewals, and peace of mind—especially for overseas founders unfamiliar with ACRA and IRAS procedures.

Conclusion: How Mirr Asia Helps

Mirr Asia streamlines Singapore incorporation and compliance through:

• Company incorporation

• Compliance management

• Business licensing assistance

• Accounting, tax, and compliance management for annual filings.

We help founders set up confidently in Singapore’s trusted business environment—efficiently, transparently, and fully compliant. Get in touch today to start your Singapore company with clarity and confidence.