Top Mistakes to Avoid When Incorporating a Company in Singapore: A Comprehensive Guide

Singapore is globally recognised for its pro-business environment, strong regulatory framework, and strategic position as Asia’s financial hub. It is no surprise that entrepreneurs and corporations from around the world prioritise Singapore company establishment for expansion and long-term growth.

However, despite Singapore’s straightforward incorporation process, many applicants still experience delays, rejections, or compliance issues due to avoidable mistakes. This guide highlights the most common mistakes made during Singapore corporation incorporation—and how you can avoid them for a smooth and successful setup.

1. Neglecting to Choose the Right Business Structure

One of the earliest and most important decisions in your incorporation journey is selecting the appropriate business entity. Singapore offers several structures, including:

• Private Limited Company (Pte Ltd)

• Sole Proprietorship

• Partnership / LLP

Each entity type carries different implications for taxation, liability, compliance, and scalability.

A Private Limited Company remains the most popular choice for entrepreneurs and foreign investors because it offers:

• Limited liability protection

• Better credibility with banks and partners

• Access to tax exemptions and incentives

• A scalable structure suitable for regional or global operations

On the other hand, structures like sole proprietorships may be simpler but expose owners to unlimited personal liability and offer limited growth flexibility.

2. Failing to Check Company Name Availability Properly

ACRA enforces strict guidelines for company names. Your chosen name must:

• Be unique

• Not be identical or too similar to existing registered names

• Not contain vulgar, offensive, or prohibited terms

• Not infringe trademarks

• Obtain approval from referral authorities when required (e.g., “bank,” “finance,” “school”)

Many applicants overlook similar-sounding names or trademark conflicts, resulting in unnecessary rejections or long review periods.

To confirm whether your name meets ACRA’s requirements, you may refer to their official naming guidelines here: ACRA – Choosing a Company Name

3. Overlooking Mandatory Compliance Requirements

Compliance is the area where most new companies make mistakes—often unintentionally. To successfully complete the establishment of a Singapore corporation, you must meet several statutory requirements:

Key ACRA Requirements

• At least one locally resident director (Singapore Citizen, PR, or eligible Employment Pass holder).

• Appointment of a locally resident company secretary within 6 months of incorporation.

• A registered office address in Singapore (P.O. Boxes are not permitted).

• Proper maintenance of statutory registers, including:

  • Register of Members

  • Register of Directors

  • Register of Registrable Controllers (RORC)

• Annual General Meeting (AGM) within 6 months after the financial year end (unless exempted).

• Annual Return (AR) filing within 7 months after the financial year end.

• Estimated Chargeable Income (ECI) filing with IRAS within 3 months after the financial year end (unless exempt).

Failure to meet these obligations may lead to late filing penalties, compliance enforcement action, or in serious cases, company strike-off.

4. Misjudging Initial Capital Requirements

Although Singapore requires only SGD 1 as the minimum issued share capital for a Private Limited Company, many entrepreneurs underestimate the importance of setting an appropriate initial capital amount.

A very low paid-up capital may:

• Reduce credibility with banks, partners, and suppliers

• Hinder operational capacity

• Create issues during licence applications or tender submissions

Tip: Determine your capital based on operational needs (technology, manpower, marketing, R&D, etc.). You can always increase capital later, but starting with a realistic amount supports smoother business operations.

5. Overlooking Tax Incentives and Corporate Tax Benefits

Singapore’s tax framework is one of the most attractive globally. The corporate income tax rate is a flat 17%, but most new companies pay significantly less due to the Start-Up Tax Exemption (SUTE) scheme.

Key Tax Benefits

• SUTE (for qualifying new companies):

  • 75% exemption on the first SGD 100,000 of normal chargeable income

  • 50% exemption on the next SGD 100,000

• PTE (Partial Tax Exemption for all companies):

  • 75% exemption on the first SGD 10,000

  • 50% exemption on the next SGD 190,000

For the most accurate tax exemption details, refer to IRAS’s official guide: IRAS – Corporate Income Tax Rates & Exemptions

Additionally, Singapore’s extensive network of 80+ Double Taxation Avoidance Agreements (DTAs) reduces cross-border tax exposure for internationally active businesses.

6. Skipping Necessary Industry-Specific Licences

Certain business activities in Singapore require mandatory licences or approvals, including:

• Food & Beverage operations → Singapore Food Agency (SFA)

• Financial services / fintech → Monetary Authority of Singapore (MAS)

• Healthcare services → MOH

• Education-related services → Ministry of Education (MOE)

• Telecommunications services → IMDA

Operating without the required licence can lead to severe penalties or business shutdown.

7. Handling Incorporation Alone Without Professional Guidance

While Singapore’s incorporation process is straightforward, navigating compliance, documentation, due diligence, and regulatory nuances without professional assistance often leads to:

• Incorrect filings

• Delayed approval

• Missed compliance deadlines

• Tax inefficiencies

Professional corporate service providers help you:

• Draft accurate incorporation documents

• Ensure compliance with ACRA and IRAS regulations

• Structure your shareholding and governance properly

• Optimise tax exposure through correct entity planning

• Maintain statutory registers and filings

Conclusion: How Mirr Asia Can Support Your Singapore Incorporation Journey

Incorporating a company in Singapore does not need to be complex or stressful. With the right partner, the process becomes seamless, compliant, and strategically optimised.

Mirr Asia specialises in guiding entrepreneurs and corporations through every stage of Singapore corporation incorporation, including:

• Choosing the right entity structure

• Ensuring full compliance with ACRA and IRAS

• Preparing accurate documentation

• Advising on tax incentives and licensing requirements

• Providing nominee director, company secretary, and registered office services

With years of experience and deep familiarity with Singapore’s regulatory environment, Mirr Asia ensures that your Singapore company establishment is smooth, efficient, and future-ready.

Contact Mirr Asia today and let our experts help you build your business in one of the world’s most advanced and trusted jurisdictions.