Starting a business in Singapore seems like a straightforward task. Register with ACRA (Accounting and Corporate Regulatory Authority), appoint a director, and open a bank account. Sounds simple, right?
For foreigners, it’s often far from easy. A single mistake during setup can lead to fines, delays, or lost opportunities, easily costing over $10,000. Many only realize their errors when compliance notices pile up or deals fall apart.
Here’s what typically goes wrong, why it happens, and how to sidestep these costly pitfalls.
Many foreigners assume ACRA will guide them through registration. That’s a misconception. ACRA is a regulator, not a consultant. Its role is to enforce compliance, not to fix your mistakes.
If you submit forms with errors—like an unqualified director or missing details—ACRA won’t reach out to help. Your application might be rejected, or worse, approved with issues that trigger penalties later. This leads to delays, extra fees, and frustration.
Secretarial services are vital here. They ensure your filings meet ACRA’s strict standards, keeping your company compliant and saving you from costly rejections.
Singapore law requires at least one resident director—a Singapore citizen, permanent resident, or Employment Pass holder with a local address. Foreigners often use nominee directors to meet this rule, but a poor choice can lead to serious trouble.
If a nominee director fails to handle filings, like annual returns, the company faces fines. In severe cases, it could be struck off the register. A Mexican entrepreneur once shared how a low-cost nominee director missed critical filings, resulting in $7,700 in penalties and $4,300 in legal costs to reinstate the company.
Trusted secretarial services help by selecting reliable nominees and ensuring they fulfill ACRA’s obligations, preventing expensive oversights.
Clearing ACRA’s requirements doesn’t mean you’re in the clear. Opening a corporate bank account in Singapore can be challenging. Banks often reject applications due to unclear shareholder structures or incomplete paperwork.
These delays can stall your business. Without a bank account, you can’t invoice clients or pay suppliers, leading to lost revenue. A Filipino founder lost a $22,000 contract because his bank account took weeks to open, delayed by missing compliance documents.
Secretarial services streamline this process by preparing clear, bank-ready documents and clarifying ownership details, reducing rejections and speeding up the process.
ACRA registration is just the beginning. Companies must file annual returns, maintain shareholder registers, document resolutions, and hold annual general meetings (AGMs). Foreigners often think setup is the finish line, only to miss deadlines and incur penalties.
Fines for late filings start small—$300 for a missed return, $600 for a skipped AGM—but they add up quickly. A year of non-compliance can easily cost $10,000 or more in penalties and fees.
Secretarial services are designed to manage these tasks. They track deadlines, keep records updated, and ensure compliance, letting you focus on growing your business.
Singapore’s online registration system is fast and accessible, tempting foreigners to handle setup themselves. But it doesn’t warn you about structural errors—like incorrect share issuances—that can cause problems later.
A Danish founder registered his company without help, only to find his share structure scared off investors. Fixing it cost $13,200 in legal fees and delayed his funding round by months.
Engaging secretarial services early ensures your company is set up correctly, saving you from costly restructurings down the road.
Here are some frequent mistakes foreigners make:
These small mistakes can escalate into $10,000+ in costs when fines, legal fees, and lost opportunities pile up.
Partnering with professionals who understand ACRA’s system is the best way to avoid errors. But not all secretarial services are equal. Some focus only on incorporation, while others provide ongoing support. Before choosing, ask:
The right answers indicate a partner who’ll help you avoid long-term headaches.
Navigating ACRA’s rules isn’t impossible, but it’s unforgiving for foreigners unfamiliar with the system. Most $10,000+ mistakes stem from small oversights: a bad nominee director, a late filing, or a rejected bank application.
With reliable secretarial services, you can sidestep these traps and build your business on a solid foundation. Get it right, and you’ll save time and money. Get it wrong, and you’ll be fixing errors instead of growing your company.