Increase In New Business Formations Underscores Singapore’s Attractiveness To International Business Community
Singapore has bounced back from a dip in new business formations posted in the previous quarter, with a 9% increase in Q2. 15,964 new businesses were registered in Q2 2015, underscoring the confidence in Singapore as an international business centre.
Commenting on the continued robust growth in business formations, Ms. Jacqueline Low, Chief Operating Officer of Hawksford Singapore, says, ‘The significant QoQ growth reflects the growing confidence of the entrepreneurial community and investors. Despite various global challenges, the numbers have shot up in this quarter. This is reflective of the high business confidence and the trust in the strong business fundamentals of Singapore and the business community’s proactive mind-set to capitalise on the early signs of economic growth.
Though the numbers contracted by more than 28% in Q1, when compared to Q4 2014, in this second quarter it appears to be returning to normalcy with a 9% QoQ growth. In Q2 2015 a total of 15,964 new businesses were formed, compared with 14,641 in Q1 2015. The return of the momentum is a reflection of the resilience of Singapore as a commercial hub and indicates the growing business confidence amidst global economic turbulence.
Singapore, with its strong business friendly fundamentals and its strategic location amidst the burgeoning Asian markets, continues to attract foreign investors and enterprises. 34% of the new business formed in Q2 2015 had foreign shareholders, while a total of 47 new foreign company branch offices were setup in Q2 – a QoQ growth of 11.9%.
Entrepreneurs continue to take advantage of the favourable share capital clause of the Singapore Company Act that provides for businesses to be formed with share capital as low as S $1. As a result, in this quarter 74% of the businesses were formed with less than $10,000 share capital.
International enterprises continue to set up their subsidiaries in Singapore. The share of US companies setting up subsidiaries increased in this quarter by 2%, to 5%.
‘For the second half of 2015 we anticipate the economic growth to remain muted yet the business incorporation numbers will continue to grow at the present level aided by strong domestic consumption, sustained recovery of the west and the regional growth pockets,’ added Ms Low.
Private limited companies continued to be the dominant type of business formation, accounting for 54.7% of the total registration, with Sole Proprietorship the second most popular type of entity, with 6,021 new business formations. This category witnessed an 18% QoQ growth and contracted by over 20% on a YoY basis.
More detailed analysis and information can be found in the Q2 2015 Singapore Business Formation Statistics Report.