16,190 new businesses were formed in Singapore in Q1 2014, registering an 11.7% increase from the previous quarter.
Trend Analysis - 11/01/2014
Janus Corporate Solutions has released the Q1 2014 Singapore Business Formation Statistics Report. The first quarter statistics reveal an extremely busy business scene in Singapore, with a total of 16,190 new businesses formed. The figure is a phenomenal increase of 14.4% against the first quarter business formations in the preceding year. The robust growth in numbers echoes the gradual recovery of the western market and the local market’s surging confidence.
As regards the type of entities established, the trend remains unchanged with a majority of the businesses being set up as private limited companies, and among them, more than 85% were exempt private limited companies. The exempt private limited companies continue to remain the most preferred type of entity because of its tax friendliness, relatively minimal regulatory requirements and the protection it provides to the shareholders in the form of liability ceiling.
Entrepreneurs continue to take advantage of the favorable share capital clause of the Singapore Company Act, which provides for businesses to be formed with share capital as low as S$1. As a result, in this quarter, more than 75% of the businesses were formed with fewer than $10,000 of share capital. 1
Singapore, with its strong business friendly fundamentals and its strategic location amidst the burgeoning Asian markets, continues to attract foreign investors and enterprises to set up business operations in Singapore. 32% of the new business formed in Q1 2014 has foreign shareholders, fortifying the strong reputation of Singapore as an efficient regional hub for international businesses. Although the share of business with foreign shareholders has declined marginally, it has recorded a significant rise in terms of absolute numbers.
While new business formations continue to be predominantly from wholesale trade and financial services sectors, the new business formations in IT and the retail sector have registered a marginal growth in their shares. The government’s drive to promote productivity and innovation appears to fuel the growth in the IT sector and the strong domestic spending of the consumers buoys the retail sector.
Commenting on the continued robust growth in business formation Ms. Jacqueline Low, Chief Operating Officer of Janus Corporate Solutions, stated: “The significant growth, both in terms of QoQ and YoY, is in line with the gradual recovery of the global economy. The west is reversing its recessionary trend, and though marginal, the recovery is sustained and there are signs of continued growth. This recovery has increased the confidence of investors and entrepreneurs, which is evident from the sharp rise in the number of new businesses formed in the first quarter of the year. The strong support of the government is encouraging local entrepreneurship and the continued strong share of local business registration is a testament to that. Singapore is constantly reviewing its business quotient; it has an attractive tax structure, extensive trade agreements and world-class infrastructure, along with an open and resilient economy, which provide strong fundamentals for business growth. Barring any inclement economic turmoil, we remain very positive for the rest of the year.”
For Q1 2014 Singapore Business Formation Statistics Report please click here.
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