Balanced Growth in Singapore as Economy Gathers Pace

Despite a 10.7% decline quarter-on-quarter (QoQ), Hawksford Singapore noted balanced growth in Singapore with a rise in the formation of large and medium scale companies as well as small business set-ups in 2017.

Ms Jacqueline Low, Chief Operating Officer of Hawksford Singapore, a leading corporate service provider for international businesses, believes that Singapore remains a hot spot for investment and business expansion.

"As one of the easiest places in the world to do business, Singapore remained a compelling business hub in 2017. Companies of all sizes continue to chose Singapore as their preferred business destination, recognising that factors such as a pro-business environment and strong macro fundamentals give it an edge over other financial jurisdictions," she said.

(a)  Business Formation by Entity Type

The share of Private Limited Companies formed grew 4.2% QoQ in Q4 2017. Exempt and Non-Exempt Private Limited Companies (EPC) registered a 9.8% and 9.9% year-on-year (YoY) increase respectively, signaling that businesses, especially large- and medium-scale companies, recognised Singapore as an attractive investment destination.

Compared to 2016, more large and medium scale companies in the form of Non-EPCs and Public Companies Limited by Guarantee were set up in Singapore in 2017. Uncertainties within the business landscape created increased interest in philanthropic activities with the increase in the number of companies limited by Guarantee, an entity type popular for non-profit pursuits.

(b)  Business Formation by Share Capital

Leveraging Singapore's minimal share capital requirement of $1, the share of companies incorporated with less than S$10,000 share capital increased 1.6 percentage points in Q4. It allows for quick and easy set-up for businesses without a high share capital to start with. When business is picking up or doing well, they then may increase the share capital.

Besides anchoring more large-scale businesses in 2017, the share of companies in the lowest share capital tier increased 0.9 percentage points. The growth at both ends of the spectrum of enterprise is a clear sign of the emergence of balanced growth in Singapore.

(c)  Business Formation by Shareholding Structure

Owing to an attractive tax framework and a broad tax treaty network, Singapore continued to enjoy a growing stream of foreign investments in Q4 2017 with a 1.9% increase in the share of wholly foreign-owned entities at 40%.

In 2017, the share of companies with 100% local shareholding rose 0.6 percentage point. This points to growing business opportunities locally, buoyed by encouraging global and regional economic conditions. Singapore's business-friendly environment and willingness to accept 100% foreign shareholding structures makes it a good place to setup subsidiaries of foreign established organisations.

(d)  Business Formation by Industry

The climb in the share of companies in the financial services sector to 12.3% in Q4 comes as a nod to Singapore's transparent and robust regulatory environment and proximity to a resurgent Asia. It is no surprise that the financial services industry has picked up pace in 2017 as fintech gained momentum with the support of MAS, which also organized the inaugural Fintech Festival in 2016.

The share of companies formed in the wholesale trade sector continued to remain the highest at 19.2%, validating Singapore's role as Asia's distribution hub.

(e)  Business Formation by Country

The share of foreign subsidiaries in new company formations increased 2.2% to 44.4% in Q4 2017 with the British Virgin Islands, Hong Kong and Cayman Islands accounting for 6.5%, 4.3% and 3.7% of foreign subsidiaries formed respectively. Many of the offshore companies act as investment holding companies that invests and sets up its operational company/ies in Singapore.

Besides China, Malaysia, India and Indonesia, individual investors were also increasingly coming from diverse source countries such as Japan, Australia, Indonesia, the UK and France.

"We have seen an increase in businesses from overseas choosing to set-up and work with Hawksford in 2017, as compared to 2016. Looking ahead, we anticipate a further upswing in business formations in 2018 as growing global momentum and improved business sentiment creates an increasingly positive economic outlook," Ms Low added.  

The Singapore New Business Trends Report is a quarterly report by Hawksford Singapore that contains statistics and analysis of business formation activity in Singapore. For more information on Hawksford Singapore's Business Formation Statistics Report for Q4 2017, download the report from the link here. 

About Hawksford Singapore

Hawksford Singapore is a leading Singapore-based corporate services firm providing one-stop solutions for starting and managing a business in Singapore. The Hawksford Singapore team consists of seasoned professionals with extensive experience in Singapore's legal, financial, tax and regulatory frameworks. Through its expertise and in-depth knowledge, Hawksford Singapore commits to bring exceptional value to its clients every time.

For more information, please visit https://www.guidemesingapore.com.

For media enquiries, please contact:

Ms. Chye Fong Yee
Tel: (+65) 6704 9174
Email: FongYee.Chye@hawksford.sg

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