Business boom: 4,675 new firms formed in Singapore every month

Everyone is scrambling to get to the city.

Singapore saw a 14% increase in new business formations from April to June compared to last quarter, as the business environment in the city remains to be strong and the western economies continue to recover.

According to the Singapore Business Formation Statistics Report by Janus, of the 18,700 new formations this quarter, 44% are private limited companies. Most of these companies are Exempt Private Companies (EPCs) which are not required to annually audit their accounts. EPCs are companies with fewer than 20 individual shareholders and no corporate shareholder with annual revenue of under $5 million. EPC is the most preferred entity because of the relaxed compliance requirements and absolute limitation of the shareholders’ liability.

The business and investor community has strong confidence in Singapore’s economic potential, and remain to focus their eyes on the city, despite a marginal plunge this quarter owing to the uncertainties over the credit rate and anticipated US tapering.

Here’s more from the report:

With 7,545 registrations, the sole proprietorship is the second most dominant category. Interestingly, its share of 40.4% in the total business formation in this quarter registered a sharp spike, bucking the trend in the preceding quarters when its share hovered around 35%. In terms of growth rate, it registered a 33% increase against Q1 2014 and 39% increase against Q2 2013. Generally the growth rate of this category hovers around 5% but this quarter’s growth rate shows a significant spike.

In this year’s Budget 2014 debate speech, Member of Parliament for Ang Mo Kio GRC, Ang Hin Kee, called for more help to be extended to the freelancers and self-employed in Singapore. As they constitute an integral part of the workforce, he urged more schemes to be devised to specifically address the concerns of this group and for schemes such as Workfare Income Supplement to be extended to include this group. This call in parliament may have driven the freelancers and self-employed persons to register their businesses to gain a legal sanctity for their businesses in order to qualify for any potential government schemes.