Newly formed Singaporean businesses dropped to 48% in Q2

While foreign owned-businesses upticks by 21.3%.

Despite the uncertainties of the global economic conditions, foreign investors remained unfazed in their confidence in the Lion City as a commercial launch pad for their ventures, changing the game for local entrepreneurs as share proportions deviate the historical trend.

The Q2 saw the highest number of foreign investors infiltrating the local market for the past four quarters, with 57 businesses established during the latest quarter.

According to Hawksford Business Formation Statistics Report, internationally owned companies account for 39% of all business formations during the quarter as total business registration leapt up by 10.4% to 17,628 from last year.

The report revealed that the share of businesses formed by Singaporean individuals started to decline in Q1 at 50%. The shift became more pronounced as it dipped further to 48%.

On a yearly basis, the share of companies formed by Singaporean individuals dropped to 56%, a significant decline from its traditional majority share of around 70%

“The South East Asian economies are considered a growth market and safe haven given uncertainty in the west. The central banks in the region are keeping rates low, therefore aided by liquidity and in quest of new markets businesses are expanding across borders,” the report said.

Commenting on the matter, Hawksford COO Jacqueline Low said Q2 had been a robust period for business formations as it recorded a significant increase in new business given the global economic backdrop.

"The continued uptrend in the share of foreign owned companies is an unprecedented variance, which we believe is caused by the uncertain global political situation and the less than moderate economic growth momentum in the mature economies," she said.

Looking forward, she believes formation growth rates will linger as the third quarter moves forward.

However, she also noted that the surge in the share of foreign owned businesses may finally simmer down by the end of the year.

"We also predict the share of foreign owned companies to taper down by the last quarter and the historical trend will be restored. Singapore is resilient and has strong business foundations that will hold up well against the sluggish global economy," she stressed.