The number of business formation in Singapore further gained acceleration in the second quarter with a total of 18,689 new businesses registered, according to the Q2 2014 Singapore Business Formation Statistics Report released by Janus Corporate Solutions.
The rise is a significant QoQ growth of 15.4% and an increase of 16.6% against that of Q2 2013.
"The significant growth both in terms of QoQ and YoY, signals the growing confidence of the entrepreneurial community and investors in Singapore," says Jacqueline Low, Chief Operating Officer of Janus Corporate Solutions.
Private limited companies continued to be the dominant type with over 51% of the total registration being private limited companies; of these, 8,188 companies were exempt private limited companies.
The exempt private limited companies continue to remain the most preferred type of entity because of its tax friendliness and relatively minimal compliance requirements.
Entrepreneurs continue to take advantage of the favorable share capital clause of the Singapore Company Act that allows 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 S$10,000 share capital.
There was a marginal increase in the number of businesses formed with a share capital of S$10,000 -- S$100,000, which indicates that more high value businesses are being set up in Singapore.
The sole proprietorship category was a show stealer of this quarter, because of the phenomenally sharp increase in the number and share of such entities in the total business formation.
Strong reputation as regional hub
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 there.
Of the new business formed in Q2 2014, 31% had foreign shareholders, fortifying the strong reputation of Singapore as an efficient regional hub for international businesses.
The share of business with foreign shareholders has declined marginally on the back of growing concerns about credit rate increase and tapering of quantitative easing.
While new businesses formations continue to be predominantly from wholesale trade and financial services sectors, the share of new businesses formation in the retail sector has registered a marginal growth.
The strong domestic spending of consumers may have attracted more players into the retail sector.
"Economists forecast a sustained growth for Singapore with the recovery of its export markets and therefore the second half of 2014 should also be extremely good for new business formation," says Low.