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Singapore wins silver in global entrepreneurship

Posted 4 years ago in Xero news by Johnny MacAvoy
Posted by Johnny MacAvoy

Guest Author: Anthony Coundouris, Director of Sales and Marketing at Future Books. 

Hot on the tail of the most powerful startup hub, Silicon Valley, Singapore was ranked #2 globally in terms of total entrepreneurial activity, according to the Global Entrepreneurship Monitor 2012 Report.

Now, this piqued our interest, so we decided to survey our clients (mostly in the food and beverage, tech and consulting industries) to find out what makes them tick.

We completed this study on Singapore startups in January 2014. A random sample of 242 businesses located within a four kilometre radius of Singapore’s CBD were drawn. 95% of the sample were private limited companies, incorporated sometime during 2012/13.

Controlling interest

Owners and directors, or control, were split evenly between foreigners and locals, except in the instances of food and beverage. Food and beverage saw a larger proportion of local control.

 Foreign and local split between startups

50% of directors and shareholders of food and beverage companies were either blood relation or married couples.

Blood ties may be important part of financing an F+B for several reasons.

  1. Cash collection is a risky business. Keeping it in the family is one way to ensure the money gets to the bank, and dividends are paid.

  2. Large capital injection required. F+B businesses are capital-hungry. Singapore banks won’t lend and investors are not attracted to this business model, so the only source of funds is family and friends.

Source of funding for startups

When it came to tech startups, the majority of foreign control was with British and American citizens.

Tech startups by nationality











For consulting firms, 25% of the foreign control resided with Singapore PR, suggesting that  this sector attracts directors who want to make Singapore a way of life.

Corporate shareholding

The study showed ownership of companies was with individuals. However, corporate holding as a percentage of control for F+B and tech companies was significant. These corporate holdings were a mix of local and foreign incorporations.

Food and beverage: 20%

Tech: 15%

Corporate holding appears to be a method tech companies use to control ownership of intellectual property and the flow of funds from the parent to the child company. In the instance of food and beverage, several corporate holding companies own an entire portfolio of restaurants in Singapore.

Singapore’s outlook

According to ASEAN business survey outlook 2014 conducted by the American Chamber of Commerce (AmCham), Singapore is Asia’s leading business hub.

It ranks 9th out of the 26 countries surveyed, right on the tail of cities such as New York, London, Sydney and Hong Kong.

Singapore’s success rate is credited to a few key areas namely ease of doing business, economic clout, technology readiness and health, safety and security. Not surprising though, given that Singapore is rated #1 in the world by World Bank for ease of doing business.

85% of the 475 business executives surveyed, expect an increase in profits in 2014. This is a 21% jump from the year before

So if you’re thinking of setting off for Singapore and building a business, now’s the time to do it.

One comment

Heather Smith
April 3, 2014 at 5.35 pm

Also worth noting in the Singaporeon story – the S’pore government uses a public version of FATHOMHQ (a dashboard Xero add-on) and all listed businesses in Singapore must submit their data to it – I’m sure this forward thinking has somewhat contributed to the success of businesses in S’pore lah!

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