Net formation of business entities here in the first nine months of this year was about a quarter lower than the average over the last few years.
This was due to heightened economic uncertainties in the global economy and resulting slowdown in the local economy, and it is likely to remain low for the rest of the year.
The number of new businesses formed - accounting for the number of entities which have ceased - was about 9,900 for the period, compared with the average of 13,800 over the same nine-month period between 2014 and last year, said Senior Minister of State for Trade and Industry Chee Hong Tat in Parliament yesterday.
He was replying to a question from Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) on the net formation of businesses by sector, as well as a question on efforts to ensure healthy net business formation over the coming years.
Mr Chee said most sectors across the economy, including transportation and storage, business services and construction, saw a fall in the net formation of businesses during the nine-month period this year.
To develop a vibrant ecosystem for businesses, the Government will lower barriers to entry and exit for businesses, among other strategies.
Mr Chee cited the GoBusiness portal which was launched last month as an example. It aims to simplify the regulation process for food and beverage companies.
The ministry is also looking at ways to grow the economy and enable companies to seize new opportunities locally and overseas. These include developing new sectors such as agri-tech and precision medicine, and supporting firms in pursuing growth opportunities abroad, Mr Chee noted.
It will also continue to develop a vibrant start-up ecosystem through initiatives like Startup SG, which provides start-ups with access to financial and non-financial support like mentorship.
In response to Mr Saktiandi's question on what the Government considers a healthy rate of business cessation, Mr Chee said that the ministry has no targets for the rate of firms exiting the economy.
The process of allowing firms to exit, as well as allowing resources to be channelled to more productive and competitive firms, will contribute to a stronger economy and better jobs for Singapore workers, he noted.
