Lianhe Zaobao - 上半年被强制清盘公司达187家 全年或再创新高 (Aug 2025)
Speaking to Lianhe Zaobao in a recent interview, Ellyn Tan, Partner, Financial Advisory (Restructuring & Insolvency), expects the number of insolvent companies in certain sectors such as the F&B and construction industries to rise, as economic conditions remain unfavourable and cost pressures have yet to ease.
Surge in compulsory liquidations in 2025
Singapore has already seen 187 companies placed into compulsory liquidation in the first half of 2025—surpassing the number recorded in the second half of the previous year. Given last year's challenging political and economic outlook, many companies have struggled to repay their debts, with experts predicting that this year's figures may reach a new high. Comprising of mostly small and medium-sized enterprises (SMEs), these companies span across industries such as food & beverage (F&B), construction and technology.
Why the F&B industry is more prone to insolvency
"The F&B industry is more prone to compulsory liquidation because it operates largely on a cash basis, has short credit terms, and is highly sensitive to cost fluctuations—especially in Singapore’s environment of high rental and labour costs. That said, when one restaurant shuts down, there’s always another ready to take its place," Ellyn shared.
Cash flow issues: A symptom of deeper challenges
Although cash flow remains one of the most common triggers for compulsory liquidation, these issues are rarely standalone, often revealing cracks in the fundamentals of a business.
Uncovering a deeper layer of the issue, Ellyn concluded, "Cash flow issues are often a symptom of deeper operational challenges, such as flaws in the business model, the loss of key customers, poor inventory management, or failure to adapt to market changes. Do these problems change over time? No, they don’t."
Looking Ahead
As more SMEs face cost pressures and structural challenges, proactive insolvency advisory in Singapore will be crucial. If your business is experiencing signs of distress, Forvis Mazars’ experienced financial advisory professionals can help you assess risks and explore viable options before issues escalate.
Contact our Restructuring & Insolvency team to discuss how we can support your business in navigating today’s challenging environment.
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