Singapore Business Liquidations Hit Five-Year High as Costs and Debt Strain Firms

187 Companies Ordered to Wind Up in First Half of 2025

Singapore courts ordered 187 companies to wind up between January and June 2025, up from 146 in the same period in 2024 and 95 in 2023, according to Ministry of Law figures. The increase puts compulsory liquidations at their highest level in at least five years, exposing growing financial strain on businesses, their workers and the companies waiting to be paid.

The first half total rose by 41 companies, or about 28 percent, from a year earlier. Compared with the first six months of 2023, it was almost twice as high. The rise follows 307 compulsory liquidations across 2024, the highest annual total since 2010.

As of August 1, 2025, the pressure extends from restaurants and drinks distributors to construction, interior design and other services. Higher borrowing costs, expensive rents, weak demand and the withdrawal of COVID-19 support have made it harder for businesses to meet their bills. Some failures also involve international sanctions or allegations of fraud.

Liquidation is the process of closing a company, selling its assets and using the proceeds to repay debts. In a compulsory liquidation, a court orders that process, usually after a creditor seeks payment. For employees, it can mean losing a job while waiting for outstanding pay. For suppliers and landlords, it can mean recovering only a small part of the money owed.

New businesses are still opening, and registrations rose in the first half of 2025 compared with the same period last year. Singapore is therefore seeing both continued business creation and a sharp increase in companies reaching the end of their financial resources.

Why Businesses Are Running Out of Cash

Interest rate increases between 2022 and 2024 made borrowing more expensive. Companies already carrying debt had to find more money to service it, while businesses seeking fresh loans faced a higher cost of staying afloat.

The withdrawal of pandemic support in 2023 removed another source of relief. A sluggish recovery then left businesses trying to cover rising expenses without a strong enough improvement in sales. Rent has remained a persistent burden, particularly for businesses that need physical premises to serve customers.

Small and medium enterprises, or SMEs, are especially exposed because they often have smaller cash reserves and less access to financing. A company can own equipment or other assets and still lack the cash needed to pay wages, rent and suppliers when those payments fall due.

Some businesses tried to borrow from outside sources to keep operating. High interest rates, cautious lenders, mounting debt and weak demand made that difficult. Construction and interior design companies have also faced manpower shortages and higher material costs, adding pressure to already strained finances.

Debt recovery firms describe a sharp increase in the size of unpaid bills. Debts per case that ranged from S$20,000 to S$60,000 last year have risen to more than S$100,000 in 2025, with some companies owing millions of dollars. Those amounts leave less room for a struggling business to catch up through ordinary trading.

Restaurants Keep Opening as Others Close

Food and beverage businesses have been particularly hard hit. A record 3,047 establishments closed in 2024, the highest annual number in 15 years. Another 1,404 closed in the first half of 2025, showing that the pressure continued into this year.

At the same time, 1,964 food and beverage establishments opened in the first half of 2025. Openings exceeded closures by 560, but the large numbers moving in both directions show how unsettled the sector has become. Entrepreneurs are still entering the market while many existing operators struggle to remain in it.

Restaurants and bars also support businesses beyond their own premises. When an outlet closes, a distributor can lose a customer and a supplier can be left chasing an unpaid bill. Proof & Company Spirits became a prominent example of how difficulties among hospitality businesses can spread through the trade.

Proof & Company Closes After 13 Years

Proof & Company Spirits, a leading distributor in Singapore's craft spirits market, entered provisional liquidation in July 2025 after 13 years in business. The company cited the closure of key restaurant and bar customers and a dramatically changed market environment.

The closure left 16 employees without jobs and affected a drinks industry in which the distributor had played a role beyond delivering bottles. Industry consultant William Leonard described the company's importance to Singapore's craft spirits community:

This isn't just another distributor shutting shop—it's the end of an era for Singapore's craft spirits scene. For those outside our inner circle, Proof wasn't just moving bottles. They were building culture.

Members of the drinks and hospitality trade responded with messages of solidarity and reflection, sharing support for colleagues affected by the closure. Their reaction reflected concern about conditions across the industry as well as the loss of one company.

Brandon Grusd, a former general manager of Proof & Company, urged people in the trade to support each other:

The industry is under pressure and what's happened here isn't isolated. The drinks and hospitality world is going through a tough time, and now more than ever, we need to look out for one another.

Sanctions Trigger a Different Kind of Collapse

CCIC Singapore faced a sudden financial crisis linked to international sanctions. The subsidiary of China Certification and Inspection Group was forced into liquidation in June 2025 after US sanctions froze its bank accounts.

The sanctions concerned allegations that the company helped obscure the origins of Iranian oil exports to China. Frozen accounts cut off access to money needed for salaries and daily operations, while the company also lost clients. Its customers had included major global energy companies.

More than 300 employees were retrenched. Their retrenchment benefits were delayed until the liquidation process concluded, leaving workers waiting for money after their jobs had ended. The case illustrates how a company can face an abrupt cash crisis when access to banking stops, even when its difficulties differ from the rent and sales pressures affecting local restaurants or service firms.

The broader rise in business failures developed across several years:

• 2022 to 2024: Interest rates rose, increasing borrowing costs.
• 2023: Pandemic support was withdrawn; 95 companies underwent compulsory liquidation in the first half.
• 2024: Compulsory liquidations reached 146 in the first half and 307 for the full year. Food and beverage closures totalled 3,047.
• January to June 2025: Courts ordered 187 companies to wind up, while 1,404 food and beverage establishments closed and 1,964 opened.
• June 2025: CCIC Singapore was forced into liquidation after US sanctions froze its bank accounts.
• July 2025: Proof & Company Spirits entered provisional liquidation.

Why Creditors May Recover So Little

Liquidation rarely gives creditors a quick or complete repayment. A liquidator gathers and sells company assets, assesses claims and distributes the money according to legal priorities. The process can be slow, particularly when there are disputes or assets that are difficult to sell.

Some creditors recover as little as 10 percent of their claims. At that rate, a creditor owed S$100,000 would receive S$10,000. Equipment and other assets may sell at steep discounts, while items that find no buyer may be discarded.

Suppliers and landlords can face a difficult choice before a business closes. Waiting may give a struggling customer time to recover, but it can also leave overdue bills unpaid for longer. Some delay action in the hope that the company will survive.

Debt collectors report increases of 20 to 30 percent in cases each month, with some customers returning repeatedly for help. Suppliers without security over company assets are particularly exposed when little money remains for distribution. Workers also face uncertainty over unpaid salaries and retrenchment benefits, on top of the immediate loss of employment.

Fraud Cases Add Another Layer to Asset Recovery

Some liquidation proceedings involve attempts to recover money allegedly diverted through fraud. In one of Singapore's largest Ponzi schemes, liquidators for companies linked to alleged nickel trading fraudster Ng Yu Zhi won a court ruling to recover more than $900 million from former directors and employees.

A Ponzi scheme uses money from later investors to pay earlier investors rather than generating genuine business returns. In this case, the court found that the companies were insolvent, had no legitimate business and had used investor funds for personal gain.

The scale of that recovery action shows why liquidation can involve much more than selling office furniture or equipment. Liquidators may also need to pursue people who received company money, establish how funds were used and bring legal claims to recover assets.

Another major action in 2025 concerns companies linked to Malaysia's 1MDB scandal. Their liquidators filed a $2.7 billion lawsuit against Standard Chartered Bank in Singapore, alleging that the bank enabled fraudulent transfers.

The 1MDB claim involves efforts to recover money across borders and allegations against a financial institution. Singapore's courts and regulators have played a role in supporting international investigations and asset recovery connected with the scandal. The lawsuit also brings reputational risks for institutions accused of involvement in disputed transfers.

Courts Clarify How Claims Must Be Handled

Singapore's High Court has also addressed how liquidators should decide whether to accept creditor claims. In a case involving Park Hotel Group Management and Ascendas Hospitality REIT, the court said liquidators must give clear explanations for their decisions and ensure that company assets are used to pay genuine debts.

For creditors, the decision matters because every accepted claim affects how a limited pool of money is divided. A supplier seeking repayment needs to know why its claim has been accepted or rejected, while other creditors have an interest in ensuring that payments go only toward valid debts.

Recent proceedings have brought closer scrutiny to Singapore's insolvency and restructuring framework, including the duties of liquidators and the rights of creditors. Judicial oversight is intended to support transparency, accountability and fairness as companies close and claims compete for the remaining assets.

A Weaker Outlook Meets Continued Business Creation

Singapore's exposure to global trade adds another source of uncertainty for businesses already managing high costs. The Ministry of Trade and Industry downgraded its 2025 GDP growth forecast to between zero and 2 percent, compared with growth of 4.4 percent in 2024. GDP measures the value of goods and services produced in an economy.

Rising protectionism, US tariffs and geopolitical tensions add to uncertainty over trade and demand. Retailers and food and beverage operators also depend on consumer confidence and international visitors, making changes in spending especially important to their sales.

SMEs have less room to absorb a prolonged slowdown. Smaller financial reserves can disappear while rent, wages and debt payments continue. The combination of limited financing, higher costs and uncertain demand helps explain why some firms reach liquidation after trying to borrow their way through earlier difficulties.

More companies were nevertheless registered in the first half of 2025 than in the same period of 2024. Entrepreneurs and investors continue to be attracted by Singapore's legal stability, skilled workforce and location, even as existing businesses close.

New registrations show continued entrepreneurial activity alongside the failures. Some sectors are contracting while others still attract people willing to invest. For business owners, keeping cash reserves, tracking payments and preparing for changes in demand remain practical concerns in an environment of expensive premises and persistent manpower shortages.

Workers and Businesses Seek Support

Public discussion has reflected anxiety about the consequences of closures. On Reddit, some users connected the increase in liquidations with job insecurity, inflation and dissatisfaction with support for local businesses. Others argued that a wider experience of business failures could increase demands for reform.

Within affected industries, support has taken a more personal form, including messages for colleagues who have lost jobs and concern for businesses still operating under pressure. The response to Proof & Company's closure shows how the loss of one company can affect relationships across a wider trade.

Business owners face decisions about how much debt they can carry, how closely to monitor cash flow and how to adapt when customers spend less. Policymakers face the task of supporting entrepreneurship and innovation while addressing the needs of vulnerable workers and sectors. The next scheduled milestones for the liquidation proceedings and legal cases described here had not been specified as of August 1, 2025.

Key Points

• Courts ordered 187 companies to wind up in the first half of 2025, compared with 146 in 2024 and 95 in 2023.
• The 307 compulsory liquidations recorded across 2024 were the highest annual total since 2010.
• Higher borrowing costs, withdrawn pandemic support, expensive rents and weak demand are straining businesses.
• Food and beverage businesses recorded 1,404 closures and 1,964 openings in the first half of 2025.
• Proof & Company's closure cost 16 jobs; CCIC Singapore retrenched more than 300 employees following US sanctions.
• Some creditors recover as little as 10 percent of their claims, while workers face uncertainty over outstanding payments.
• Major recovery cases include a ruling for more than $900 million linked to Ng Yu Zhi and a $2.7 billion lawsuit involving companies connected to 1MDB.
• New business registrations continued to rise despite the increase in compulsory liquidations.