Tighter rules accelerate corporate services consolidation

Recurring revenue and fragmented ownership are drawing larger platforms and private capital.

Singapore’s smaller corporate service firms face a heavier operating burden as regulatory requirements remain broadly similar regardless of firm size.

Eldred Wee, Co-founder of the Corporate Service Providers Network and M&A Adviser at Edenity, said firms with three to 10 staff often lack the dedicated compliance resources available to larger operators.

“Whether you are a three-person firm or a 30-person firm, compliance is still the same,” Wee said.

That burden is one reason some long-established owners are considering a sale rather than further investment. Wee said succession planning is another factor, particularly for founders who have built profitable firms but lack a clear next-generation ownership plan.

Talent shortages are also adding pressure, with smaller firms competing for staff while accounting roles evolve beyond traditional bookkeeping. The sector’s fragmented structure is making it more attractive to larger platforms and private capital.

Wee said recurring income and sticky client relationships support the investment case, while larger firms can spread compliance costs across a broader base and command higher valuations.

That creates scope for acquisitions that move smaller operators into larger groups. AI could improve efficiency, but Wee said it also raises the capability bar for staff. Accountants increasingly need to move into higher-value accounting and advisory work as routine tasks become more automated.

Private equity has already backed larger corporate service firms in the US and UK, Wee said, with similar interest moving into Singapore and Hong Kong.

For smaller firms, the commercial question is whether to keep investing in compliance, talent and technology independently or join larger platforms with greater scale.