Incentives‌ ‌and‌ ‌Schemes‌ ‌for‌ ‌Businesses‌ ‌ in‌ ‌Singapore‌

The following schemes and incentives are offered in Singapore:

• Business Loans
• Tax Incentive Programs
• Cash Grants
• Startup Singapore Scheme
• Equity Financing

Let’s take a look at the details of the Singapore Government’s incentive and schemes for business houses.

A) Business Loans:

Singapore provides various incentive linked schemes when it comes to loans. Let’s have a look at them:

• Micro and Working Capital Loans for SMEs: 

SMEs with less than 10 employees can avail of a Micro Loan of S$100,000. This loan is to support their day-to-day and minimal long-term business operations. 

Eligible business houses can apply on the official website of SME Micro Loans. 

In addition to this, working capital loans of S$300,000 is available for Singapore SMEs. To apply for this loan, companies can apply on the official website of SME Working Capital Loan. 

• Loan Insurance Scheme (LIS): 

Companies applying for Loan Insurance Scheme or LIS have a certain part of the insurance premium, for trade finance loan, paid by the Singaporean Government. It helps companies to secure their trade finance loans. 

Along with that, the government will underwrite the loans that are way beyond the capacity of a business house. Companies can apply on the official website of LIS. 

B) Tax Incentive Programs:

Tax incentives schemes are one of the major programs for business houses to start their operations in a particular country. Let’s take a look at the different incentive programs:

Tax Incentives Schemes are provided for the following heads: 

• Startups: 

Newly incubated startups will receive a 75% tax exemption for the 1st S$100,000 of taxable income. In addition to this, 50% tax exemption on the next S$100,000 during the first 3 years of operations. 

• Investment Allowance: 

100% tax credit can be enjoyed by companies for their capital expenditures incurred for qualifying projects. Singaporean government provides the allowance for 5 years but it can extended up to eight years.

Qualifying projects fall under the following heads: 

• Production of new or existing products
• Specialized engineering or technical services based projects
• R&D Projects
• Water-based Projects
• Tourism-based Projects
• Space Projects
• Aviation Projects
• Energy Efficiency Projects

• Productivity and Innovation Credit (PIC) Scheme:

Companies are provided with a 400% tax deduction or allowance for certain kind of expenditures for the following activities:

• Employee training activities;
• Acquiring Intellectual Property Rights, Patents, Trademarks, Designs and Plant Varieties;
• R&D Projects; and
• Projects under the Design Singapore Council.

• Development and Expansion Incentive (DEI): 

A 10% tax incentive is provided to companies who plan to expand in Singapore. The expansion plans must be for projects in the growth industries. 

• Double Tax Deduction for Internationalization (DTDI): 

Tax deduction of 200% is given to companies who want to expand into international markets. They should conduct activities in the form of overseas trade fairs, business development trips, advertising, and others. 

C) Cash Grants: 

• Capability Development Grant (CDG): 

SMEs receive the Capability Development Grant or CDG for projects based on business stability. Under CDG, companies can receive up to 70% of the qualifying costs. The cost covers the major operations of the business house.

To apply for CDG, companies must register and operate in Singapore and have a 30% local shareholding. Along with that, the company’s annual revenue must be less than S$ 100 million and have a workforce of less than 200. 

• Financial Sector Technology and Innovation Proof of Concept (POC) Scheme: 

POC is a financial support system for finance and fintech companies. Under this scheme, eligible companies can receive 50-70% funding for the project cost, the maximum limit of which is S$200,000. 

• Business Improvement Fund (BIF): 

BIF is managed by the Singapore Tourism Board which supports the productivity and competitiveness of tourism companies in Singapore. Eligible companies must be willing to take up new projects based on tourism such as product development, financial management, increasing human resources, marketing strategies, and others. 

Under BIF, SMEs will receive up to 70% of the qualifying costs, while non-SMEs will receive up to 50% of qualifying cost.

• Market Readiness Assistance (MRA) Grant: 

SMEs shall receive the MRA funding up to 70% of its total cost, the maximum level of which is set at S$20,000. These must be activities that prepare the companies for foreign markets. 

D) Startup Singapore Scheme: 

Startup Singapore Scheme caters to the needs of the startup ecosystem under the following pointers: 

• Startup SG Founder: 

This scheme is developed under Standards, Productivity and Innovation Board (SPRING) for providing funding to new entrepreneurs with innovative business plans. Under the scheme, founders are provided up to S$30,000 by matching S$3 to every $1 raised by the startup. 

In addition to this, founders will receive mentorship and business guidance through an Accredited Mentorship Partner (AMP).

• Startup SG Tech:

Under this scheme, funding will be provided to companies for their technological development under both Proof-of-Concept (POC) and Proof-of-Value (POV). This helps candidates to develop solutions and generate a scalable business model.

• Startup SG Equity: 

Under this scheme, the Singaporean Government co-invests in a startup along with third-party investors. It aims at encouraging and stimulating private-sector investments for innovation-based start-ups. 

The co-investment ratio starts with 7:3 up to $250,000, which changes to 1:1 up to $2 million for general tech companies. For deep tech companies, the ratio is 7:3 up to $500,000, which changes to 1:1 up to $4 million. 

Most importantly, the government only invests if the 3rd party is willing to invest at least $50,000. 

• Startup SG Accelerator:

Under this scheme, financial and non-financial support are provided to incubators and accelerators who are working in strategic growth sectors. Funding is provided to support the operating expenses of the new startups. 

• Startup SG Talent:

Under this scheme, startups are assisted with EntrePass, T-UP and SME Talent Programme (STP). 

E) Equity Financing:

• Angel Investors Tax Deduction (AITD): 

AITD is a scheme for angel investors who can put in a minimum of S$100,000 in a qualifying startup. Under the scheme, approved angel investors enjoy tax deduction of 50% of the total investment at the end of a two year holding period. They can enjoy a maximum deduction of up to S$250,000.

• Early-Stage Venture Funding Scheme (EVFS): 

Under EVFS, run by the National Research Foundation (NFR) of Singapore, companies shall be provided funding up to S$10 million for investing in innovative startups. 

How to go forward?

So now you know why Singapore is considered one of the top business destinations in the world. 

Gear up to achieve your business dreams in a country that is not only famous for its aesthetic night skyline but also for providing the best opportunity for great business ideas.

How to do it?

Ocumen is geared up to provide top-notch solutions for IDEAS that create a great inroad for itself in the target market for the target audience.

With its business solutions, Ocumen will streamline your business processes, starting from documentation to incorporation. 

Hence, don’t miss out on these incentives and schemes that will reap you the biggest benefits in your entrepreneurial journey.