New Schemes for Singapore Startups

When you think about incorporating your business in Singapore, you would look into different aspects such as tax benefits, less politicization, lesser compliance burdens, and government incentives. All of this is offered in Singapore along with incubation for business, infrastructural facilities, cash grants, tax incentives, and cross-border arrangements. All these clubbed together would add to the list of new schemes for Singapore startups.

The government of Singapore main objective was to make Singapore the best places for startups to thrive. For this, the government brought out a thriving start-up ecosystem in Singapore. New Schemes for Singapore Startups have been launched with a prime focus on the development of the start-up environment.

Evolution of Startups in Singapore- New Schemes for Singapore Startups

Along with industrialization, different startups were set up in Singapore. The government’s main intention was to develop incentives for start-ups to set up shop in Singapore. As per a report produced by Genome (Start-up), Singapore is ranked in the top twenty places in the world for technology start-ups. In 2000, there were about 20,000 start-ups in Singapore. This figure has changed adding more than 50,000 start-ups post 2015.

Looking at this, the government of Singapore brought out new schemes for Singapore startups. The main objectives of these schemes is to increase the number of start-ups not just at a local level but at an international level. These schemes allowed international start-ups to set footprints in Singapore to revolutionize the industry with different products.

One of the prominent schemes launched by the Government of Singapore is the Start-up SG Scheme which was launched in 2017 under the leadership of Mr. Koh Poh Koon, Minister of State for Trade and Industry. Ever since then the government has brought out more schemes to attract start-ups in Singapore.

Types of New Schemes for Singapore Startups

Let us look into the types of schemes offered by the government of Singapore. The following are the schemes offered in Singapore for start-ups:

1. Start-up SG Scheme 

This is one of the prominent scheme which was launched in Singapore to encourage more start-ups to incorporate. Under this umbrella scheme, there are various schemes that startups can adopt in Singapore. The following are the schemes under Startup SG Scheme:

• Startup SG Founder Scheme- This scheme is specifically meant only for first time founders and entrepreneurs who have an innovative idea. Under this scheme, the government provides capital infusion and opportunities which encourage training and development of innovative ideas. Innovative ideas include technology, artificial intelligence, manufacturing, biosciences and other industries. This scheme is a part of the SPRING Startup initiative in Singapore. For every SG$ 1 raised by the entrepreneur, SG$ 3 would be provided by the government under this scheme. A partner would be appointed under this scheme to mentor and choose eligible start-ups.

• Startup SG Technology- In Singapore there are more than 4000+ technology start-ups coming out with innovative products. Seeing this, the government brought out this scheme. This scheme is only available for startups which have some form of commercial technology. Only fast-track technology would be considered under this scheme.

• Startup SG Equity- This scheme would only be provided if there is a funding third party. The rest of the capital infusion would be provided by the government of Singapore. Hence funding under this scheme is made in the ratio of a sharing basis. This scheme covers start-ups which have the potential to reach global markets. There are two types of schemes under Startup SG Equity:
  
  • Usual Technology Companies- Under this scheme, the funding ratio is 7:3 and the funding cap is SG$ 250,000. Up to SG$ 2 Million can be provided under this scheme on a 1:1 basis.
  • Deep Technology AI-Enabled Startups- Under this scheme, the funding ratio is 7:3 and the funding cap is SG$ 500,000. Up to SG$ 4 Million can be provided under this scheme under a 1:1 basis.

The above scheme is managed and developed under SPRING Seed Capital (SSC). SSC main focus covers areas that include manufacturing, biosciences, healthcare, and artificial intelligence.

• Startup SG Accelerator- As the name goes, this scheme is made for increasing the amount of funding provided by incubators for start-ups. This scheme is for institutions in funding as well as non-funding sectors. The main aim is to improve industries dealing in strategic growth.

• Startup SG Talent- This scheme was brought about to increase the talent across start-ups in Singapore. There are different sub-schemes under this scheme:
  
  • Entrepass Scheme- This scheme was implemented in order to increase the amount of global talent that works in Singapore.
  • T-UP Scheme- This scheme was brought out to increase technology, machine learning and other activities. This scheme is for sectors such as Research and Development and IT sourcing. Subsidies for qualifying amount up to 70% for two years are provided for engineering programs.
  • SME Talent for Start-ups- Under this scheme, the main focus is given to increase talent across SMEs.
    
    
• Startup SG Loan Scheme-  This scheme is mainly for financial and banking institutions to increase the amount of capital infusion in start-ups. Along with this, the main motive is to increase government financing. SME micro loans are provided to eligible start-ups.

2. Angel Investors Tax Deduction (AITD) Scheme

As the name says, the above scheme is only for angel investors who infuse capital in start-ups. Only approved investors are covered under this scheme. The qualifying amount of capital investment is SG$ 100,000. Tax deduction of 50% is allowed at the end of two years. There is a maximum cap on the amount of deduction applicable.

3. Financial Sector Technology and Innovation (FSTI) MAS

This scheme was developed by the Monetary Authority of Singapore (MAS). Only technology and innovation companies involved in financial and banking technology are covered under this scheme. Under this scheme an amount of SG$ 225 Million covers start-ups for a five year period. Along with this, there is also a proof of concept (POC) scheme. Approximately 50 to 70% would be applicable for deduction on qualifying costs. SG$ 200,000 would be available for financial companies for a period of 18 months under this scheme.

4. Productivity and Innovative Credit Scheme (PIC)

The PIC scheme is for any company that is involved in innovation and productivity in Singapore. This scheme is not only introduced for start-ups but also other business structures utilize this scheme.

5. Innovative and Capability Voucher Scheme (ICV)

Under New Schemes for Singapore Startups, this scheme provide vouchers to startups. The value of the voucher is SG$ 5,000. Only eight vouchers can be issued to a start-up for a project for 6 months. Under new schemes for Singapore startups the value of this scheme is quite limited.

6. Business Improvement Fund Scheme (BIF) 

The government has also brought out new schemes for Singapore startups in the tourism sector.  Such new schemes for Singapore startups provide funding options for technology-based companies engaged in the Tourism sector. For SMEs, funding support of 70% is allowed on costs and non-SMEs funding support of 50% is allowed on costs.

7. Early Stage Venture Fund Scheme (ESVF)

This scheme under New Schemes for Singapore startups has been brought about by the National Framework for Innovation and Enterprise. An investment of SG$ 10 million is made on high-growth technology companies by the National Framework for Innovation and Enterprise.

8. Capabilities Development Grant Scheme

Under new schemes for Singapore startups, this scheme is only for development of capabilities across ten different sectors. Funding support of 70% is allowed on costs on human resources, consultation, software development, technology, and equipment.

Which Scheme is ideal amongst New Schemes for Singapore Startups?

The government of Singapore has offered new schemes for Singapore Startups. As such these schemes are applicable for all domestic as well as international startups. There is no definite scheme which provides all the benefits.

In order to choose a specific scheme, it would be crucial to look into the eligibility criteria and facilities offered in each scheme.  If you are in a specific sector, then choose the scheme which is favorable for your sector.

Conclusion

The government of Singapore has offered new schemes for Singapore startups. This has been introduced in order to attract more startups to Singapore. These schemes are developed and launched to improve the start-up ecosystem in Singapore. At ScaleX, we understand the needs of your start-up. 

If you are interested in obtaining more information on new schemes for Singapore Startups then you can contact us and set a free consultation.