Singapore has one of the most ideal and attractive business environments in the world. The Government actively supports entrepreneurs, start-ups, and investors by providing tax exemption schemes for start-ups to making company incorporation process easier, offering financial grants for new businesses, and non-financial support in terms of training, management, equipment upgrade and other programs to improve business efficiency and productivity, and many more.
If you are considering starting a business in Singapore, you may read through our guide: How to Register a Company in Singapore.
The following are some of the grants and assistance schemes offered by the Government to help foreign and local start-ups and SMEs start, operate, and grow in Singapore.
1. Partnerships for Capability Transformation (PACT)
Partnerships for Capability Transformation (PACT) promotes mutually-beneficial partnerships and cooperation between Large Organisations (LOs) and small and medium-sized enterprises (SMEs). PACT supports these three types of partnership:
• Partner Development: Capability upgrade for either new or existing suppliers of Large Organisation.
• Knowledge Transfer: Large Organisation transferring knowledge to at least one SME.
• Co-innovation: Development of innovative solutions between Large Organisations and SMEs.
How can you benefit?
Through this initiative, selected qualified SMEs and startups will have access to projects aimed at upgrading areas of capability development, overall productivity, and opportunities in forming innovative solutions or products. Projects that are approved by SPRING Singapore will be provided with partial funding support of up to seventy percent (70%) of qualifying development expenses.
Who can apply?
Large Organisations (LO) that generate sales revenue of more than S$100 million can apply for the grant. SMEs must be incorporated and have a physical presence in Singapore with at least 30% shareholding and either have a Group Annual Sales below S$100 million OR group employee size of up to 200 employees.
Examples of qualifying development costs:
Some of the qualifying development that SPRING can cover include manpower-related costs, professional services, technical support services, acquisition of Intellectual Property, prototyping related services, and costs incurred for equipment, materials, software and consumables.
How to Apply?
Large Organisations may express interest by contacting SPRING Singapore by phone +65 6898 1800 or email at enterpriseone@spring.gov.sg
2. Productivity and Innovation Credit (PIC) Scheme
The PIC Scheme aims to encourage SMEs to improve innovation and productivity within the business. SMEs that invest in the qualifying productivity and innovation activities defined by the Inland Revenue Authority of Singapore (IRAS) can enjoy tax deductions or cash payouts.
How can you benefit?
The tax deduction scheme is available to enterprises until Year of Assessment (YA) 2018. SMEs in Singapore may enjoy a PIC bonus or a dollar-for-dollar matching cash out until YA 2015.
Six Qualifying Productivity and Innovation Activities
√ Acquiring and rental of prescribed and approved PIC Information Technology and Automation Equipment.
√ Attainment and In-licensing of Intellectual Property Rights.
√ Design Singapore Council-approved design projects.
√ Research and Development Activities.
√ Registering patents, designs, plant varieties and trademarks.
√ Training of employees in different fields.
Tax Deductions or Allowances
Up to 400% tax deductions/allowances on up to S$400,000 of annual expenses incurred for any of the six (6) qualifying activities mentioned above. The tax deductions or allowances may be claimed when SMEs file their income tax return on the filing due date of the corresponding YA. Sole proprietorships and partnerships must file by April 15 while companies must file by November 30.
Cash Payout Option
The payout option aims to help cash-strapped SMEs to continue innovating and improving productivity within the business. Instead of tax incentives, they have the option to convert qualifying expenditure into a cash payout. This option is available until Year of Assessment 2015.
Eligible enterprises may convert up to S$100,000 of its total expenditure in all of the six (6) qualifying activities to non-taxable cash payout for each Year of Assessment. The rate is at 60% of the total expense incurred. For each application, the minimum qualifying expenditure is S$400. Any expenditure that has been converted into cash can no longer be claimed as tax deductions or allowances.
Who can apply?
Make sure that the activities fit in the qualifying activities mentioned below before making a PIC claim. Partnership, Sole-Proprietorship or Company that satisfy the following requirements may apply:
• Must incur the required qualifying expenditure and must be entitled to PIC during the qualifying YA.
• Must be actively operating in Singapore.
• Must have at least 3 local employees (either Singapore citizens or Permanent Residents) who are actively giving their respective CPF contributions. Sole-proprietorship, partners and shareholders who are also directors are excluded from this particular condition. Any individual deployed under a centralized hiring arrangement shall be considered as employees of the business as long as the claimant is able to provide supporting documents on the recharging of employment costs by a related entity, in respect of employees working solely in the claimant’s entity.
How to apply?
SMEs that choose to apply for cash payout must accomplish the new PIC Cash Payout Application form online. The printed and signed original document must be submitted to IRAS. For Year of Assessment 2015, eligible enterprises may either submit their applications at the end of each quarter or combined consecutive quarters in the business’ financial year. Note that applications should not be submitted later than income tax return filing due date.
IMPORTANT UPDATE: The Budget 2016 has highlighted the government’s goal to shift from broad-based support to a more targeted, sectoral-focused initiatives. In line with this, changes to the PIC scheme will be implemented. The cash payout will be lowered from 60% to 40% for any qualifying expenses that have been incurred on or after the 1st of August 2016. The government has also extended the PIC scheme up to YA 2018. After which, the programme will expire.
3. SPRING Startup Enterprise Development Scheme (SPRING SEEDS)
SPRING SEEDS seeks to encourage private sectors to invest in early stage start-ups with innovative services or products that can cater to international markets.
How can you benefit?
The scheme offers qualifying start-ups with a dollar for every dollar invested by private sectors. The investment is capped at S$1,000,000.
Who can apply?
• The start-up must be a Private Limited Company incorporated in Singapore for not more than five (5) years.
• Conducts its core activities in Singapore.
• Has a paid-up capital of at least
How to apply?
Interested parties are required to attend SPRING SEEDS briefing held in SPRING Singapore. To join a scheduled briefing and reserve a seat, e-mail SEEDS@spring.gov.sg with “Registration for SEEDS Briefing” as the header. Ensure that the attendees’ company name, title, and contact details are included in the said e-mail.
4. Innovation & Capability Voucher (ICV)
The Innovation & Capability Voucher (ICV) aims to hearten SMES to boost their business’ productivity and efficiency.
How can you benefit?
Qualified SMEs can apply for a capability development voucher valued at S$5000. The voucher can be used in either productivity solutions or consultancy projects. Take note that the productivity solutions covered include Equipment & Hardware, Technical Solutions & Training, and Design & Renovation. On the other hand, consultancy projects that are covered by ICV must be related to Innovation, Productivity, Human Resources, and Financial Management.
Who can apply?
Interested small and medium-sized enterprises must:
• Be registered in Singapore
• Have at least 30% local shareholding
• Have a Group Annual Sales that does not exceed S$100 million or group employment size that does not exceed 200 employees
How to apply for Consultancy Projects?
Step #1: Make sure to read and review the list of services that can be covered by ICV. After choosing a service included in the list, the SME must select a participating service provider to work with. The service provider to execute the proposed project before the SME applies for the voucher.
Step #2: Complete and submit an application through ICV Online Portal.
Step #3: Once the project has been accomplished, both the SME and service provider must endorse the project report prior to its submission to SPRING.
How to apply for Productivity Solutions?
Step #1: Complete and submit an application through ICV Online Portal. Note that each application requires SMEs to justify how the business sales or productivity will be improved by implementing chosen solution.
Step #2: The SME will receive an e-mail notification as soon as the application is approved. This serves as a go-signal for the SME to purchase approved item or solution.
What are the documents required when applying for ICV?
• ACRA Business Profile that must be dated within six (6) months prior to the ICV application date.
• Quotation of all listed solution along with a detailed breakdown of item or items including cost components (quantity, service provider, cost of items).
• For design and renovation solutions, SME must provide clear scanned images of the pre-renovation areas.
• For technical and training-related solutions, SME will be required to submit the following:
– Training Schedule
– Name of Trainer
– Name of Trainees
5. Capability Development Grant (CDG)
The Capability Development Grant (CDG) facilitated by SPRING Singapore is part of the government’s efforts in heartening SMEs to progress in terms of productivity. It is similar to ICV but on a bigger scale, CDG is a funding assistance scheme that covers a full spectrum of capability improvement schemes that allow SMEs to be more competitive and equipped for faster growth not only locally but also, globally.
How can you benefit?
Through CDG, qualified SMEs can enjoy up to 70% of costs for qualified projects like employee training, business consultancy, skills certification, and equipment upgrade costs.
Who can apply?
Interested small and medium-sized enterprises must:
• Be registered in Singapore
• Have at least 30% local shareholding
• Have a group annual sales that do not exceed S$100 million or group employment size that does not exceed 200 employees.
How to apply?
The application process is divided into three parts: pre-application, application, and post-application. The following will guide you in what you need to prepare before, during and after your CDG application.
Pre-Application
Before applying for the grant, the interested SME must ensure its eligibility for the grant and pinpoint its chosen area of development. The area of development must be relevant to the proposed project. The grant only covers projects that have not commenced yet. Below are the documents that must be prepared and included in the application:
– Most recent ACRA Search or Instant Information
– Most recent Audited and Consolidated Financial Statements
– Comprehensive Project Proposal
– Project Cost Proof of Quotation
For all projects except for Human Capital Development and Leadership Development, information for job creation and quantitative impact must also be furnished to SPRING.
Application Proper
SPRING published a Grant Portal Access Rights Guide in order to educate applicants on who within the company is eligible to submit the grant application. The application may be submitted online at the SPRING Grant Portal and usually takes about twenty (20) minutes to fill out all required information.
Post-Application
Once the application has been submitted, receipt of the application will be acknowledged by one of SPRING Officers through getting in touch with the company representative. Depending on the circumstances, the applicant may be asked to provide more information about the project and the company in a scheduled meeting, revise the application should the previously submitted documents are incomplete, and make available both present and projected indicators of productivity relevant to the proposed project. The application process will be assessed by SPRING based on the specific needs of the SME and scope of the project. SPRING also looks at how competent and effective is the service provider in enhancing the capabilities of the SME based on the areas outlined above.
A Letter of Offer will be provided to successful applicants through the SPRING Grant Portal. Note that in the implementation period of the project, the grantee must maintain all records that are relevant to the project such as timeline, scope of project, progress report, and the like. More importantly, all the records of financial transactions relating to the project including receipts or invoices must be properly kept.
For more information about the above grants and assistance offers by the government, please visit the website of respective agencies processing each project.
