Singapore is a very business friendly country due to its huge grants and incentives available in the Singapore business. There are six grants that businesses can look upto to grow in their respective fields.
1.Productivity Solutions Grant
The Productivity Solutions Grant (PSG) came into effect on 1 April 2018. It was established to encourage the adoption of digital productivity solutions among Singapore businesses. Currently, the PSG funds up to 70% of the costs for qualifying activities under these sectors:
- Precision Engineering
Businesses can also apply for the PSG to support the use of solutions in the areas of customer management, data analytics, financial management and inventory tracking. The PSG combines three existing productivity schemes: Innovation and Capability Voucher, the Landscape Productivity Grant and the SME Go Digital Programme, into one channel.
To qualify for PSG
- a company needs to be registered and operating in Singapore
- the solutions that are purchased, leased or subscribed must be used within Singapore
- the company needs to have 30% local shareholding.
Benefit from PSG
Due to size and resource constraints, it takes a longer time for Singapore SMEs to scale up, and more importantly, expand their operations beyond the country’s borders, The PSG supports smaller Singapore businesses and SMEs by making funding and support more readily available to them.
- Enterprise Development Grant
The Enterprise Development Grant (EDG) aims to support Singapore businesses in three key areas:
- Market and business development
- Innovation and productivity
- Core functions and capability
The EDG combines Capability Development Grant (CDG) and the Global Company Partnership Scheme. Singapore-based SMEs can enjoy up to 70% of funding support, while non-SME Singapore businesses can enjoy up to 50% of funding support. For non-SMEs in particular, the new rates signify a significant raise of 20% from comparable support offered under the CDG.
To qualify for EDG
- a SME must be registered and operating in Singapore
- have at least 30% local shareholding,
- have a group annual sales turnover of less than S$100 million or less than 200 employees.
Benefits of EDG
The EDG helps new businesses to innovate new ideas into their business and for already established business EDG offers support for expansion. The EDG enables and incentivises Singapore businesses to enjoy higher savings while focusing on business and capability growth efforts
The new PACT scheme came into effect from April 2018 to support businesses of all sizes. This encourages small and medium sized businesses to partner with eachother to innovate and grow.
PACT collaborations are led by one company (known as a Lead Enterprise) whose job is to drive projects that benefit all collaborating parties. These projects go beyond business activities (such as providing services) and include areas such as:
- Capability development, or upgrading the technology capabilities of suppliers, co-development and test-bedding of supplier products, and knowledge transfer (such as training programmes) between companies to develop innovation expertise
- Alliances, consortium’s, and shared resources (or shared service centres)
The new PACT scheme combines four existing partnership programmes: EDB’s and Spring’s respective Partnerships for Capability Transformation schemes, Spring’s Collaborative Industry Projects; and IE Singapore’s Global Company Partnership Grant. It funds up to 70% of qualifying costs for SMEs and 50% for non-SMEs.
To qualify for PACT
- Companies acting as Lead Enterprises in PACT projects need to be registered in Singapore – either as a local company or a multi-national corporation
- As for participating companies, they can be either local or foreign, with local projects given a majority in individual PACT projects.
Benefits from PACT
Smaller companies can benefit from the network and experience of larger companies, while larger enterprises can benefit from the nimbleness and agility of smaller businesses. SMEs need not stop at local growth though – internationalisation is important for Singapore SMEs to remain competitive and sustainable.
4.Double Tax Deduction for Internationalisation
The Double Tax Deduction for Internationalisation (DTDi) initiative was established to encourage international expansion and internationalization in the Singapore business.
Under this scheme, Singapore business carrying out overseas business activities are entitled to a 200% tax deduction upto $150,000. The activities are limited to the following;
- Overseas business development trips
- Overseas trade fairs
- Market surveys and feasibility studies
- Investment feasibility and due diligence studies
- Overseas advertising or promotional campaigns
- Expenses of Singaporean staff posted to overseas entities
To qualify for DTDi
1.Need to be registered in Singapore and primarily deal with goods and services.
- Foreign businesses who have their global headquarters in Singapore and intend to internationalize will also be considered on a case-by-case basis.
Benefits from DTDi
DTDi helps in reducing the tax burden and have more money in hand to engage in higher value internationalization and expansion activities.
5.Market Readiness Assistance (MRA) Grant
MRA grant was established to help SME’s access overseas opportunities. Initially set at 50% of funding support for qualifying activities, the support for the MRA was increased to 70% from 2015 to 2018. Under the extended MRA, the 70% support will be maintained from 1 April 2018 until 31 March 2020.
The MRA grant supports the costs for Singaporean businesses that are exploring overseas markets in three main areas:
- Overseas market set-up – legal and documentation expense
- Identification of overseas market partners – licensees, franchisees, agents, distributors and joint venture partner
- Overseas market promotion – marketing and PR activities, space rentals or booths at overseas trade shows
- companies need to have their global headquarters anchored in Singapore
- a group annual turnover not exceeding S$100 million or less than 200 employees.
Benefits from MRA
It helps in conducting market research in the countries they are expanding to as well as take advantage of the digital business promotional channels which are typically costly.
6.Venture Debt Programme(VDP)
VDP enabled SME’s to access loans upto $5 million for working capital, asset financing, project financing and mergers & acquisitions purposes. The VDP was structured with small Singapore businesses in mind: to be eligible for the loan.
- businesses needed at least 30% local ownership
- less than 200 employees
- Additional eligibility requirements may be imposed by local banks participating in the programme
Benefits from VDP
The VDP helps Singapore businesses access sources of capital quickly to set up and expand their business.
Singapore government has always been very supportive of SMEs, in the form of providing Singapore SME grants.Singapore is the most competitive economy and it is ranked at # 2 by World bank for ease of doing business. In Singapore, you can turn your ideas into businesses with ease. Simply stated, Singapore is the easiest place in the world to set up and manage a business.