Singapore is a world-leading destination to start and develop your business. Forbes ranks it #8, and for 2019 the World Bank has it at #2 for Ease of Doing Business and #3 for Starting a Business (see the full rankings). Through its unique combination of high-tech and infrastructure, a highly educated population, and a melting pot of cultures and business types, Singapore is a unique little powerhouse of an island nation.
Why is Singapore so appealing for small business and startups? A main factor for is the government’s role in supporting startups. It sees that lack of funding is a common reason startups fold, has introduced dozens of initiatives to help small- to medium-sized enterprises/businesses (SMEs/SMBs) gain access to funding.
Here are some of the most important government-funded financing schemes for your small business to take advantage of.
Productivity and Innovation Credit (PIC) Scheme
What is it?
Dispensed by the Inland Revenue Authority of Singapore (IRAS), the PIC scheme provides financial support to businesses to encourage them to make investments to boost productivity. Under the PIC Scheme, businesses can enjoy 400% tax deductions up to S$400,000, or 60% cash payouts of up to S$100,000 for investments in innovation and productivity improvements. The investments must be made in any one of the following six qualifying activities:
- Research and development
Want to embark on a major, innovative new project? Perhaps you have a product that needs to be improved, or an idea for a solution that the market needs and currently doesn’t have. As long as your project qualifies for R&D tax benefits, you can now take the plunge and execute your innovative ideas.
Enhance your employees’ skillsets by enrolling them in a course to learn basic coding or graphic design proficiency – for free. You can also use the PIC grant to pay for an external trainer’s fees, flight and accommodation costs, as well as the cost of meals and refreshments for the staff attending the training course.
PIC-approved equipment includes devices used for information technology. This includes smartphones, tablets and other computing devices such as laptops, routers and printers.
- Acquisition of intellectual property rights
If you need to pay to use a copyright or a patented technology as part of your business, you can now claim the expenses too. For example, using stock images to advertise your business would qualify as a claimable expense.
- Registration of patents and trademarks
Has your business created something original? You can protect your idea by registering a trademark, patent, design or plant varieties. The PIC grant will cover all expenses incurred for doing so.
- Design projects
If you’re developing a new website or mobile app for your company, you can choose to get a cash payout worth 60% of your costs or a 400% tax deduction. Approval for your design project must be obtained from the DesignSingapore Council before you can commence.
Investing in cloud computing technologies, such as Sansan’s business card management database, is also an eligible expense under the PIC scheme, so be sure to seize this opportunity to upgrade your business tools.
Your business is eligible if:
- You are carrying out active business operations in Singapore.
- The qualifying expenditure is incurred within a qualifying Year of Assessment.
How to apply:
Visit the IRAS page on the PIC scheme for more details on how to apply.
Capabilities Development Grant (CDG)
What is it?
Administered by the Infocomm Development Authority (IDA), the CDG is a financial assistance program to help your business build capabilities across 10 key business areas, from improving service standards to adopting new technologies, training and upgrading your staff skills. The grant defrays up to 70% of qualifying project costs to help upgrade your business and grow locally and globally.
Your business is eligible if:
- It is registered and operating in Singapore.
- It has a minimum of 30% local shareholding.
- Your group annual sales turnover is not more than S$100 million or you have no more than 200 employees under your entire group.
How to apply:
Visit the IDA page on the CDG grant for more details on how to apply.
iSPRINT (Increase SME Productivity with Infocomm Adoption & Transformation)
What is it?
iSPRINT is another project from the IDA which aims to encourage technological improvements in Singapore SMBs, in order to increase productivity and revenue, and create new business growth.
The project offers several grants, which offset up to 70% of the costs for adopting technological solutions, such as deploying high-speed internet connectivity or buying pre-packaged software such as customer relationship management programs. Up to 80% of the costs (capped at S$1 million per SMB) may also be sponsored for vendors who want to pioneer the use of new and scalable sector-specific solutions.
Your business is eligible if:
- It is registered or incorporated in Singapore.
- It has a minimum of 30% local shareholding.
- Your group annual sales turnover is not more than S$100 million or you have no more than 200 employees under your entire group.
How to apply:
Visit the IDA website to determine which iSPRINT grant to apply for, and for more details on how to do it.
Global Company Partnership (GCP) Grant
What is it?
Designed by International Enterprise (IE) Singapore, the program helps to develop customized solutions for businesses that want to enhance their chances of becoming globally competitive. The scheme supports a variety of activities under the areas of capability building, manpower development, accessing loans and capital, and accessing markets. Examples of these activities include branding, customized training programs, entering new markets and financing for internationalization activities.
Your business is eligible if:
- Your global headquarters are anchored in Singapore.
- You have an annual sales turnover of at least S$500,000 per annum based on the most recent audited report.
- You have a minimum paid-up capital of S$50,000.
The eligibility criteria for applying for financing differs based on the different schemes available. More information can be found in IE Singapore’s GCP Brochure.
How to apply:
There are several application procedures, depending on which scheme you’re applying for. More information can be found in the GCP brochure.
With the plethora of funding schemes available for small businesses in Singapore, it would be a shame not to take advantage of as many as possible to give your start-up the boost it needs.
