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Singapore has earned a reputation as one of the most favoured countries to establish a business with not just in Asia but around the world. The city-state’s business ecosystem has flourished over the years as entrepreneurs flock to the country and make Singapore their new home for starting a business.

According to Business Registry Statistics of Accounting and Corporate Regulatory Authority (ACRA), business entities formed in the year 2021 were 65,438 despite the rise of the pandemic.

One of the main factors that make Singapore attractive to investors is the government-initiative policies that support local companies. To name a few, here is a list of schemes that will benefit local companies.    

 

1. Tax Exemption Scheme for New Start-Up Companies

Tax exemption is introduced by the Singapore government to support entrepreneurship and to grow local enterprises. It applies to qualifying companies for their first 3 consecutive Years of Assessment (YAs). From the fourth YA onwards, companies can enjoy the partial exemption.

The tax exemptions for qualifying companies for their first 3 consecutive YAs are as follows:

Chargeable income	% Exempted from Tax	Amount Exempted from Tax
First S$100,000	75%	S$  75,000
Next S$100,000	50%	S$  50,000

Who is eligible?

All new start-up companies are eligible for the tax exemption scheme, except:

• Companies whose principal activity is that of investment holding
• Companies that undertake property development for sale, investment, or both

The new start-up company must also:

1. Be incorporated in Singapore
2. Be a tax resident of Singapore for that YA
3. Have its total share capital beneficially held directly by no more than 20 shareholders throughout the basis period for that YA where:
   1. All the shareholders are individuals; or
   2. At least 1 shareholder is an individual holding at least 10% of the issued ordinary shares of the company

2. Government grants

Start-Up SG Founder (SSGF)

Overview

The Startup SG Founder grant supports innovative start-ups founded by first-time founders by providing mentorship and starting capital. Applicants must apply through one of Enterprise SG’s Accredited Mentor Partners (AMPs).

Who is eligible?

The following conditions must be met at the time of application and throughout the grant period of 12 months:

At least 2 Singapore citizens (SC) / Permanent residents (PR) who:

• Are first-time founders (i.e. have no Private Limited entity in ACRA)
• Are key decision-makers and contribute meaningfully to the company
• Are not employed externally and who can commit full-time to the Company
• Have undergone entrepreneurship training
• Hold equity in the Company with a minimum of 30% collectively

The Company must:

• Not have received funding from another government organization (for the same business idea)
• Not have received the SSGF grant before
• Have a minimum of 51% SC/PR shareholding
• Be registered as a private limited entity in Singapore for less than 6 months
• Invest in a co-matching amount of S$20,000 as paid-up capital on ACRA
• Not have a proposed business idea that falls under the list provided below:

Cafes, restaurants, nightclubs, lounges, bars, foot reflexology, massage parlours, gambling, prostitution, social escort services, employment agencies, and geomancy.

Startup SG Tech

Overview

The Startup SG Tech advances the development of proprietary technology solutions and brings about the growth of startups based on proprietary technology and a scalable business model. Through this grant, companies may obtain early-stage funding for the commercialization of proprietary technology.

Who is eligible?

Startup Companies

• Registered in Singapore within the past 10 years at the time of grant application;
• At least 30% local shareholdings;
• The company is not a subsidiary* of a corporate entity at the point of incorporation;
• The company’s group annual sales turnover is not more than $100 million or group employment size is not more than 200 workers; and
• Core R&D activities to be carried out in Singapore

Your solution must:

• Clearly demonstrate how science/technology is applied;
• Be of a breakthrough level of innovation (i.e. distinctly different or new technology which either (i) has the potential to disrupt an existing market; or (ii) to replace, or create, a new market/purpose/niche.);
• Lead to or build on proprietary know-how/IP;
• Be commercially viable.

Productivity Solutions Grant (PSG)

Overview

The Productivity Solutions Grant (PSG) supports companies who are keen on adopting IT solutions and equipment to enhance business processes. Eligible companies can receive up to 70% funding support for eligible costs.

PSG supports the adoption of pre-scoped IT solutions, equipment and consultancy services that improve productivity, aligned to the industry roadmaps such as the Industry Transformation Maps (ITMs) and Industry Digital Plans (IDPs).

Please contact us to know the list of supportable solutions that best suit your business needs.

Who is eligible?

Solutions supported by Enterprise Singapore (ESG) apply to local SMEs only.

To apply for PSG you must meet the following criteria:

1. The business entity is registered/incorporated in Singapore
2. The company does not fall under the following categories:

• Charities
• Institutions of Public Characters (IPCs)
• Religious Entities
• Voluntary Welfare Organisation (VWO)
• Government agencies
• Subsidiaries

3. At least 30% of the local shareholding is held directly or indirectly by Singaporean(s) / Singapore PR(s), determined by the ultimate individual ownership of the applicant.

4. Purchase/lease/subscription of the IT solutions or equipment must be used in Singapore

If you wish to adopt an ESG-supported solution, do also ensure that:

5. If you belong to a corporate group, your Company Group Annual Sales Turnover must be ≤ S$100 million, or your Company’s Group Employment Size must be ≤ 200 workers.

 

6. If you wish to adopt a solution package from a solution category that you had been approved for previously, it must be deployed to a different location.

Skills Future Entreprise Credit (SFEC)

The SkillsFuture Enterprise Credit (SFEC) encourages employers to invest in enterprise transformation and capabilities of their employees. Eligible employers will receive a one-off S$10,000 credit to cover up to 90% of out-of-pocket expenses on qualifying costs for supportable initiatives, over and above the support levels of existing schemes.

SFEC supports enterprise transformation and workforce transformation.

Employers will have to meet the eligibility criteria of the individual SFEC-supportable programmes before they can draw down the credit.

Contact us to learn more about government grants, subsidies, funding, tax deductions and many more.