Like small businesses, startups are essential components of a nation’s economy. With sustained economic growth, Singapore remains one of the best countries in Asia for startups. The country provides adequate infrastructure, financing schemes, cash grants, and tax incentives for startup businesses.
To show its commitment to the cause, the government of Singapore has since long ago created initiatives for startups to survive and thrive. Singapore’s government launched the Startup SG to ensure these startups have easy access to local support and quick connection to global networks. Startup SG brings together all available support schemes needed by new and existing startups.
To get you started as an incorporated startup in Singapore, this article examines some of the current schemes and grants available that you can take advantage of to support your business.
Grants and Schemes for Startups in Singapore
This is an umbrella body that manages different schemes. To help give insights into each scheme, we’ll examine them one after another.
Startup SG Founder (SSGF)
As the name suggests, this programme is designed to support and encourage entrepreneurs aspiring to launch their first startup. In addition, the programme provides mentorship and financial support services to startup entrepreneurs in Singapore.
Effective from June 1, 2022, new eligibility criteria were put in place. However, the application process remained the same. The programme’s mission was revised to:
- Make the programme more accessible for first-time entrepreneurs.
- Provide entrepreneurial training to ensure they are better prepared for a startup.
Startup SG Tech
This programme has been revised to ensure successful applicants can access cash flow easily. According to the revised criteria, effective from August 1, 2017, grants will be awarded upon completing stipulated milestones. In the past, this was done through reimbursement. The revision was necessary to help cultivate better financial discipline and a growth-oriented mindset consistent with venture-backed startups.
The programme remains competitive and offers its grant to support Proof-of-Concept (POC) and Proof-of-Value (POV) to commercialise innovative technologies. In addition, the programme offers the possibility of early-stage funding for the commercialisation of proprietary technology.
Proprietary technology, in this case, refers to a combination of processes, tools, or systems of interrelated connections, which may be derived from Research Institutes, Institutes of Higher Learning, or Public Health Institutes. Proprietary technology should ideally involve Intellectual Property (IP) or Intellectual Assets (IA) owned by the individual/startup.
However, the system integration of off-the-shelf components is not considered proprietary technology. In other words, to be considered proprietary technology, the entrepreneur would have to manufacture the hardware or software.
Startup SG Talent
This programme is designed to offer support for talent sourcing and international entrepreneurs. It also creates a more conducive environment for promising global talent to set up innovative businesses in Singapore and for startups to attract talent to be part of their team.
Startup SG Talent comprises six schemes. These include:
- Entrepreneur Pass (EntrePass)
- Technology for Enterprise Capability Upgrading (T-Up)
- Global Ready Talent Programme (GRT)
- Tech@SG Programme
- Global Tech Talent Alliance (GTTA)
- Innovation & Enterprise Fellowship Programme (IFP)
Startup SG Network
As an aspiring entrepreneur, having a good network can help create support. As such, Startup SG Network provides startups with access to Singapore’s tech startup ecosystem. The platform allows local tech startups to profile and put themselves on the radars of players in the local and global ecosystems, expanding their opportunities for business growth. Through Startup SG Network, companies can also easily discover avenues for government support.
Startup SG Accelerator
This programme is designed to support entrepreneurs in developing successful startups in the country. It pushes for startup success by providing access to international markets. The scheme may also help the in-market programmes designed by startup enablers.
The programme also helps provide global support for foreign startups to be incorporated in Singapore. Furthermore, it incentivises them by offering funding and non-financial support for these partners to further enhance their programmes and expertise in nurturing successful Singapore-based startups.
The programme’s funding support includes:
- Programmes to nurture startups
- Mentoring startups through the management and technical guidance
- Providing partial operating expenses for qualifying startups
Startup SG Infrastructure
Startup SG Infrastructure gives startups the spaces they require for development, experimentation, and growth.
The programme currently has three ongoing projects. They include:
- LaunchPad@Jurong Innovation District
- Singapore Water Exchange (SgWX)
Startup SG Loan
This pillar focuses on government-backed loans meant to generate growth opportunities for young businesses. In addition, the Enterprise Financing Scheme (EFS) was launched in 2019 to enhance the support provided and simplify current financing schemes.
The EFS covers these seven key areas:
- SME Working Capital
- SME Fixed Assets
- Venture Debt
- Green – Financing of Green Growth Projects
- Trade Loans
- Project Loans
- Mergers and Acquisitions (M&As)
Startup SG Equity
Under this scheme, the Singapore government co-invests in a startup along with third-party investors. It aims to encourage and stimulate private-sector investments into innovative, Singapore-based technology startups with intellectual property and international market potential. This pillar of Startup SG is managed by SPRING SEEDS Capital (SSC), which is the investment arm of SPRING Singapore, as well as SGInnovate, a private corporation owned by the government.
Startup SG Investor
The Startup SG Investor highlights tax incentives for individuals or fund management companies actively investing in startups or other Singapore companies.
Enterprise Development Grant (EDG)
The Enterprise Development Grant (EDG) helps Singapore companies grow and transform. For startups looking for support, this is an excellent scheme to get funding. This grant supports projects that help you upgrade your business, innovate or venture overseas under three pillars:
- Core Capabilities
- Market Access
- Innovation and Productivity
The VentureForGood (VFG) grant is a funding scheme under raiSE to support social enterprises in various stages of their business. New and existing social enterprises starting up or expanding their operations can apply for up to $300,000 in grants.
Financial Sector Technology and Innovation (FSTI) scheme
The FSTI scheme was launched by the Monetary Authority of Singapore (MAS) to support the development of a vibrant ecosystem for innovation. The scheme aims to provide significant benefits to startups.
- Attract financial institutions to set up their innovation labs in Singapore
- Support the building of industry-wide technology infrastructure
- Catalyse the development of innovative solutions
The scheme provides up to 70% of qualifying costs and up to a cap of $400,000, depending on the outcome of the panel’s evaluation. It has a funding duration of up to 18 months.
Productivity and Solutions Grant (PSG)
For a start, Productivity and Solutions Grant (PSG) covers sector-specific solutions, including the retail, food, logistics, precision engineering, construction, and landscaping industries. However, besides sector-specific solutions, PSG also supports adopting solutions that cut across sectors, such as customer management, data analytics, financial management, and inventory tracking.
From April 1, 2022, the maximum support level will be up to 70%. In addition, for eligible pre-scoped solutions, an enhanced support level of up to 80% will be extended from April 1, 2022, to March 31, 2023, for Food Services and Retail sectors.
These solutions have been pre-scoped by various government agencies such as Enterprise Singapore, National Environmental Agency (NEA), and Singapore Tourism Board (STB). ESG, for example, supports companies’ adoption of PSG solutions up to the annual grant cap of $30,000 per financial year.
Business Improvement Fund (BIF)
The BIF is designed for you if you’re a startup or an existing business incorporated in Singapore with tourism-based projects. The Singapore Tourism Board (STB) runs and supervises the fund. According to the STB, BIF is designed to encourage technology innovation and adoption and redesign business models and processes in the tourism sector to improve productivity and competitiveness.
Startups with projects centred around tourism do not automatically qualify for the fund. Funding support is awarded based on STB’s evaluation of the scope and merits of the project and varies according to SMEs and non-SMEs.
Double Tax Deduction for Internationalisation (DTDi)
Growth is an integral part of a business. For startups and existing businesses looking to expand overseas, keying into the benefits of DTDi is a great way to enjoy tax incentives. The scheme offers as much as a 200% tax deduction, but only on investments and expenses for internal growth deemed eligible.
Companies planning to expand overseas can benefit from the Double Tax Deduction Scheme for Internationalisation (DTDi), with a 200% tax deduction on eligible expenses for international market expansion and investment development activities.
DTDi supports activities across key stages of a company’s overseas growth journey, including:
- Market preparation
- Market exploration
- Market promotion
- Market presence
You can also automatically claim up to a 200% tax deduction on the first $150,000 of qualifying expenses for any of these activities without needing the approval of Enterprise Singapore:
- Local trade fairs
- Overseas trade fairs
- Virtual trade fairs
- Overseas market development trips/missions
- Overseas investment study trips/missions
- Product/service certification
- Overseas advertising and promotional campaigns
- Design of packaging for overseas markets
- Advertising in an approved local trade publication
Market Readiness Assistance (MRA) Grant
Small and medium enterprises (SMEs) will receive an international boost with the Market Readiness Assistance (MRA) grant to help take your business overseas.
Eligible SMEs will receive the following support:
- Up to 70% of eligible costs, capped at S$100,000 per company per new market from April 1, 2020, to March 31, 2023, it’ll cover:
- Overseas market promotion (capped at S$20,000)
- Overseas business development (capped at S$50,000)
- Overseas market set-up (capped at S$30,000)
- Each application is limited to one activity in a single overseas market ( market entry or participation in a trade fair)
The grant will continue to deliver up to 70% support until March 31, 2023.
Apart from all these grants and schemes, startups in Singapore also receive a lot of tax benefits.
Singapore remains dedicated to the growth of its economy by providing an enabling environment for startups. Singapore’s government understands aspiring entrepreneurs need adequate mentoring and financing support and has provided several grants and schemes. While many of them are subject to change, this article highlights and discusses some of their current eligibility requirements and objectives.
If you are planning to incorporate your business in Singapore, don’t forget to engage a knowledgeable company incorporation service provider. They will not only help you with the incorporation but will be able to guide you on all the lucrative grants and schemes you are eligible for.