Are you looking for the best start-up schemes and grants in Singapore? Singapore has become the ultimate destination for start-ups to kick-start their projects. The island state has various financing schemes, cash grants, and tax incentives, and a plethora of business incubating infrastructures that every start-up company could use. As if this is not enough, the Singapore government has gone on a charm offensive to boost the country’s start-up ecosystem by rolling out more incentives.
With technology advancements disrupting every sector of the economy, governments across the world are creatively competing to attract talented entrepreneurs. Koh Poh Koon, the Minister of State for Trade and Industry announced the launch Startup SG in March 2017.
Startup SG is the brand umbrella that aims to unify all the support incentives that are made available to start-ups in Singapore. Essentially, Startup SG is a launch pad that provides entrepreneurs with a platform where they can access the locally available support incentives and to connect with the players on the global entrepreneurial network, as well as start-up schemes and grants in Singapore. Besides this, Startup SG provides a platform where you can access all the funding, grants, loans, and resources for enhancing the capability of your start-up.
The EntrePass work pass scheme has been revamped with the aim of facilitating the entry and stay of entrepreneurial talent into Singapore from across the globe. The EntrePass work pass scheme has already seen a significant increase in the number of expatriates coming into Singapore, for example, the number of expatriates grew from 22,000 in 2003 to 48,000 in 2015. With the government making funding and grants more accessible to start-ups, the number is expected to increase trifold in the coming decade.
Singapore has maintained a reputation all across the world for being one of the most start-up friendly countries. If you want to start and incorporate your company in Singapore, then you will love our exhaustive list of the available government incentives and support.
Top 13 Start-Up Schemes and Grants in Singapore
Startup SG
This platform caters to everything you may need as you start your start-up journey. It is one of the best platforms offering start-up schemes and grants in Singapore and can be categorised into six different pillars.
Startup SG Founder
This pillar provides first-time entrepreneurs who have innovative business ideas with start-up capital and mentorship opportunities. For every SGD 1 the entrepreneur raises, SPRING matches that with SGD 3.
There is also the Accredited Mentor Partners whose task is to qualify the applicants based on the uniqueness of a business concept, the strength of the management team, feasibility of the business model, and the potential market value.
Startup SG Tech
This pillar aims to provide early-stage funding to start-up companies for commercialising proprietary technology. It includes both Proof-of-Value (POV) and Proof-of-Concept (POC) grants which are dependent on the stage of development.
The grant is very competitive, and you need to know your numbers, market valuation, and so much more about your business to be eligible. The grant can be instrumental in fast-tracking the development of your proprietary solutions as well as in generating a scalable business model.
Startup SG Equity
This pillar is created in that the government co-invests in your start-up alongside third-party investors. It aims to encourage and stimulate the private sector investments into innovative tech start-ups based in Singapore that have the global market potential for their intellectual potential.
The co-investment ratio is 7:3 up to SGD 250,000 and 1:1 after that of up to SGD 2 million for general tech companies. For specialised tech companies, the co-investment is 7:3 up to SGD 500,000 and after that 1:1 investment cap of SGD 4 million. However, the government is only willing to enter into the co-investment structure if the third-party investors who can
- Put in at least SGD 50,000 each,
- Willing and able to offer the start-up management experience,
- Give the technical expertise required by the company
- Offer relevant business contacts.
SPRING SEEDS Capital (SSC) is the entity managing Startup SG Equity, and it will co-invest with independent investors in Singapore-based start-ups that are commercially viable and have innovative as well as strong intellectual content that has scalability potential in the global market.
Since the introduction of Startup SG, the SSC has already pledged SGD 100 million, which will be available to high-potential Singapore-based deep technology start-ups. They are also in search of co-investment partners in the domain areas of Advanced Manufacturing and Engineering (AME) and Health and Biomedical Sciences.
Startup SG Accelerator
This pillar offers incubators and accelerators in strategic growths sectors of the economy funding and non-financial support to further enhance their expertise and programs in nurturing success in start-ups.
The financial support includes funding for partial expenses such as the hiring of experts and mentors to guide the founding team, salaries for the incubation team, costs of developing the programs that will help start-ups obtain business financing, create new products and services, as well as improving market access for their products and services.
Startup SG Talent
This is the pillar that houses schemes such as T-UP, EntrePass, and SME Talent Program (STP) for start-ups.
T-UP, which is short for Technology for Enterprise Capability Upgrading, aims at helping businesses build in-house research and development capabilities by accessing talent pools from A*STAR’s Research Institutes.
EntrePass is a work pass scheme that facilitates the entry and the staying of global entrepreneurial talent in Singapore. The goal here is to try and supplement the nation’s local skill set and contribute to a progressively dynamic cutting edge start-up environment. It sponsors up to 70% of the temporary transfer expenses of research engineers and scientists for two years.
Action Community for Entrepreneurship (ACE) runs the SME Talent Program (STP) for Start-ups, where it gives a subsidiary of 70%in stipends paid to interns, and thus, helps the start-ups to build their human resource abilities.
Startup SG Loan
This scheme is offered by participating financial organizations, these are Government-backed loans, which give new businesses much-needed working capital, factory/equipment financing as well as trade financing.
The scheme loans include:
- SME Micro Loans – for start-ups with 10 or fewer representatives, this can get working capital financing of up to SGDS 100,000 to support their everyday business activities
- SME Venture Loan – for high-growth start-ups, with the ability to access alternative funding of up to SGD 5,000,000 for business enterprise extension
- SME Working Capital Loan – that was made available for the period between June 1, 2016, and May 31, 2019, new companies can get unsecured working capital financing of up to SGD 300,000 to help with their daily business operations
- SME Equipment and Factory Loans – start-ups can obtain financing of up to SGD 15 million to buy the required production equipment, machines, or industrial facility properties
While Startup SG provides a wide variety of start-up schemes and grants in Singapore, there are other schemes that will come in handy. They include:
Angel Investors Tax Deduction (AITD) scheme
This AITD scheme is for angel investors willing to put in at least SGD 100,000 in Singapore-based start-ups. The angel investor gets a tax deduction off 50% of their investment at the end of a two-year holding period. For every year, the qualified ventures will be subject to a cap of SGD 500,000, and thus the maximum tax deduction will be SGD 250,000.
Financial Sector Technology and Innovation (FSTI) Scheme
Singapore’s Momentary Authority is the entity behind this scheme in its aim to inspire the development of a vibrant innovation ecosystem with which the Authority has committed to issuing SGD 225 million over five years.
The plan is to draw in financial institutions to set up innovation labs in Singapore, bolster the building and enhancement of industry-wide innovation framework, and in addition to catalysing the improvement of innovative solutions.
FSTI has sub-scheme dubbed FSTI-Proof of Concept (POC). The MAS offers financial support of up to 50-70% of the costs, up to a maximum of SGD 200,000, for up to a year and a half. This is accessible to Financial Institutions (FIs) based in Singapore, and tech and solution providers working with Singapore-based FIs for early-stage development of innovative solutions that will alleviate the current problems in the financial sector.
Capabilities Development Grant (CDG)
This is a financial assistance program that is intended to help new companies and SMEs to build their capacities over ten key business areas. Companies use CDG to get financing of up to 70% of qualifying venture costs such as consultancy, certification, training, as well as software and equipment costs.
Companies must show that these activities will lead to process enhancement, increased productivity, product development, a transformation of the business model, improvement of human capital, and better market access.
Productivity and Innovation Credit (PIC)
PIC is an initiative launched and managed by the Inland Revenue Authority of Singapore, which enables businesses to enjoy 400% tax deductions up to SGD 400,000 or 60% cash pay-out up to SGD 100,000, for investing in innovation and productivity improvements.
The scheme has six activities with which recipients must undertake; research and development, training of employees, registration of IP, approved design projects, leasing of prescribed automation equipment, and the acquisition and in-licensing of IP.
Innovation and Capacity Voucher (ICV)
The application process for the voucher is easy to apply, and start-ups, as well as SMEs, get and an easy-to-use voucher worth SGD 5,000. Organizations can use the voucher to strengthen and upgrade their core business activities by consulting in the areas of financial management, human resources, innovation, and productivity. Each start-up/SME can have a maximum of eight vouchers, and they only have six months to undertake each project.
Early Stage Venture Fund (ESVF)
ESVF is managed by the National Framework for Innovation and Enterprise. Through ESVF, NRF donates SGD 10 million on a matching basis, to seed corporate investment (VC) funds that invest in early-stage high-tech companies based in Singapore. With that said, the VCs have the option of buying out NRF’s share of the fund in the company a lot of the reserve inside five years by restoring NRF’s capital with interest.
Business Improvement Fund (BIF)
The Business Improvement Fund is available to all Singapore-registered companies and businesses that are embarking on tourism based projects, and it is run by the Singapore Tourism Board (STB). It plans to support innovation development and technology adaptation, as well as the redesigning of business models and procedures in the tourism industry to enhance productivity and competition.
The funding support depends on STB’s assessment of the merits and scope of the project while the successful SME applicants get financial support of up to 70% of qualifying costs, while established business applicants get financing support of up to 50% of their costs.
Building Information Model (BIM) Fund
The BIM fund allows organizations to apply for financial support of up to SGD 30,000, with the aim of encouraging wider adoption of BIM corroboration in the construction industry by reducing the costs involved in consulting, software and hardware acquisitions, and human resource training.
With that said, if you have a company registered in Singapore and you want to explore new markets or increase your market capitalisation in the current market, International Enterprise (IE) Singapore has a suite of assistance programs that include
Double Tax Deduction for Internationalisation (DTDi)
Organizations looking to expand abroad can take advantage of the tax savings available through DTDi, which gives 200% tax deductions. The deductions are eligible for the expenses that are geared towards ensuring market expansion and the activities that increase investment for development.
Market Readiness Assistance (MRA) Grant
IE Singapore also has the MRA that give companies a grant of up to 70% of the third-party costs, which cover various activities such as, overseas market promotion and market set-up, as well as the identification of potential business partners.
Global Company Partnership Grant
The Global Company Partnership grant allows companies to settle the costs associated with their expansion projects abroad. This includes activities for projects such as market access, capacity building, and human resource development.
International Marketing Activities Programme (iMAP)
This scheme supports abroad business activities as well as Singapore Pavilions at international trade fairs. The companies who participate in iMAP accredited activities receive grants of between 50% and 70%of the eligible core expenses including booth construction, renting the exhibition space, as well as the fair or mission consultancy expenses.
Conclusion
There are additional benefits that are available to companies such as skilled human resources, intellectual property rights, reduced corporate tax rates, as well as good networking opportunities with emerging and developed markets across Asia.
Singapore is the ultimate country to start and scale up your company. In a little over a decade, we have helped set up thousands of business entities by providing stellar digital marketing services. Our team of multi-talented digital marketers will create robust digital marketing campaigns that will help your company get a strong footing in the country and succeed. Call us today at (65) 6789 9852 for more details about our services.
