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The Singapore Government Equity Financing Schemes

posted Oct 28, 2012, 6:56 AM by Fide Consultant Group

To promote business growth, the Singapore Government provides various equity financing schemes, grants, and incentives for start-ups. 

Business Angels Scheme (BAS)
For every S$1 invested by Business Angel Funds under BAS, SPRING Singapore will match S$1, up to a maximum of S$1 million. The minimum investment per start-up by the Business Angel Fund must be at least S$75,000.
Related links:
www.edb.gov.sg
www.business.gov.sg
www.spring.gov.sg

SPRING SEEDS
Targeted at non-technology-based businesses, SPRING Singapore will match S$1 for every S$1 raised from private investors, up to a maximum of S$300,000 for this scheme. The minimum investment by private investors must be at least S$75,000.
Related links:
www.business.gov.sg
www.spring.gov.sg

Enterprise Fund
This scheme works in the form of financial participation from S$1 million to S$3 million, usually structured as convertible loans or debts with equity options with pre-defined repayment tenures.
Related links:
www.business.gov.sg
www.iesingapore.com

Growth Financing Programme (GFP)
Every S$2 raised from third party investors will be matched by S$1 from SPRING Singapore, up to a maximum of S$1 million. The minimum investment amount from third party investors must be S$500,000.
Related links:
www.spring.gov.sg
www.business.gov.sg


Grants


Patent Application Fund Plus (PAF Plus)
This grant is for the purpose of defraying the costs of patent application.
Related links:
www.edb.gov.sg
www.business.gov.sg

Innovation Development Scheme (IDS)
This grant helps to provide co-funding to support innovation in products, processes and applications.
Related link:
www.edb.gov.sg

Locally-based Enterprise Advancement Programme (LEAP)
This grant is to support multiplier companies in their own industries and enterprise development of Singapore-based companies.
Related link:
www.edb.gov.sg

Local Industry Upgrading Programme (LIUP)
This grant provides support for local suppliers to upgrade through collaborations with MNCs.
Related links:
www.edb.gov.sg 
www.business.gov.sg


Tax Incentives


Tax Exemption for Start-ups
Start-ups are granted tax exemption on the first S$100,000 of chargeable income (excluding Singapore franked dividends) for any of the first 3 consecutive years of tax assessment falling within Years of Assessment 2005 to 2009.
Related link:
www.business.gov.sg

Enterprise Investment Incentive Scheme (EII)
This scheme aims to help start-ups attract more investments as investors can deduct up to S$3 million of losses against their taxable income.
Related link:
www.spring.gov.sg

Pioneer Incentive (PC-M or PC-S)
Tax exemption on qualifying profits is granted up to 15 years for projects that result in the creation of new industries or the strategic expansion of existing industries in Singapore.
Related link:
www.edb.gov.sg

Industrial Exemption Factory Scheme
100% tax exemption for two years on dutiable raw materials for high-end industries is granted.
Related link:
www.business.gov.sg

Zero GST Warehouse Scheme
This scheme aims to improve a company’s cash flow by allowing a suspension of GST during storage of non-dutiable goods in licensed warehouses until they are released for local consumption.
Related link:
www.business.gov.sg

Investment Allowance (IA)
A tax incentive serving as a further capital allowance on qualifying equipment costs incurred within a set period will be given.
Related link:
www.edb.gov.sg

Development and Expansion Incentive (DEI)
This tax incentive provides preferential corporate tax rate on all qualifying profits above a pre- determined base, for a set period.
Related link:
www.edb.gov.sg

Licensed Warehouse Scheme (LWS)
The main advantage of this scheme is that duty and taxes (GST) are suspended in Licensed Warehouses until the imported dutiable goods are removed from the premises and enter the local market for consumption.
Related link:
www.business.gov.sg

Global Trader Programme (GTP)
The scheme provides companies with a concessionary tax rate of not more than 10% on offshore trading income from qualifying commodities and products.
Related link:
www.iesingapore.com

Double Deduction for Overseas Investment Development Expenditure (DD)
This scheme allows for double deduction of expenses that are not deducted under Section 14 of the Income Tax Act, and a further deduction of expenses (that are deductible under Section 14 of the Income Tax Act) against income of approved expenditure in activities to start or develop overseas investments. The maximum amount of eligible expenses allowed for deduction under this scheme is S$200,000 per approval.
Related links:
www.business.gov.sg
www.iesingapore.com

Overseas Investment Incentive (OII)
This scheme allows for deferment of taxable income for 2 years for any current year losses arising from an approved overseas investment during the first 3 years of the investment.
Related link:
www.iesingapore.com

Overseas Enterprise Incentive (OEI)
Tax exemption is given on qualifying income from approved overseas investments/projects for up to 10 years.
Related links:
www.business.gov.sg
www.iesingapore.com

Regional/International Headquarters Award (RHQ/IHQ)
Companies under this scheme can enjoy a customised package of tax incentives or grants including a concessionary tax rate of 15% on incremental qualifying income from abroad for 5 years.
Related links:
www.edb.gov.sg
www.business.gov.sg

Double Tax Deduction for Market Development (DTD)
This scheme allows for deduction of twice the level of approved expenses for approved projects against the company’s taxable income.
Related links:
www.business.gov.sg
www.iesingapore.com

Expansion Incentive for Partnerships (EIP)
Tax exemption is granted for 50% of the qualifying overseas income of professional services companies above a pre-determined base.
Related link:
www.edb.gov.sg


Supporting Programmes


Trade Credit Insurance (TCI) Programme
The scheme allows companies to obtain insurance for accounts receivables against non-payment at premium rates normally available to businesses with substantial trade volume, at average premium rates of 0.18% to 0.35%.
Related links:
www.business.gov.sg
www.iesingapore.com

Warehouse Retail Scheme
The scheme assists businesses to achieve savings and productivity gains from co-location of various functions in one centralised location.
Related link:
www.edb.gov.sg

International Partners Programme (iPartners)
The scheme promotes co-funding to defray a percentage of costs, and requires the alliance of a leading industry player with strong access to overseas markets, and at least 2 other companies with complementary services, products, capabilities or technology.
Related links:
www.business.gov.sg
www.iesingapore.com

Local Enterprise Technical Assistance Scheme (LETAS)
Companies will be given a subsidy of up to 50% of the cost of hiring external consultants to implement quality management and IT systems.
Related links:
www.business.gov.sg
www.spring.gov.sg 


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