The Government of Singapore Encourages Investors to Open a Small Business in Their Country by Providing Singapore Government Grant
A huge part of the business-friendly regime in Singapore is because of the many grants and incentives they have available. Ever since incentives and Singapore government grant has been rolled out or expanded together with the yearly budget announcement. It is the same for this year. There is an addition of new grants and the existing ones have expanded for the improvement of capabilities, internationalization, and manpower in Singapore. Here are the grants that businesses can consider:
Productivity Solutions Grant (PSG)
The effectivity of this grant came on April 1, 2018. It intends to urge digital productivity solutions adoption among the businesses in Singapore. As of today, the PSG funds account for up to 70% of costs that qualify activities under retail, logistics, food, wholesale, precision engineering, construction, and landscaping.
Businesses are allowed to apply for PSG support if they will use it for the areas of data analytics, customer management, inventory tracking, and financial management. The PSG has expanded in covering more sectors like tourism, professional services, and agriculture in the near future.
There are combinations of PSG companies with three productivity schemes and enables businesses in Singapore to get access to digital productivity solutions. This is useful for scaling and upgrading of business capabilities.
For a company to qualify for this grant, it needs to have its registration and operation in Singapore. There are purchased, subscribed, or leased solutions that are useful within Singapore. To have selected solutions, 30% local shareholding must be owned by the company.
Enterprise Development Grants
The Enterprise Development Grant is for small businesses that need financial assistance and also to startups. This grant helps small and medium enterprises in building innovation and productivity, core capabilities, and market access with corresponding areas. The SMEs in Singapore can get 70% of government grants to support the costs of projects that qualify.
EDG is for helping companies in Singapore change and grows their business for the global market and future. Therefore, you can see it as a progression from internal core capabilities development, innovation, productivity growth, and overseas expansion.
Market Readiness Assistance Grant
This was first introduced in 2013 and it is intended for Singapore enterprises to access opportunities overseas. It is set at funding support of 50% to make qualifying activities happen. The MRA support had an increase of 70% which can be maintained from April 1, 2018, up to March 31, 2020. The MRA grant is supporting Singapore business costs that explore overseas markets in setting up, identifying market partners, and market promotion.
In order for a company to qualify for MRA grant, these companies must have global headquarters rooted in Singapore. Also, they should have a yearly group turnover that does not go over S$100 million or 200 employees.
Venture Debt Program
The government of Singapore piloted an SME venture debt program (VDP). It allows SMEs that have a high potential loan for up to S$5 million. They can use this for working capital, mergers & acquisition, and project & financing mergers. Based on the budget of 2018, this scheme is extendable for two years.
The VDP grants are for SMEs, and it was patterned after small businesses in Singapore. That means in order for them to loan, they should have at least 30% and their employees are less than 200. In addition, the requirements for eligibility could be imposed by local banks that are part of the program, and it can be found in their respective websites and other channels for inquiry.
Capabilities Development Grant (CDG)
It is a financial assistance program that is designed for helping start-ups and SMEs build capabilities across 10 main business areas. The scheme can be used by companies to subsidize qualifying project costs of up to 70% which includes equipment, training, consultancy, certification, and software costs. These also should lead to productivity increase, improvement process, human capital development, product development, transformation, business model, and better access to the market.
Double Tax Deduction for Internalization (DTDI)
The DTDI was established to help businesses with international expansion and internalization. Under the enhanced initiative that comes into effect this year, business in Singapore that carry out chosen overseas business activities are entitled to have a 200% tax deduction of up to S$150,000 or more. Also, these activities are overseas business development trips, market surveys and feasibility studies, overseas trade fairs, overseas advertising and promotions, and overseas staff expenses.
Businesses that are applying for DTDI should be registered in Singapore and mainly deal with goods. In order for foreign businesses to have headquarters there and want to internationalize can be considered depending on the case.
Business Improvement Fund
This is open to all businesses that are registered in Singapore that take on projects with a clear focus on tourism, and this is operated by the Singapore Tourism Board (STB). Then, it wants to encourage technological innovation, business model redesigning, and tourism sector processes for better productivity and competitiveness. The funding is granted based on how the scope and merits of the project are evaluated by the STB. The successful SME applicants can get funding support that is up to 70% of the qualifying costs. Then the non-SME applicants can receive the grant of up to 50%.
PACT
It encourages mutually beneficial collaborations that go between companies while Singapore government grants are for SME. The collaboration should go more than regular business activities. The enterprise has to take the lead role in driving projects that is beneficial to the companies.
PACT collaborations are being led by a single company that is responsible for driving projects that will be good for all parties. Such projects go beyond business activities that include areas like capability development and alliances.
The Singapore government grant helps businesses a lot. So they can make their plans possible and even foreign investors can benefit from them too. It is safe to say that doing business in Singapore certainly has its perks.
