Advisory on Government Funding & Assistance Schemes.
Enkindle Corporate Services can assist startups explore and take advantage of available government grants and pro-business assistance schemes. A summary of such schemes includes:
- Government Aided Equity Financing Schemes
- Cash Grants
- Business incubator schemes
- Debt financing schemes
- Tax incentive schemes.
Interested to find out more? Call us, we hope to serve you by adding value to your organisation.
- SPRING Startup Enterprise Development Scheme (SPRING SEEDS): SPRING SEEDS is an equity investment scheme where SPRING SEEDS Capital, a subsidiary of government agency SPRING Singapore, co-invests in commercially viable Singapore-based start-ups along with independent third-party investor(s), matching dollar-for-dollar up to a maximum of S$1 million; the first round of investment is usually limited to S$300,000. SPRING SEEDS Capital and the third-party investor(s) will take equity stakes in the company in proportion to their investments.
- Business Angels Fund (BAF) Scheme: The Business Angels Fund (BAF) Scheme is an equity investment scheme where SPRING SEEDS Capital, a subsidiary of government agency SPRING Singapore, co-invests in growth-oriented, innovative Singapore-based start-ups along with pre-approved business angels matching dollar-for-dollar up to a maximum of S$1.5 million. SPRING SEEDS Capital and the business angel group will take equity stakes in the company in proportion to their investments.
- Early-Stage Venture Funding Scheme (EVFS): The Early-Stage Venture Funding Scheme (EVFS), that is administered by the National Research Foundation (NRF), is a co-funding scheme where selected venture capital firms who raise at least S$10 million from third-party investors will receive dollar-for-dollar matching from the NRF up-to a maximum of S$10 million in order to invest in early-stage technology start-ups. Certain qualifying technology start-ups can approach the venture capital firms directly in order to seek funding of up-to S$3 million.
- ACE Start-ups Scheme: ACE Start-ups Scheme is a financial assistance scheme where ACE (Action Community for Entrepreneurship) will match S$7 to every S$3 raised by an entrepreneur for up to S$50,000. For selected ventures, the total grant is S$100,000. ACE does not take equity in exchange for the financial grant.
- Technology Enterprise Commercialization Scheme (TECS): The TECS that is jointly administered by the Infocomm Development Authority (IDA) and SPRING Singapore spurs the formation of new technology start-ups in Singapore by addressing their early-stage funding needs towards the commercialization of proprietary technology ideas. The following grants are offered under the TECS:
- For applicants who wish to develop proprietary ideas at conceptualization stage: Up-to 100% of qualifying costs for each project up to maximum of S$250,000.
- For applicants who wish to carry out further research and development on a technology project, including the development of a working prototype: Up to 85% of qualifying costs for each project up to maximum of S$500,000. The applicant must demonstrate proof of interest from a potential customer or third-party investor.
- iSTART: ACE Scheme: The iSTART:ACE (Accelerate & Catalyse Entrepreneurship) grant scheme that is administered by the Infocomm Development Authority (IDA) aims to encourage and assist Singapore-based start-ups to accelerate technology commercialization and catalyze go-to-market activities by leveraging internationally proven technologies. Under the iStart: ACE scheme, the IDA will offer funding support to qualifying start-ups by way of a grant that covers up-to 50% of salaries of five technical staff for one year up-to a maximum cap of S$250,000
- iSPRINT: Another project by the IDA, iSPRINT (Increase SME Productivity with Infocomm Adoption & Transformation) covers improvements through packaged solutions, such as for accounting and payroll, to more complex customized solutions for areas such as customer relationship management and supply chain management. Any customized solutions require that the development must be for the first-time automation of business functions. In addition, it should be carried out in Singapore, and must not have started before the grant is approved. iSPRINT is open to all locally registered or incorporated SMEs.
- ComCare Enterprise Fund (CEF): The ComCare Enterprise Fund that is administered by the Ministry of Social and Family Development (MSF; formerly Ministry of Community Development, Youth & Sports) provides seed funding for social enterprise start-ups (strictly from the social services sector) that train and employ disadvantaged Singaporeans of up-to 80% of the capital expenditure and first two years’ operating costs, subject to a maximum of S$300,000
- New Initiative Grant (NIG): The New Initiative Grant that is administered by the National Volunteer and Philanthropy Centre (NVPC) provides seed money for Singapore-based start-ups with new initiatives that meet community needs in Singapore and are strong in volunteerism and/or philanthropy. Qualifying start-ups will receive funding that covers up to 80% of costs (e.g. manpower, rent, equipment, volunteerism and philanthropy-related costs) in furtherance of the initiative for one-year subject to a maximum of S$200,000
- I.Jam Micro Funding Scheme: The IDM (Interactive Digital Media) Jump-start And Mentor (i.JAM) scheme that is administered by the Media Development Authority’s inter-agency, Interactive Digital Media Programme Office appoints incubators to identify, nurture, and administer funding to technically competent start-ups. More specifically, the incubators will advise start-ups on the uniqueness of their ideas, aggregate start-ups with similar ideas, offer networks, and provide guidance on securing additional funding. Incubators will invest 10% to 25% of the qualifying project costs of the start-up. In addition, start-ups will receive a grant up-to a maximum of S$50,000 of the project’s qualifying costs. Incubators will take equity stakes in the company in proportion to their investment. The grant will be disbursed to the start-up on a reimbursement basis.
- NRF Technology Incubation Scheme: The National Research Foundation has selected fifteen technology incubators to nurture high-tech Singapore start-ups by way of mentorship as well as funding. The NRF will offer up-to 85% co-funding in each start-up company in the incubator, up to a maximum of S$500,000. The incubator will be required to invest the remaining amount of at least 15%. NRF and the incubator will take equity stakes in the company in proportion to their investments.
- Incubator Development Program: The Incubator Development Program that is administered by SPRING Singapore provides up-to 70% grant support to incubators and venture accelerators who actively introduce programs that help nurture start-ups including cost of hiring mentors, expenses incurred to market services/events, hire incubator managers, train staff, provide shared services/equipment for start-ups, etc. Innovative startups can benefit from the programmes offered by the various incubators and venture accelerators supported under the Incubator Development Program.
- Incubator for Disruptive Enterprises and Start-ups (IDEAS) Fund: The IDEAS Fund that was launched by Innosight Ventures Pte. Ltd. a Singapore-based venture capital firm and the National Research Foundation (NRF) is an incubator fund for early-stage start-up companies. Start-ups with disruptive innovation potential will be identified and offered guidance during their early-stages including funding investment to the tune of up-to S$500,000-S$600,000. The NRF supports the incubator with 85% co-funding.
- Fast-Track Environmental and Water Technologies Incubator Scheme (Fast-Tech): The Fast-Tech scheme that is administered by the Economic Development Board offers start-ups in the environmental and water technology sector funding assistance of up-to S$300,000 or up to 85% support level, whichever is lower, over two years. In addition, the start-ups will be housed in water-technology incubators who will offer mentorship and guidance. The designated incubator will take an equity stake in the company. The grant will be disbursed to the start-up on a reimbursement basis.
- Micro-Loan Program: Under the Micro-Loan Program, participating banks and financial institutions will lend eligible Singapore companies loans of up-to S$100,000 for their daily operations or for automating and upgrading factory and equipment. The SMEs will have to pay a minimum 5.75% interest rate for a less than four years loan tenure.
- Loan Insurance Scheme (LIS): The Loan Insurance Scheme insures loans against default risks. The government will co-share the insurance premium with the start-up enterprise. The LIS supports both domestic trade and overseas trade facilities. There is no maximum loan quantum for the LIS. The premium rate, interest rate, and loan tenure will be determined by the insurer based on the risk profile of borrower. The government provides premium support of 50%. The repayment structures and collateral requirements will be determined by the participating financial institutions.
- Local Enterprise Finance Scheme (LEFS): Under the LEFS, participating banks and financial institutions will lend eligible Singapore companies loans of up-to S$15 million for automating and upgrading factory and equipment/construction equipment/heavy vehicles, and/or purchasing factory and business premises. The SMEs will have to pay a minimum 4.75% interest rate for a less-than-four-years loan tenure and 5.25% interest rate for loan tenure of more than 4 years.
Listed below are the various tax incentives that are made available to start-ups and SMEs in Singapore.
- Tax Exemption for Start-ups: A newly incorporated Singapore company that satisfies the qualifying conditions (i.e. incorporated in Singapore, tax resident of Singapore and has no more than 20 shareholders of which at least one is an individual shareholder holding at least 10% of shares) will be taxed as follows:
- For each of its first three consecutive tax years – corporate tax rate of 0% on the first S$100,000 of taxable income and 8.5% (partial exemption) tax rate on the next S$200,000 of taxable income. The taxable income above S$300,000 will be charged at the normal headline corporate tax rate of 17%.
- From the fourth tax year onwards – 8.5% tax rate on taxable income of up to S$300,000 per annum. The taxable income above S$300,000 will be charged at the normal headline corporate tax rate of 17%.
- Development and Expansion Incentive (DEI): The DEI encourages Singapore-based companies to move into high value-addition business activities, expand their operations in the country, and procure advanced machinery and equipment by offering a reduced tax in the range of 5%-10% on incremental income derived from qualifying activities.
- Investment Allowance: Companies may claim capital allowance on plant and equipment used in connection with their trade or business, subject to meeting certain conditions. The Integrated Investment Allowance Scheme provides an additional allowance on fixed capital expenditure incurred for productive equipment placed overseas on approved projects with effect from YA 2013.
- Pioneer Incentive Scheme: Companies from the manufacturing or services sector that engage in activities that raise overall industry standards may be eligible for full corporate tax exemption on qualifying profits for up to 15 years.
- Productivity and Innovation Credit (PIC) Scheme: The PIC scheme (IRAS) is a tax benefit scheme that was first introduced to encourage companies to engage in innovative and productive activities.
- Businesses can enjoy up-to 400% tax deduction/allowances
- 60% cash payout
- PIC Bonus, a dollar-for-dollar matching cash bonus given on top of above two options.
The productivity improvement activities covered under PIC are:
- Acquisition and leasing of PIC Information Technology (IT) and Automation Equipment;
- Training of employees;
- Acquisition and In-licensing of Intellectual Property Rights;
- Registration of patents, trademarks, designs and plant varieties;
- Research and development activities; and
- Design projects approved by Design Singapore Council.
- Industry-specific tax incentives: In addition to the above-mentioned tax incentives, there are various industry-specific tax incentives for Singapore-based SMEs, including start-ups. Contact us and we will tell you more.