Grants for Start-ups in Singapore
Singapore has everything that a new business could possibly need, including business-incubating infrastructure, tax incentives, cash grants, and financial assistance packages. To fuel the growth of start-up ventures, the government has recently introduced several initiatives to help Singapore develop into a successful startup environment.
The Minister of State for Trade and Industry Mr Koh Poh Koon announced the creation of Startup SG in March 2017, with the objective of getting ahead of the fierce global competition for emerging entrepreneurs.
The umbrella branding for all of Singapore's startup support systems is Startup SG. A launching platform for entrepreneurs, fuelling them with access to local support programs and connecting them to the wider international entrepreneurial network. Startup SG has everything you need to access loans, grants, funding, and capacity growth when establishing a start-up in Singapore.
The government has also modified the EntrePass work pass scheme in an attempt to break down the access to entry barriers for global entrepreneurial talent in Singapore. This occurred as a result of the drastic increase in the volume of start-ups across the nation over the past 10 years or more. In 2003, there were 22,000 start-ups which grew to 48,000 in 2015.
With the steady growth of innovative start-ups, as well as new initiatives from the authorities to assist startups in terms of finance and talent, Singapore's status as a regional start-up hub is guaranteed to expand.
If you're looking to establish your business in Singapore's flourishing startup environment, below is an extensive list of all the government assistance available.
Government Support available to Singapore Start-ups
1.Startup SG
The project's platform encompasses every type of start-up ecosystem imaginable, and is divided into six categories:
Startup SG Founder
The organization provides business coaching and seed money to budding entrepreneurs with unique concepts.
Under this plan, SPRING (matches $3 for every $1 raised by the entrepreneur) has selected Accredited Mentor Partners (AMP) to assist it in identifying qualifying applicants based on the entrepreneur's unique business idea, business model's feasibility, management team's strength and potential market value.
Start SG Tech
It's intended to provide early-stage funding to firms developing unique technology and includes both Proof-of-Concept (POC) and Proof-of-Value (POV) grants, depending on the technology's stage of development.This is a competitive grant that tech start-ups may use to fast-track the development of their unique solutions and create a scalable business model.
Startup SG Equity
The initiative is designed to encourage and stimulate private-sector investments into innovative, Singapore-based technology start-ups with intellectual property and global market potential by allowing the government to co-invest in a start-up alongside third party investors.
In relation to the co-investment ratio applying to third party investors, is 7:3 up to $250,000, and for tech companies 1:1 thereafter up to the investment cap of $2 million. The rations for more involved tech companies are 7:3 up to $500,000, and 1:1 thereafter up to the investment cap of $4 million.
But the Government will only co-invest if potential third-party individual or corporate investors are willing to put at least $50,000 into the firm and can offer management knowledge, relevant business connections, and technical insights to help it develop.
SPRING SEEDS Capital (SSC) manages the Startup SG pillar, which is the investment extension of SPRING Singapore. It collaborates with private investors in Singapore-based start-ups that have innovative and effective intellectual content that is marketable across international regions.
The Singapore Innovation Hub (SIP) has already promised up to $100 million in funding to assist high-potential Singapore-based deep technology start-ups develop their ideas. AME (Advanced Manufacturing and Engineering), as well as Health and Biomedical Sciences, are areas of research where SSC is encouraging co-investment partners.
Startup SG Accelerator
This initiative offers grants and non-financial assistance to developing incubators and accelerators in priority growth areas to improve their initiatives and expertise in fostering successful startups.
The aim of the initiative is to assist developing and emerging businesses in achieving their potential through access to finance, information, mentorship, and support.
Startup SG Talent
The third pillar is Innovation and Entrepreneurship, which includes initiatives such as EntrePass, T-UP, and the SME Talent Programme (STP). The EntrePass is a work pass program that allows international entrepreneurial talent to enter and stay in Singapore while supplementing the country's local skill sets and contributing to a more vibrant high-tech start up environment.
The A*STAR Intelligent Systems and Services T-UP or Technology for Enterprise Capability Upgrading initiative, which is sponsored by the Singapore government’s Agency for Science, Technology and Research (A*STAR), aims to assist businesses in developing internal R&D capabilities by tapping into the talent at A*STAR's Research Institutes.
For a period of up to two years, the program pays up to 70 percent of secondment costs for researchers and engineers.
The Action Community for Entrepreneurship (ACE) run the SME Talent Programme (STP) for Start-ups, providing 70 percent subsidy in stipends financed to interns, and as a result assists start-ups in building their human capital growth capabilities.
Startup SG Loan
These are government-backed loans that provide start-ups with much-needed working cash, equipment/factory financing, and trade finance, included below:
SME Micro Loans – for companies with 10 or less employees, which can access working capital financing of up to S$100,000 to support their daily business operations.
SME Venture Loan – for high-growth firms, which can access alternative financing of up to S$5,000,000 for the purpose of business growth.
SME Working Capital Loan – came into existence from June 1, 2016, to May 31, 2019, start-ups are eligible for unsecured working capital financing of up to S$300,000 to support their daily business functions.
SME Equipment and Factory Loans – start-ups are entitled to financing of up to S$15 million to purchase equipment, machines or selected factory properties.
Read more about the six Startup SG Pillars here
Even though Startup SG covers most of what the essentials for start-up businesses perks in Singapore, however there are further benefits which you should consider, listed below:
2.Angel Investors Tax Deduction (AITD) Scheme
The AITD is for accredited, qualified angel investors who invest at least $100,000 in a qualifying business. The angel gets a 50 percent tax deduction over two years after the investment is made. It's worth noting that each year, the allowable investments will be limited to $500,000 and the maximum tax deduction will be $250,000. Find out more here.
3.Financial Sector Technology and Innovation (FSTI) Scheme
The Singapore Momentary Authority of Singapore (MAS) established the FSTI program to assist in the establishment of a vibrant innovation ecosystem, with S$225 million in funding over five years provided by the Authority. The goal of the strategy is to entice financial institutions to establish their innovation labs in Singapore, help create industry-wide technology infrastructure, and stimulate the development of innovation solutions.
There is also a sub-program under FSTI called FSTI-Proof of Concept (POC). Under this program, MAS provides funding support of up to 50-70 percent of qualifying costs, up to $200,000 for 18 months.The support is open to Singapore-based Financial Institutions (FIs), as well as technology or solution providers engaged with Singapore-based FIs for the early phase development of innovative solutions to financial sector challenges. Read on here.
4.Capabilities Development Grant (CDG)
This is a funding program designed for small and medium-sized enterprises (SMEs) that aims to help them develop their skills in ten key business areas. Companies may apply for the scheme to receive up to 70% of approved project expenses, including consultancy, training, certification, equipment, and software purchases. The strategic aims of these programs should lead to increased productivity, process improvement, product development, human capital development, business model change, and improved market accessibility.
5.Innovation and Capability Voucher (ICV)
This is an easy-to-use voucher worth $5,000 that may be used by start-ups and small businesses to develop their business capabilities. Companies can apply the voucher to enhance and strengthen their fundamental business processes such as innovation, production, human resources, and financial management through consultancy. A maximum of eight vouchers are available to each start-up/ SME, and the duration of each project must not exceed six months.
6.Early Stage Venture Fund
The National Framework for Innovation and Enterprise has an initiative called ESVF. Under ESVF, on a matching basis the NRF invests $10 million to grow corporate venture capital (VC) funds that invest in Singapore-based establishment phase technologically advanced companies. It's important to know that within five years, the VC has the ability to buy out NRF’s share of the fund by returning NRF’s capital with interest. Find out more here.
7.Business Improvement Fund
The BIF is administered by the Singapore Tourism Board (STB), which is open to all companies/companies with a tourism focus who are registered in Singapore. It promotes innovation and adoption of technology, as well as business model and process redesign in the tourism sector to improve productivity and competitiveness.
Funding is provided based on STB's review of the project's scope and merits. While SME applicants are eligible for funding support up to 70 percent of qualifying expenditures, non-SME applicants are eligible for funding support up to 50 percent of approved expenses.
8.Building Information Model (BIM) Fund
THE BIM Find allows companies to be eligible for up to $30,000 funding, to promote wider adoption of BIM collaboration between industry firms, by funding part of the cost incurred in training, consultancy, software or hardware.
In addition, if you are a Singapore-based business looking to enter a new market or extend your presence in an existing one, there are a variety of assistance programs available through the Singapore International Enterprise (IE).
9.Double Tax Deduction for Internationalisation (DTDi)
DTDi allows businesses to save money on taxes through a 200 percent tax credit for qualifying expenditures for supported market expansion and investment development initiatives, is one option.
10.Market Readiness Assistance (MRA) Grant
The available MRA grant is up to 70% of eligible third-party costs, which include things like overseas market development, identification of business partners, and international market promotion.
11.Global Company Partnership Grant
The GCP Grant covers the costs of foreign expansion projects in capability development, market access, and human resource growth.
12.International Marketing Activities Programme (iMap)
iMAP provides support for overseas business trips and Singapore Pavilions at international trade fairs. Companies that are engaged in iMAP-approved activities will receive up to 50% - 70% of eligible core expenditures, such as exhibit space rental, booth construction cost, and fair/mission consultancy fees, as well as assistance.
In Summary
The article is a summary of all the assistance start-ups receive when they emerge a start-up business in Singapore. In addition to the wealth of advantages and government support, all enterprises in Singapore enjoy low corporate tax rates, a strong intellectual property rights system, experienced personnel, and excellent networking within Asia's emerging markets. It's fair to say if you want to begin a start-up venture, Singapore is the place to be.
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