In this new series, we look at assistance schemes, ranging from Grants, Loans & Insurance, Retraining Support, Support for Technology & Innovation, and Support for Internationalisation of SMEs. In Part I and Part II of these series, we will look at Government grants for start-ups in Singapore.
Small-to-Medium Enterprises (“SMEs”) are vulnerable to deteriorations in business conditions because of limited financial resources and weaker access to financing. The Singapore Government has made it a clear priority to help SMEs. However, many are still not heeding the call to innovate, enhance productivity and internationalise. Too often, Singapore companies do not receive the advice they need when it comes to setting up their businesses. They miss out on grants, financial assistance, tax exemptions and even infrastructure support that are readily available. Therefore, we aim to inform our audience of the available grants for their usage.
The different grants available are:
- Productivity Solutions Grant (PSG);
- Startup SG Founder;
- Startup SG Tech;
- Startup SG Equity;
- IMDA SME Go Digital;
- IMDA SME Grow Digital;
- Business Improvement Fund for Tourism;
- Tourism Product Development Fund;
- Miscellaneous Business Grants.
Productivity Solutions Grant (PSG)
Possibly one of the important grants for SMEs in Singapore, the PSG Covers up to 70% of costs (up to $30,000) for productivity solutions that have been pre-scoped by A*STAR, IMDA, Enterprise Singapore and Singapore Tourism Board. The list of supported solutions and industries are very wide, from accounting software to bus and ship fleet tracking to cloud-based management solutions. The list updates from time-to-time. Access the full list here.
Seek this if you:
- Are an SME or start-up;
- Are registered and operating in Singapore;
- Purchase/lease/subscription of the IT solutions or equipment that must be used in Singapore;
- Have a minimum of 30% local shareholding (for selected solutions only).
Startup SG Founder
This scheme provides mentorship and startup capital grant to first-time entrepreneurs with innovative business ideas. Enterprise Singapore will match $3 for every $1 raised by the entrepreneur. Enterprise Singapore’s appointed Accredited Mentor Partners (AMP) will identify qualifying applicants based on the uniqueness of business concept, the feasibility of the business model, strength of management team, and potential market value. Upon successful application, the AMP will assist start-ups with advice, learning programs and networking contacts.
Seek this if you:
- Are a first-time entrepreneur with an innovative business idea;
- Are a Singaporean/PR;
- Not have received funding for the business idea from another government entity;
- Your company has 51% local shareholdings and is incorporated not longer than 6 months before the application;
- Are a key decision maker in the company and can commit full-time to the company.
Startup SG Tech
Provides grants for projects for innovative science and technology commercialisation, and the creation of new Intellectual Properties. For instance, you might receive up to $250,000 for conducting a Proof of Concept projects, or $500,000 for a Proof of Value project. Additionally, Enterprise Singapore might take equity into order to encourage financial discipline.
Seek this if you are:
- A start-up less than five years from incorporation;
- 30% locally owned;
- With a group turnover of less than $ 100 million or group size than 200 workers;
- Have not commenced on the project;
- Will conduct the core of your activities in Singapore.
Startup SG Equity
Under this scheme, SEEDS Capital Pte Ltd and SGInnovate may help you look for one of Sg Equity’s appointed independent, qualified 3rd party investors. If one or more can be found, the government may co-invest up to SGD 8 million with its partners into your Start-Up. SEEDS Capital may even match contributions at a 1:1 ratio.
Seek this if you:
- Are a local start-up within 5 years of incorporation with at least $50,000 in paid-up capital;
- Have identified a potential co-investor willing to participate, but has NOT invested your start-up;
- Are a business not involved in gambling, tobacco-related products, or any other activities which are in violation of the law, or against the public interest;
- Are not a subsidiary or joint-venture;
- Are able to prove substantial innovative and intellectual content for your products and/or services.
This was a brief overview of the grants that startups may receive when they are incorporated in Singapore. Additional benefits available to all companies in Singapore include low corporate tax rates, effective legal and intellectual property rights protections, skilled manpower, and access to emerging markets of Asia. These will be discussed further in this series. Stay tuned for next week when we explore Part II of Grants for start-ups and SMEs.
At Silvester Legal, we work extensively with start-ups to understand our Clients’ needs. We want our Clients to take full advantage of the opportunities available to them as they pursue their business ventures.
Disclaimer: The materials prepared here are for general information purposes only to inform you about Silvester Legal LLC, our services and related matters. The information presented is not legal advice and is not to be acted on as such.