In this series, we look at resources offered by the Singapore Government to assist companies aiming to internationalise and enter foreign markets. There are a number of resources offered:
- Enterprise Overseas Centres;
- Market Readiness Assistance (MRA) Grant
- Plug & Play Network (PPN)
- Global Innovation Alliance
Enterprise Overseas Centres
Enterprise Sg has a series of 35 international business locations. They help businesses generate new leads, find business partners, and acquire new technologies and capabilities overseas. They also assist entrepreneurs and dispense advice on business upgrading. The directory of SME Centres can be found here and Overseas Centres here.
Market Readiness Assistance (MRA) Grant
This grant boosts Small and Medium Enterprises (SMEs) internationally in order to take their business overseas.
Eligible SMEs can receive up to 70% of eligible costs, capped at $100,000 per company per new market from 1 April 2020 to 31 March 2023. A new market refers to a target overseas country whereby the applicant company has not exceeded S$100,000 in overseas sales in each of the last three preceding years.
This is limited to one activity per application for the following activities:
|Overseas Market Setup (Capped at $30,000)
|Market entry advisory, legal and documentation expenses relating to:
In-depth FTA Consultancy for advisory and legal expenses relating to:
|Overseas Business Development
(Capped at $50,000)
|Third-party costs incurred to identify potential business partners and/or customers (B2B) including the following:
|Overseas Market Promotion
(Capped at $20,000)
|Third-party costs incurred for:
To qualify, Companies should meet the following criteria:
- Business entity is registered/incorporated in Singapore;
- At least 30% local shareholding;
- Group annual turnover not exceeding S$100 million per annum based on the most recent audited report, or group employment not exceeding 200 employees;
- Not be a retrospective applicant (An applicant will be deemed retrospective if any of the following events took place before the application date):
- Signed an engagement letter with the third-party consultant;
- Made the first payment to the third-party consultant;
- Commenced the project with the third-party consultant.
Plug & Play Network (PPN)
Enterprise Singapore has tied up with several Partners and Consultants to assist Singapore companies to enter overseas markets. These services cater to SMEs at different levels of readiness for internationalization. Such services include:
The Pre-Entry Advisory provides a Customised Executive Summary reports that can cover target markets and give recommendations on suitable modes of Market Entry Strategy, overviews of trade regulation and exporting information or competitor analysis.
Overseas Business Partner Search
The PPN will also help with Overseas Business Partner Search. With its global database, it can identify potential agents, distributors, partners or customers. 6-8 meetings will be set up to introduce partners to one another. Companies can apply for the Market Ready Assistance Grant to subsidise this service.
One service, Leadbook, provides access to a global database of 20 million verified contacts from 4 million organisations. Leadbook is a research and analysis tool that provides customer insight through crawling websites in order to gather data used in real-time. It aids in lead generation by finding potential customers for companies across all verticals and markets internationally.
Overseas Market Set-Up with Co-working Spaces
The Plug and Play Network also covers overseas market setup. Companies can look at working with 91springboard, which provides co-working spaces for companies of all sizes. 91springboard can also potentially connect startups with angel investors, venture funds, and banks, as well as back promising startups through their investment fund. PPN partners provide a network of various in-market resources including legal, incorporation services, logistics, HR and IT support.
Double Tax Deduction for Internationalisation (DTDi)
Companies planning to expand overseas can benefit from DTDi, with a 200% tax deduction on eligible expenses for international market expansion and investment development activities. This can lead to tax savings through DTDi, when an eligible expense is not an Allowable Business Expense under the Income Tax.
DTDi is available automatically without need for prior approval for four activities on the first S$150,000 of eligible expenses per year of assessment:
- Overseas business development trips and missions
- Overseas investment study trips and missions
- Overseas trade fairs
- Local trade fairs approved by Enterprise Singapore or Singapore Tourism Board (STB)
Eligible expenses on qualifying activities outside the four areas, and expenses exceeding S$150,000 will require Enterprise Singapore’s approval.
To be eligible, Companies should:
- Reside in Singapore with a primary purpose of promoting the trade of goods or provision of services;
- Have the following key objectives:
- Promote the company’s new products and services to new target market(s);
- Identify new customers in target market(s) for the company’s existing products and services;
- Promote the company’s new products and services to existing customers;
- Promote the company’s existing products and services to existing markets so as to increase market share.
Applications must be submitted on the DTDi portal prior to starting the project.
This was a brief overview of the government assistance that businesses may obtain in order to break into international markets. In the next article, we look at the remaining schemes and support, with a particular focus on Global Innovation Alliance.
At Silvester Legal, we work extensively with SMEs and 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.