Singapore has developed a reputation as a global business destination because of a strategic location, a stable legal system and a favourable business environment. On top of all these, the government actively engages to facilitate business growth, innovation and internationalisation, through a myriad of grants, tax initiatives and financial assistance programmes.

Whether start-ups or multinationals, businesses are able to access a variety of grants aimed at enhancing productivity, supporting technological transformation and to assist in overseas expansion. Even though there are various business grant opportunities in Singapore, many companies struggle to make sense of them, as navigating eligibility criteria, compliance and application can hinder businesses from pursuing funding opportunities.

This guide examines the key grants, tax incentives and business support schemes in general, explaining eligibility, the application process and frequent pitfalls businesses face when pursuing support.

Why Does the Government Offer Grants & Incentives?

The government of Singapore actively invests in businesses with the goal to encourage innovation, enhance productivity, build a knowledgeable workforce and fortify international expansion. Successfully operating a business necessitates funding, strategic measures and competitive advantages, therefore these programmes exist to fulfil identical objectives. Goals of the government include improving productivity and adopting new technologies.

One of the primary goals for the government is to enhance productivity and technological uptake. Offering financial assistance to businesses for digital solutions, automation and artificial intelligence (AI) facilitates modernization and keeps businesses competitive in an increasingly dynamic and global marketplace. Also, independent R&D grant funding supports innovative business investment with the aim of maintaining Singapore’s position as a centre for advanced industries.

Another important focus area is overseas expansion. As a global trading hub, Singapore wants to help businesses develop significant position in overseas markets. However, businesses often need to make large investment to access these markets and in take a risk that may not be supported through financing due to uncertainty. In support of reducing these delivery risks, the government provides financial assistance for overseas market research, branding and business development activities, making it easier to grow business overseas.

The workforce is another important area of focus. Having workforce skills and adaptability are key to business success, the government also provides financial assistance to businesses that upskill their workforce through professional development and training. This in turn, allow business to have their workforce maintaining a competitive edge with current industry skills.

Singapore is also committed to supporting high-growth and strategic sectors such as advanced manufacturing, fintech, biotech and green energy. Organizations operating in these areas are often eligible to receive some form of tax exemption, investment support and/or specific funding programs based upon their industry sector.

While these financial support programs offer organizations clear advantages to support their business goals, organizations should use caution when leveraging these programs. It is important to understand and follow any requirements associated with applying for the funding, have a plan in place with clear outcomes, and follow the funding requirements.

Key Government Grants in Singapore

The Enterprise Development Grant provides support for an organization to scale, innovate and/or seek international opportunities. The EDG funds projects that upgrade an organization’s core capabilities to support business transformation or to build market access. To qualify an organization must be registered in Singapore with a minimum of 30% local shareholding and demonstrate financial viability through a business profile. An organization seeking to apply to the EDG must also have a detailed project plan ready that demonstrates the value of the funding for growth and competitive advantage.

The Productivity Solutions Grant supports plans for small-and-medium-sized enterprises (SMEs), looking to modernize through adopting digital, automated solutions and/or artificial intelligence technologies. The grant funds up to 50% of the cost of the pre-approved productivity solutions, enabling easier plans for modernization efforts.

The Market Readiness Assistance (MRA) Grant supports businesses seeking to expand overseas. The MRA Grant covers up to 70% of eligible costs associated with branding, market research, and business development for overseas market entry. Eligible companies must have an SME (Small and Medium Enterprise) position with an annual revenue of less than S$100 million (or have fewer than 200 employees) and have at least 30% local shareholding. The MRA Grant will be especially useful for those businesses determined to explore overseas markets, but who have an affordability challenge.

 The Startup SG Grantis open to fast-growth and innovative startups that require funding and guidance. Startups seeking to progress “early-stage” companies may gain significant benefits from the Startup SG Grant, which will include three additional recommendations including a funding, mentorship, and access to entrepreneurial ecosystem support to help commercialize innovations, as well as scaling. To qualify, the startup must have at least one Singaporean (PR) Permanent Resident founder, and the business must be proven to be unique with high-growth potential. The Startup SG Grant is particularly geared to tech-driven companies, or business focusing on some aspect of innovation.

Key Government Incentives in Singapore

The Corporate Income Tax (CIT) Rebates & Exemptions are designed to alleviate some of the tax burdens on businesses, and help them to manage costs. The Partial Tax Exemption (PTE) scheme exempts 75% of the first $10,000 of chargeable income and 50% for the next $190,000 of chargeable income (‘chargeable income’ is the same as ‘taxable income’). Start-ups can take advantage of the Start-Up Tax Exemption (SUTE), which exempts the first $100,000 of chargeable income for the first three years of incorporation. There may also be occasional rebates of corporate tax to help ease the cost further.

Businesses that purchase high-tech equipment, automation and manufacturing facilities, may qualify for the Investment Allowance (IA), which provides a tax deduction of up to 100% on capital expenditure that qualifies. Companies that operate in strategic industries may also be eligible for the Pioneer Certificate (PC) Incentive, which will provide either a tax exemption or a reduced tax rate for a period of up to 15 years.

Businesses that grow internationally may find that the Double Tax Deduction for Internationalisation (DTDI) scheme provides up to a 200% deduction on eligible expenses. Eligible expenses include overseas marketing expense, branding expenditures, feasibility studies, and attendance at trade shows.

Companies engaging in R&D will benefit from Research & Development (R&D) Tax Incentives. The tax incentives provide up to a 250% tax deduction on R&D expenses that are incurred in Singapore and qualify as eligible expenses. Funding may also be available in the form of direct cash grants for projects that align with the economic development strategy for Singapore.

h2>Common Challenges Businesses Face When Applying for Grants & Incentives

Many firms wrestle with completing an application because they struggle with determining which grant is the right fit. Applying to the wrong grant or incentive program can have costly repercussions. Waitlists for assessments of applications can lead to frustration because they were not a good fit in the first place. Another challenge is submitted proposals are often weak. Successful applicants had sound project plans, substantiated needs for their projects, and measurable outcomes. Inadequate proposals lead to being declined funding because of the application.

Compliance and reporting requirements are also very important. Once funding is secured, firms need to monitor spending, submit progress reports, and follow grant requirements. Grant opportunities can be revoked if identified requirements are not complied with. Finally, many firms do not claim tax incentives because they are unaware of eligibility requirements or file application paperwork incorrectly.

How to Successfully Apply for Government Grants & Incentives

The initial step to attaining financial assistance is identifying the right grant or incentive to match the business’s goals. Grants provide direct financial support, while tax incentives will provide savings, usually through exemption or deduction. Once an appropriate scheme is identified, the business should be ready to develop a solid application which includes up-to-date financial information, a project outlined in full and specific objectives which meet the criteria of the funding program.

Grant applications should be submitted through the Business Grants Portal (BGP) while a tax incentive is applied generally through the IRAS or Economic Development Board (EDB). Once the funding has been approved, it is the business owner’s responsibility to track spending, report in a reasonable timeline and spend their funding in accordance with the funding policy etc., or risk incurring a penalty.

Conclusion

The government of Singapore provides a wide variety of grants and incentives to help businesses innovate, grow, and internationalize. Whether you are an SME looking for funding, a startup looking for tax relief, or a corporation making a technology investment, there are many schemes available to help you achieve your business goals. At Anbac Advisors, we help businesses adopt and experience these options. Our expertise and experience in working with grants, financial planning, and compliance will help you from start to finish.