Business Incentives and Assistance Schemes by Singapore Government

This guide provides an overview of the business assistance schemes and incentives available for startups and Small to Medium Enterprises (SMEs) in Singapore.

To promote the growth and expansion of businesses in Singapore, the Singapore government offers a variety of business assistance schemes and incentives to startups and small to medium-sized enterprises (SMEs). They can be divided into the following main categories:

Note that these incentives are available to Singapore incorporated companies only.

Cash Grants

Startup SG Tech: The grant provides project funding for local Singapore companies to develop breakthrough technology that can disrupt current markets or create new markets. With Startup SG Tech, companies will receive funding for both Proof-of-Concept (POC) and Proof-of-Viability (POV) projects. POC projects, which are designed to test the technical and scientific viability of a new technology, can receive funding of up to S$250,000. POV projects designed to test the commercial viability of a lab proven technology can receive up to S$500,000 in funding. Furthermore, to qualify for Startup SG Tech, companies must meet the following requirements:

  • The company must be a registered Singapore company less than 5 years old
  • The company must operate in Singapore
  • The company must have at least 30% local shareholding
  • Annual revenue must be less than S$100 million or the company must employ fewer than 200 people

Startup SG Tech offers cash grants to companies in the following industries:

  • Advanced manufacturing and robotics
  • Biomedical sciences and healthcare
  • Clean technology (e.g. waste management solutions, sustainable energy generation)
  • Information and communications technologies
  • Precision engineering (e.g. composite technology and silicon photonics technology)
  • Transportation technology
  • Food science and technology

SlingShot Prizes: Enterprise Singapore, the government agency that promotes entrepreneurship in Singapore, runs an annual competition for startups; the winners of this competition are awarded prizes of more than S$1 million. The competition is open to startups from around the world and receives over 1,000 entries from more than 80 countries each year. Startups can compete in the following categories:

  1. Consumer Products & Services, Media & Advertising, Retail & Food Services
  2. FinTech and InsurTech
  3. FoodTech and AgriTech
  4. HealthTech, BioTech and MedTech
  5. Manufacturing, Logistics & Transportation
  6. Urban Solutions, Sustainability and Energy

Several prizes are awarded and they include:

  1. The grand prize of receives S$200,000 Startup SG grant
  2. 12 prizes (top two winners from each category) receive S$50,000 Startup SG grant
  3. 6 corporate cash prizes of S$25,000 each
  4. 6 to 18 months of free workspaces in Singapore
  5. And several other prizes. The full list is available here.

Watch the following video to learn more about the 2019 SlingShot competition.

The Capability Development Grant (CDG): CDG provides cash assistance for SMEs that wish to take on projects that will ultimately improve competitiveness and business sustainability. With CDG, SMEs can receive funding for up to 70% of qualifying project costs including consultancy, training, certification and equipment costs. Projects covered by CDG include:

  • Branding and marketing
  • Business excellence (i.e., projects to improve management systems and processes)
  • Business model improvement
  • Quality standards adoption
  • Financial management (i.e., establishing frameworks for risk management and financial resource deployment)
  • Human capital management (i.e., adopting effective HR practices as well as attracting and retaining talent)
  • Intellectual property projects
  • Enhancing Business processes for productivity
  • Projects to improve customer service
  • Product development

To apply for CDG, SMEs must meet the following eligibility requirements:

  • The company must be registered and should operate in Singapore
  • The company must have at least 30% local shareholding
  • Annual revenue must be less than S$100 million or the company must employ fewer than 200 people

For more on how to apply, please visit Capability Development Grant page.

Innovation & Capability Voucher: ICV provides a voucher that will cover up to S$5,000 of consultancy costs for SMEs that want to improve their business capabilities in the following areas:

  • Financial management
  • Human Resources
  • Innovation
  • Productivity

To apply for ICV, companies must meet the following eligibility requirements:

  • The company must be registered and operate in Singapore
  • The company must have at least 30% local shareholding
  • Annual revenue must be less than S$100 million or the company must employ fewer than 200 workers

For an exhaustive list of consultancy projects covered by ICV and information on how to apply, please visit the Innovation & Capability Voucher (ICV) home page.

The Financial Sector Technology and Innovation Proof of Concept (POC) scheme: Set up by the Monetary Authority of Singapore (MAS), POC provides funding support to financial services and fintech companies that develop innovative technologies for the financial services industry. Funding is awarded on a project-by-project basis. Under POC, companies will receive funding for 50-70% of eligible project costs, up to a maximum of S$200,000. Eligible costs include the cost of manpower, professional services (such as consultancy and subcontractors), equipment and software, and intellectual property.

Business Improvement Fund (BIF): Managed by the Singapore Tourism Board, BIF provides support for projects that improve the productivity and competitiveness of tourism companies in Singapore. BIF is available to tourism companies that wish to take on any of the following projects to improve business capabilities:

  • Review and design of business processes
  • New product development
  • Improved financial management
  • Improved human resources capabilities to attract, develop and retain talent
  • New branding and marketing strategies

Furthermore, technology companies that create innovative technology products and services for tourism businesses also qualify for BIF. Under BIF, SMEs can receive funding for up to 70% of qualifying costs and non-SMEs will receive funding for up to 50% of qualifying cost.

Market Readiness Assistance (MRA) Grant: MRA helps SMEs that are moving into overseas markets for the first time. Under MRA, SMEs will receive funding for up to 70% of the cost, capped at S$20,000, for activities that prepare a business to launch in an overseas market. Such activities include securing import and export licenses, drafting franchise or joint venture agreements, securing distribution or joint venture partners, and marketing and PR activities.

Startup SG Founder: The scheme was developed by the Standards, Productivity and Innovation Board (SPRING) in order to provide funding for new entrepreneurs with innovative businesses. Startup SG Founders provides up to S$30,000 by matching S$3 to every $1 raised by the startup. Along with funding, entrepreneurs will also receive mentorship and business guidance from Singapore based incubators. The program is open to Singapore citizens and permanent residents. To be accepted into the Startup SG Founders program, first-time entrepreneurs must apply through an Accredited Mentorship Partner (AMP); these include:

  • Action Community For Entrepreneurship (ACE) works with startups working in all sectors.
  • Advanced New Technology Incubator works with startups specializing in hardware, robotics, and automation.
  • FocusTech Ventures works with startups in IoT, advanced manufacturing, robotics, AI, and AR/VR.
  • JCS Venture Lab works with startups in advanced manufacturing and engineering.
  • Nanyang Technological University works with startups in advanced manufacturing, health and biomedical sciences, urban solutions and sustainability, services and digital economy.
  • NUS Ventures works with startups in IoT, AI, fintech, hardware, and software.
  • Singapore Management University works with startups in fintech, cybersecurity, data analytics and artificial intelligence, smart city innovations, transportation, and logistics.
  • QuestVC works with startups in e-commerce.
  • Spaze Ventures works with startups in financial services, fintech, healthcare, education, e-commerce, logistics, big data, enterprise solutions and IoT.
  • The Finlab works with startups in fintech.
  • TNB Ventures works with startups in IoT, AR/VR, robotics and AI.
  • Trendlines Medical works with startups creating medical devices and medical technology.
  • Tri5 Accelerator works with startups in fintech, energy tech, education tech, and marketplace platforms outside of Singapore.
  • August Global Asset Management works with startups in fintech, security, medical technology, education technology, agriculture technology, and big data.

To receive the grant, the first-time entrepreneur must adhere to the following conditions:

  • The first-time entrepreneur must hold or propose to hold a minimum of 30% equity in the new company.
  • The first-time entrepreneur must dedicate a reasonable amount of time to the business, not be employed full-time by another employer and must be a key decision maker in the company.
  • The first-time entrepreneur cannot have already received funding for the proposed business from another government organisation.
  • Upon approval, the first-time entrepreneur must register a private limited company in Singapore.
  • If the first-time entrepreneur has already registered a company, it must not be more than 6 months old and must have at least 51% shareholding in Singapore.

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Equity Financing

Startup SG Equity: Startup SG Equity is an investment fund managed by SPRING Seeds Capital and SGInnovate. Under the Startup SG Equity scheme, the Singapore government will co-invest with 11 private investment partners in startups that require higher capital expenditure and take longer to become commercially viable.

For startups that are improving existing technologies, the Singapore government will provide 70% of the funding for the initial investment of S$250K. Thereafter, the Singapore government will invest S$1 for every S$1 invested by private investors up to a cap of S$2 million.

For startups classified as deep tech, the Singapore government will provide 70% of the funding for the initial S$500K investment. Thereafter, the Singapore government will invest S$1 for every S$1 invested by private investors up to an investment cap of S$4 million.

The Singapore government describes deep tech companies as developing products based on scientific or technological breakthroughs that are unique, differentiated and hard to reproduce. Typically, the technology a deep tech startup is developing is the result of years of research and lab testing and requires a longer period to reach market viability.

To qualify for Startup SG, startups must meet the following requirements:

  • Be a Singapore-based company
  • The core operations of the company must take place in Singapore
  • Be incorporated as a private limited company for fewer than 5 years.
  • Have paid-up capital of at least S$50,000.
  • Be able to prove substantial innovative and intellectual property.
  • Have high-growth potential with clear scalability for the international market.
  • Have identified an independent third-party investor.
  • The business must not be involved in gambling, tobacco-related products, or any other activities which are in violation of law, or against public interest.
  • The company cannot be a subsidiary or joint-venture.

Angel Investors Tax Deduction (AITD) scheme: AITD is open to angel investors who can invest a minimum of S$100,000 in a qualifying startup. Approved angel investors receive a tax deduction of 50% of the total investment at the end of a two-year holding period. Note that the maximum deduction is S$250,000.

The following individuals qualify for AITD:

  • Experienced angel investors
  • Successful serial-entrepreneurs
  • Business executives or senior management professionals

Qualifying individuals must also be able to provide business guidance and mentorship to startups.

Early-Stage Venture Funding Scheme (EVFS): EVFS is run by the National Research Foundation (NFR) of Singapore. Under EVFS, the NFR provides 1:1 matched funding up to S$10 million for venture capitalist firms to invest in innovative startups. Since its inception in 2008, EVFS has invest in 15 venture capitalist companies.

Government Sponsored Incubators

Startup SG Accelerator: Startup SG Accelerator provides funding for incubators that help develop and mentor new startups in high growth industries. So far, the Startup SG Accelerator program works with the following firms:

  • AIT Ventures: Works with early-stage and seed stage medtech startups.
  • DeClout Investments: Works with seed stage and series A startups in fintech, data analytics, smart logistics, cybersecurity.
  • EnchantVC: Works with early-stage startups specializing in hardware for consumer use, and IoT.
  • Jungle Ventures: Work with seed stage, series A, and series B startups in manufacturing, transportation, smart home, fitness, and healthcare.
  • Mediapreneur: Works with seed stage startups in digital media.
  • SEAMO Ventures: Works with early-stage startups specializing in enterprise IoT.
  • ST Electronics: Works with startups specializing in robotics and IoT.
  • Supply Chain and Logistics Innovation Playground (SCLIP): Works with early-stage and seed stage logistics startups.
  • TNB Accelerator: Works with early-stage, seed stage, series A, and series B startups in IoT, AR/VR, machine learning, and robotics.
  • Trendlines Medical Singapore: Works with early-stage, seed stage, and series A medtech startups.
  • Velocity Accelerator: Works with startups in finance, health, education, smart infrastructure, food and agriculture.
  • Venturecraft: Works with early-stage, seed stage, series A, and series B medtech startups.

Business Loans

SME Micro Loans: Companies with viable products or services and fewer than 10 employees can access working capital financing of up to S$100,000 to support day-to-day business operations. To learn how to apply, please see the SME Micro Loans page.

Loan Insurance Scheme (LIS): LIS helps companies secure trade finance loans. Under the scheme the Singapore government will pay a portion of the insurance premium for the trade finance loan. Furthermore, the Singapore government will underwrite loans that are beyond the capacity of a commercial issuer. To learn how to apply, please see the Loan Insurance Scheme page.

SME Working Capital Loan: Singapore SMEs can receive an uncollateralized loan of up to S$300,000 to provide working capital for the business. To learn how to apply, please see the SME Working Capital Loan page.

Tax Incentive Schemes

Tax Exemption for Startups: Under the scheme, new startups are given a full tax exemption on the first S$100,000 of taxable income and a 50% exemption on the next S$200,000 during the startup’s first 3 years of business. Note that from Year of Assessment 2020 this incentive will be reduced as follows: new startups will be given 75% tax exemption on the first S$100,000 of taxable income and 50% exemption on the next S$100,000 during the startup’s first 3 years in business.

Investment Allowance: Under an investment allowance, companies can receive a tax credit of up to 100% of the capital expenditures incurred for qualified projects during a tax year. Singapore permits the investment allowance for a period of 5 years; however, certain cases can extend up to 8 years. Qualifying projects include:

  • Manufacturing new products or increasing production of existing products
  • Projects requiring specialised engineering or technical services
  • Projects focused on R&D Construction operations
  • Projects to reduce water consumption
  • Projects that promote the tourism industry in Singapore (other than a hotel)
  • Operations involving space satellites
  • Maintenance, repair and overhaul services to any aircraft
  • Projects that improve energy efficiency

Productivity and Innovation Credit (PIC) Scheme: PIC offers companies a 400% tax deduction or allowance on certain expenditures incurred in any of the following six qualifying activities:

  • Training employees
  • Acquiring and licensing intellectual property rights
  • Registering patents, trademarks, designs and plant varieties
  • R&D activities
  • Design projects approved by DesignSingapore Council

Development and Expansion Incentive (DEI): DEI rewards companies with up to a 10% tax break on income for qualifying activities. Companies must plan to expand their presence in Singapore or invest in projects that advance key growth industries such as manufacturing.

Double Tax Deduction for Internationalisation (DTDi): DTDi provides companies a 200% tax deduction on eligible activities that help a company expand into overseas markets. Examples of such activities include:

  • Market surveys and feasibility studies
  • Overseas business development trips
  • Overseas trade fairs
  • Overseas advertising
  • Overseas trade offices
  • Master Licensing and Franchising

Merger and Acquisitions allowance: To support business expansion through company acquisition, Singapore allows SMEs to write off 25% of the value of a merger or acquisition over a 5 year period. Note that the total write-off is capped at S$10 million. To qualify for the Merger and Acquisition Allowance, companies must be incorporated and be a tax resident of Singapore. If the acquiring company is owned by a parent company, the parent company must also be incorporated and a tax resident in Singapore.

Expert Advice

With all the government business assistance schemes, it is essential to evaluate whether they are applicable to your business. It is best to seek the expert advice of a corporate service provider who can analyze your business and provide guidance on the schemes and incentives that fit best for your business.

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