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Startup funding and tax support

last updated 30 January 2019

Government assistance programmes give businesses a helping hand.

support for startups
Startups can get support from government assistance programmes such as the Technology Enterprise Commercialisation Scheme.

In this final roundup of Government assistance programmes, we look at where startups can turn to for help with funding, and provide a summary of tax-related support for SMEs and infocomm companies.

Startup Funding

Business Angel Scheme (BAS)
Agency: SPRING Singapore

Objectives
This scheme brings together business angels to invest in startups, with a matching investment from SPRING SEEDS Capital, up to a maximum of S$1.5 million. The startup will need to obtain a minimum investment of S$75,000 from one of three pre-approved business angel groups – BAF Spectrum Pte Ltd, Sirius Angel Fund or Accel-X Pte Ltd.

Coverage

  • S$1.5 million of equity investment (up from S$1 million)
  • From December 2008 to November 2009, SPRING SEEDS Capital will match two dollars for every dollar invested by one of the three pre-approved angel groups (up from one-for-one)

 

Eligibility

  • Company must be less than five years old
  • Company needs to obtain a minimum investment of S$75,000 from one of the three pre-approved business angel groups.
  • Startups which are already receiving funding under SEEDS or the Growth Financing Programme cannot apply under BAS.

 

Contact:
BAF Spectrum Pte Ltd
Ms Jenny Law
Tel: (65) 6777 7139; Fax: (65) 6777 7140; Email: jennylaw@bafspectrum.com
Website: www.bafspectrum.com

Sirius Angel Fund
Ms Linda Chan
Tel: (65) 6225 2686; Fax: (65) 6225 1798; Email: angels@sirius.com.sg
Website: www.sirius.com.sg

Accel-X Pte Ltd
Mr Edmund Yong
Tel: (65) 6516 5451; Email: admin@accel-x.com

EnterpriseOne
Hotline: (65) 6898 1800; Email: enterpriseone@spring.gov.sg


SPRING SEEDS (Startup Enterprise Development Scheme)
Agency: SPRING Singapore

Objectives
This scheme provides support for startups that are creating innovative or intellectual content with strong potential for success in international markets.

Coverage

  • Up to S$1 million of equity investment
  • From December 2008 to November 2009, SPRING SEEDS Capital will match two dollars for every dollar invested by a third party investor (up from one-for-one)

 

Eligibility
The startup must

  • be less than five years old in Singapore
  • have a paid-up capital of at least S$50,000 but not more than S$1 million
  • carry out its core activities in Singapore
  • be involved in developing new or better products, processes and applications
  • have a minimum investment of S$75,000 from a third party

 

Contact:
EnterpriseOne
Hotline: (65) 6898 1800; Email: enterpriseone@spring.gov.sg or SEEDS@spring.gov.sg


Technology Enterprise Commercialisation Scheme (TECS)
Agency: SPRING Singapore

Objectives
TECS enables technology-oriented startups and small and medium enterprises (SMEs) to get a grant to develop their technology ideas at conceptualisation stage and trial test their prototypes.

Coverage
Proof of Concept (POC):
For applicants who wish to develop proprietary ideas at conceptualisation stage: Up to 100 per cent of qualifying costs for each project will be supported, up to maximum of S$250,000.

Proof of Value (POV):
For applicants who are keen to carry out further research and development on a technology project, including the development of a working prototype: Up to 85 per cent of qualifying costs for each project will be supported, up to maximum of S$500,000.

Qualifying costs include:

  • Manpower-related costs
  • Professional services
  • Equipment/software
  • Intellectual Property Rights
  • Materials and consumables
  • Other operating expenditure

 

POV funding will also include support for prototyping-related services.

Eligibility
Technology-oriented startups and SMEs who meet the following criteria:

  • 30-100 per cent of the shareholding is local
  • group fixed assets do not exceed S$15 million
  • have no more than 200 employees (for companies in the services sector)
  • are physically present in Singapore
  • have been registered/incorporated no more than five years at the time of the award
  • have at least one in-house technology engineer or scientist

 

Individual principal investigators, research scientists and engineers from public sector research organisations (non-Institute of Higher Learning) are also considered for funding under the Proof of Concept phase.

Contact:
EnterpriseOne
Hotline: (65) 6898 1800; Email: enterpriseone@spring.gov.sg


Tax (Rates/Rebates/Allowances)
Agency: Inland Revenue Authority of Singapore (IRAS)

Corporate Income Tax (Rate Cut)

Objective
To help maintain Singapore’s competitiveness.

Coverage
The corporate income tax rate will be reduced from 18 per cent to 17 per cent, with effect from Year of Assessment (YA) 2010.

Eligibility
All companies.

Contact:
Tel: 1800-356-8622; Email: ctmail@iras.gov.sg


Enhancement of Carry-Back Relief for YA2009 and YA2010

Objective
To allow companies to carry-back unutilised capital allowances and trade losses.

Coverage
Unutilised trade losses and capital allowance for YA2009 and YA2010 can be carried back and set off against the Assessable Income for three immediately preceding years of assessment (compared with only the current year of assessment under the previous Carry-Back Relief), up to a limit of S$200,000 (previously S$100,000). Companies can make provisional claims for tax refunds based on estimated losses instead of waiting for the finalisation of chargeable income and tax assessments.

Eligibility
All loss-making companies.

Contact:
Tel: 1800-356 8622; Email: ctmail@iras.gov.sg


Enhancement of Tax Deduction for Capital Expenditure Incurred on Renovation or Refurbishment Works

Objective
Capital allowance claim for renovation and refurbishment.

Coverage
Renovation costs that currently do not qualify for revenue deduction or capital allowance claim. Businesses that incur qualifying renovation and refurbishment expenses in the basis periods for YA2010 and YA2011 can deduct such expenses in one year instead of over three years, subject to the cap of S$150,000 for each relevant three-year period.

Eligibility
All businesses.

Contact:
Tel: 1800-356-8622; Email: ctmail@iras.gov.sg


Enhancement of Capital Allowance Granted In Respect of Plant or Machinery acquired for YA2010 and 2011

Objective
Capital allowance claim for plant and machinery for purpose of a trade, profession or business.

Coverage
Accelerated write-down of capital allowance (CA) will be allowed on plant and machinery acquired in the basis periods for YA2010 and YA2011. CA is computed based on 75 per cent of the capital expenditure for the first YA and 25 per cent of the capital expenditure for the second YA. Previously it was computed on a straight-line basis over three years.

Eligibility
All businesses.

Contact:
Tel: 1800-356-8622; Email: ctmail@iras.gov.sg


Tax Exemption of Foreign-sourced Income Received in Singapore

Objective
Tax exemption of foreign sourced income received in Singapore.

Coverage
Resident non-individuals and resident partners of partnerships in Singapore will enjoy tax exemption on all foreign-sourced income earned or accrued on or before 21 January 2009 and remitted to Singapore from 22 January 2009 to 21 January 2010 (both dates inclusive).

Eligibility
All companies.

Contact:
Tel: 1800-356-8622; Email: ctmail@iras.gov.sg


40 per cent Property Tax Rebate for Commercial and Industrial Properties

Objective
Assistance to manage costs of property.

Coverage
A 40 per cent property tax rebate will be given to owners of commercial and industrial properties for calendar year 2009.

Eligibility
All companies.

Contact:
Tel: 1800-356-8600; Email: propertytax@iras.gov.sg


Extension of the Tax Exemption Scheme for New Start-up Companies to Companies Limited by Guarantee

Objective
Extension of the tax exemption for new start-up companies to companies Limited by Guarantee.

Coverage
Currently, tax exemption is granted to an eligible start-up company, limited by shares, during the first three YAs of its incorporation. Tax exemption is granted on the first S$100,000 of normal chargeable income and 50 per cent of the next S$200,000 of normal chargeable income. Companies Limited by Guarantee will qualify for the tax exemption scheme for new start-up companies from YA2010.

Eligibility
All companies.

Contact:
Tel: 1800-356-8622; Email: ctmail@iras.gov.sg


Accelerated Writing-down Allowance for Acquisition of Intellectual Property for Media & Digital Entertainment Content

Objective
Accelerated write-down allowance for intellectual property for Media & Digital Entertainment (MDE) content.

Coverage
Currently, expenditure incurred in acquiring intellectual property can be written down over five years. Expenditure incurred by an MDE company or partnership in acquiring intellectual property from 22 January 09 – 31 October 13 can be written down in two years, subject to approval from the Economic Development Board.

Eligibility
All companies including partnerships.

Contact
Tel: 1800-356-8622; Email: ctmail@iras.gov.sg

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