Small and Medium Enterprises (SME)

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Small businesses are privately owned corporations, with a small number of employees, and low operating revenue. Small businesses can come in the form of sole proprietorships, partnerships or private limited companies. In the European Union a small business is determined by having fewer than 50 employees, and in America, 100 employees. Medium Enterprise is generally referred to, in Europe, as having fewer than 250 employees and, in the US, as fewer than 500 employees.

While large multinational corporations (MNC) account for a significantly higher portion of global GDP, SME’s are crucial for the successful functioning of niche markets and developing economies. Being a small company, there is less bureaucratic red tape allowing the company to make quick decisions in a modern society that embraces quick fads and market swings.

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The potential risks associated with operating a Small and Medium business in Asia has scared many away from entrepreneurialism. In an effort to nurture the SME sector and promote growth many governments have offered a large array of incentives supporting newly formed enterprises.

In Singapore some of the more notable schemes include:

i) Business Angel Funds

The start-up must be incorporated in Singapore, with all core activities being practiced domestically. For instance, its corporate Headquarters should be Singapore, with top management residing locally. The start up can be foreign owned. The Economic Development Board will match every dollar of start-up capital, up to a maximum sum of S$1.5 million.

ii) Tax Exemption For Start-Ups

The business must be a tax resident of Singapore, incorporated in Singapore, and have no more than 20 shareholders. Tax exemption is given to the first S$100,000 of chargeable income, and a further 50% exemption is given on the next S$200,000 of normal chargeable income.

iii) SPRING Singapore

Solely aimed at nurturing the domestic SME sector. They assist with financing, capabilities, and management development. For instance, SPRING SEEDS offers to match dollar for dollar a company’s startup capital up to a maximum of $300,000.

An example of a scheme utilised in Hong Kong is the SME Loan Guarantee Scheme (SGS).

Under Hong Kong legislation, an SME is defined by a manufacturing business which employs fewer than 100 persons, and less than 50 in a non-manufacturing business. The SGS caters to a large array of applications; business installations and equipment loans, guarantee for working capital loans. All applications must be lodged through the appropriate participating lending institutions (PLIs). The loan is subject to a maximum amount of HKD$6 million. The loan is based on a flexible repayment system over a period of up to 5 years and promotes competitive interest rates.

Healy Consultants caters to a large number of clients, the majority of which are in fact small and medium sized Enterprises. As such, many of the company incorporation procedures and tailored packages have been developed with SMEs in mind. From opening bank accounts and personalized tax planning to virtual offices, Healy Consultants can help incorporate an SME in the best possible fashion.

Contact Us

For more information on incorporating a Small to Medium Enterprise (SME), please email email@healyconsultants.com or call us at (+65) 6735 0120.

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