Singapore corporate funding in 2023
Since 2003, Healy Consultants helps Singapore companies with corporate funding by i) securing micro loans for eligible startups ii) securing government grants for both new and established companies and iii) identifying key tax incentives for multinational companies considering relocating to Singapore or establishing a subsidiary in the country. Please find below a detailed overview of loans and tax incentives available in Singapore.
Loans available to new start ups
- Loans of up to $100,000 for local SMEs with 10 or less employees. Minimum 5.50% interest rate for loan tenure of 4 years and below. Primarily for daily operations or for automating and upgrading factory and equipment. * Subject to Participating Financial Institutions’ assessments of risks involved;
- To apply for this micro loan our Client i) must be registered in Singapore and ii) have 10 or less employees OR has annual sales not exceeding S$1 million iii) have at least 30% local shareholding and iv) must be part of a Group whose annual sales are less than S$100 million OR workforce is less than 200.
How to apply for Singapore corporate funding?
Healy Consultants will guide our Clients through the loan application process including pre-assessing our Clients eligibility, liaising with the financial institutions on our Clients behalf and negotiating the terms of the funding. Below is an overview of the application process:
Before submitting an application
- To ensure that our Client’s business qualifies for the micro loan, Healy Consultants in-house experts will prepare a detailed business plan and SWOT analysis to be submitted to the bankers for a preliminary approval and feedback on the application;
- Our Clients must provide Healy Consultants with due diligence documents supporting the pre-application including i) ACRA business profile of the Singapore company ii) audited accounts or financial statements certified by a Singapore CPA iii) latest 6 months bank statements and iv) personal income tax assessment of the company shareholders and directors.
Submitting the application for a micro loan
- After receiving a written confirmation from banks or finance companies, Healy Consultants will complete and submit a formal application together with other supporting due diligence documents and business plan. Click on the links to view a sample of SPRING Singapore application form and an application form guide;
- Our Clients should expect micro loan approval from the banks or financial institutions within 3 weeks of application submission Depending on the size of the loan, nationality of directors and shareholders and the business activity the lending entities may revert requiring additional due diligence documents before providing a final decision;
After micro loan approval
- Upon successful application for Singapore corporate funding, our Clients must keep proper records of repayment deadlines and ensure repayments are completed on time. Repayments start 1 month after disbursement of the loan.
Singapore financial institutions providing micro loans
The participating Financial Institutions providing corporate funding in Singapore are:
- Banks: DBS, Malayan Banking Berhad, OCBC, RHB Bank Berhad, The Bank of East Asia, HSBC and UOB;
- Finance companies: Hong Leong Finance, Ethoz Capital, IFS Capital, ORIX Leasing Singapore.
Assistance to apply for Government grants and tax incentives
Singapore has one of the world’s most comprehensive array of government grants available to both locally owned companies and foreign companies establishing a presence in Singapore. The grants focus on various aspects and include i) improvement of capability of SMEs ii) foster innovation and development of tech companies and iii) encourage internalization of local enterprises. Below is a sample of grants available:
Training and development grants
Grant name (click link for more information) Description Capability Development Programme (CDP) Subsidy covering up to 70% of costs to upgrade equipment, staff training and external consultancy for eligible growing businesses. International Business Fellowship (iBF) Develop manpower talent with in-depth knowledge of doing business in Central Asia, China, India, Indonesia, Latin America, the Middle East, Russia and Vietnam. Innovation & Capability Voucher (ICV): Voucher worth S$5,000 to pay for capability upgrading services at participating service providers. SME Talent Programme: Subsidy to hire students from ITEs and Polytechnics. SPRING Capability Development Grant Capability upgrading programmes tailored for each business. Local Enterprise and Association Development Programme Financial assistance for business associations. Workforce Training & Upgrading (WTU) Scheme Funding support for training courses offered by BCA Academy or BCA Approved Training and Testing Centres (ATTC). Enterprise Assistance Grants for productivity improvements and digital migration for media companies. Production Assistance Up to 40% funding for media production hiring Singapore talents or incurring project expenditure in Singapore. Business Improvement Fund The Singapore Tourism Board offers funding to businesses to redesign their business models, processes and systems. CITREP Expanded A grant to train infocomm professionals in critical, emerging and specialised infocomm technologies.
Research, patents and intellectual property grants
Grant name (click link for more information) Description Co-Innovation (CI) Partnership Funding to improve Singapore’s public services and work with any Government agency. Singapore Israel Industrial Research And Development Foundation (SIIRD) Up to US$1,000,000 in funding to jointly develop products, solutions or technology with high-tech Israeli companies. Research Incentive Scheme For Companies (RISC) Defrays cost of research and development activities in the areas of strategic technologies and to increase the company’s industrial competitiveness. Incubator Development Programme (IDP) Assistance for incubators and venture accelerators to enhance their programmes and services to nurture innovative start-ups. Innovation For Environmental Sustainability (IES) Fund Grant for environmental sustainability projects. Partnerships for Capability Transformation (PACT) Grant promoting strategic linkages between small and medium enterprises (SMEs) and large enterprises (LEs); Healthier Choice Symbol (HCS) New Product Development Grant Are you a food manufacturer? Get S$5,000 to refine your food prototype or product for Healthier Choice Symbol certification. Environment Technology Research Programme (ETRP): Grant to undertake Clean Environment research and development (R&D) in waste management. FINEST Food Programme: Funding to develop healthier functional food products that provide health benefits beyond basic nutritional value. Healthier Choice Symbol (HCS) New Product Development Grant: S$5,000 to refine food prototype or product for Healthier Choice Symbol certification. Design Business Innovation Grant (DBIG): Grants for design-driven business researching innovative design solutions. Development Assistance: Funding for media product development of a creative project.
Grant name (click link for more information) Description International Human Resource Strategy Development Funding for companies with global aspirations and a clear internationalization plan to engage HR consultants to plan the growth. International Marketing Activities Programme: Subsidies for joining Singaporean Chamber of Commerce or Trade Associations at overseas trade fairs and business missions. Market Access Incubation Programme: Assistance for start-ups going to overseas business missions and trade fairs run by incubators. Market Readiness Assistance: Subsidies market assessment and entry costs for Singaporean companies expanding internationally. Marketing Assistance Financial support for media companies and professionals to market and promote their production overseas.
Singapore investment incentives
Singapore aims to attract innovative entrepreneurs who bring new technologies to the market and add value to the local economy. One government department, Enterprise One, has the specific aim of sparking enterprise and creating incentives for entrepreneurs. Following is information about such government incentives, grants and other benefits available from Enterprise One for Singapore incorporation:
Singapore incorporation incentives
- Examples of Enterprise One grants available for start-ups in Singapore are i) ACE startups grant that provides first-time entrepreneurs up to S$50,000 in co-matched funds and the ii) ideas.inc Business Challenge, that provides up to S$65,000 of funding as well as mentorship, for young entrepreneurs to advertise and innovate their business and idea;
- Tax incentives available for start-ups in Singapore are i) R&D Incentive for Start-Up Enterprises (RISE) Scheme, that provides up to S$20,250 to companies spending at least S$150,000 in research and development in the first 3 years of business ii) tax exemption for start-ups, giving 0% tax on the first S$100,000 of income in the first 3 years of business and 50% tax exemption on the next S$200,000 of income;
- Equity financing available for start-ups in Singapore are i) Business Angel Funds (BAF), providing S$1 investment from SPRING SEEDS capital for every S$1 investment from a recognized Business Angel Group up to a maximum of S$1.5 million from SPRING SEEDS, ii) Early Stage Venture Funding Scheme (ESVF), that provides up to S$10 million by giving S$1 from the National Research Foundation (NRF) for every S$1 invested by a third party investor – for technology start-ups only and iii) Spring Start-Up Enterprise Development Scheme (SPRING SEEDS), that provides S$1 for every S$1 invested, up to a maximum of S$1 million, in the funding of creating new and better products, processes and applications
Other Singapore investment and tax related incentives
Startup Enterprise Development Scheme (SEEDS)
- According to the Singapore Economic Development Board (EDB), investors who have set up a Company in Singapore can apply for SEEDS equity financing. Every dollar raised by the startup from third-party investors is matched by the EDB, up to S$1million, upon investment approval). The minimum investment by the third party is S$75,000 cumulative. Under this scheme, both the EDB and third-party investors take equity stakes in the company in proportion to their investments;
- To take advantage of this scheme, a Singapore Company must be:
- A legal entity that has previously secured total debt and equity financing of not more than S$500,000 (US$406,000);
- Involved in the development of innovative products, processes and applications in manufacturing and services;
- Incorporated in Singapore and carry out its core activities in Singapore.
Technology Enterprise Commercialisation Scheme (TECS)
- TECS supports the growth and development of innovative and technologically competitive enterprises. The program supports the start up of new enterprises with strong technology intellectual property and a scalable business models. TECS recognizes the risk and costs required for the development of cutting edge technology and hence rewards a grant for competitiveness in commercial and technical viability;
- Reimbursement costs can include:
- Proof of Concept (POC) – Up to 100% of qualifying costs for each project, maximum of S$250,000;
- Proof of Value (POV) – Up to 85% of qualifying costs for each project, maximum of S$500,000.
Tax Incentive for Angel Investor Scheme
One Singapore investment option for high net worth entrepreneurs is an incentive program offered via Spring Singapore, called the Angel Investor Tax Deduction Scheme, or AITD. The program aims to encourage investment in Singapore start-ups, via an enticing tax deduction of 50% of the investment cost up to a maximum of $500,000 per year. To qualify the ‘Angel Investor’ must be an individual and possess entrepreneurial experience or senior corporate management experience.