Singapore is one of the most business-friendly countries in the world. As of March this year, Singapore overtook Silicon Valley as a hub for new tech companies: around 1,600 to 2,400 tech start-ups now benefit from government grants. Of course, it’s not just tech companies that benefit. Here are the grants you need to know about:
- The Productivity and Innovation Credit (PIC) Scheme
The PIC scheme provides tax benefits to companies, from the year 2011 to 2018. The scheme provides for tax deductions of 400 per cent (up to $400,000), and cash pay outs of up to $100,000 in six different types of expenditures. These are:
- Acquisition and leasing of PIC IT and automation equipment
The scheme provides 100 per cent tax write-offs, for selected IT or automation equipment. The list of acceptable equipment can be found here. In general, this is equipment such as software for warehousing and inventory, or automated packing and assembly machines.
- Training of employees
Employee training is subject to PIC benefits, provided the training meets the criteria on this list.
- Cost of registering patents, trademarks, designs, and plant varieties
This is for companies that need to buy patents, trademarks, and copyrights on intellectual property they create. PIC benefits can be claimed on costs incurred.
- Acquisition and licensing of Intellectual Property Rights (IPRs)
Sometimes, your business needs to license or buy IPRs. For example, you may need to buy a license to use technologies developed by an outside software company, to run your own web store. You can claim PIC benefits on these.
- Research and Development (R&D)
This is for businesses that need to develop new products or processes, or that are trying to extensively modify existing ones. For example, if your apparel company wants to research the use of a new type of fabric, or a new way to mass produce garments, these benefits would apply. You can check the list of eligible activities here.
- DesignSingapore Council Projects
If you have design projects approved by the DesignSingapore Council (DSg), you can claim up to 100 per cent of staff costs for in-house activities, and 60 per cent of costs for out-sourced design activities. You can find out more about DSg and its activities here.
To qualify for the PIC grant, you need only be a Singapore registered SME, with at least three full-time employees.
- The Capability Development Grant (CDG)
The CDG has two main goals. The first is to help Singapore based SMEs become sustainable in the long run. The second is to help already established SMEs to scale up, allowing you to service wider segments of the market, or even expand your business overseas. The CDG absorbs up to 70 per cent of project costs, in the following areas:
- Branding and marketing
- Business excellence
- Business model transformation
- Standards adoption
- Financial management
- Human capital development
- Intellectual property
- Productivity enhancement
- Service excellence
- Product development
To qualify for the CDG, your business must be registered and operating in Singapore. At least 30 per cent of the business must be held by Singaporean shareholders, and your annual sales cannot exceed $100 million. In addition, your business must have no more than 200 employees.
Extra option: the CDG WorkPro Job Redesign Rider
From now till 30th June 2019, companies that have completed a project under the CDG can also apply for the WorkPro Job Redesign Rider (JR Rider). If the project can be shown to have benefitted older workers, such as by reducing physical workloads or retaining older workers, the JR Rider increases funding support for future projects to 80 per cent. Alternatively, your business can get $20,000 for each older worker who benefits (whichever amount would be lower).
iSPRINT is offered by the Infocomm Media Development Authority, to help businesses develop their IT assets. It is the most simple and straightforward grant on this list. iSPRINT provides up to 70 per cent funding for selected “off-the-shelf” or “pay-per-use” solutions. For example, if you are buying accounting software, iSPRINT will cover up to 70 per cent of the cost if it’s on their approved list. You can see what products or services are accepted on their website (note: the product list does change, so check more than once). Note that the key difference between iSPRINT and the CDG / PIC grants is that iSPRINT applies to buying pre-packaged solutions. It doesn’t provide funding for customised IT solutions. The requirements for iSPRINT are similar to the requirements for the CDG. You must be a Singaporean company, at least 30 per cent owned by local shareholders, with an annual turnover of $100 million or under; you cannot have more than 200 employees.
Which one do I use? They all seem to overlap
There are some overlaps between them, but here are some general guidelines: If you’re a start-up and want to do something totally new, such as putting together a brand-new product or service, the PIC is the grant to go for (due to its high support for research and development, and intellectual property rights). If you’re a more established SME (no longer a start-up), and you’re looking to reach your “next level”, the CDG might be your best bet. You should have a clear idea of which aspect of your business needs to be expanded; be it better staff training, building a call centre, or developing a better website. If you already know what you need to buy – and you can purchase it right off the shelf – use iSPRINT to defray the cost.
Having the grant is just a start
It’s not just about having the money, it’s about knowing what to do with it. If you don’t have a clear plan, you run the risk of wasting the grant money. There’s no point getting a $20,000 grant, and then squandering it by overspending on an elaborate, non-functional website. For step-by-step solutions, speak to one of our expert consultants at Synagie.com. They’ll be able to help you with everything from warehousing, down to building a proper inventory system. A five-minute conversation with us could save you five months of painful trial and error.