How Do You Get a Business Grant in Singapore? Update 2024
Powering Singapore's economy are the various startups and SMEs, currently employing almost two-thirds of Singapore's workforce. The government is known for its ardent support for these business entities, so numerous grants are made available for them.
These grants give SMEs and startups the ability to upgrade their capabilities and internationalization. In other words, Singapore makes sure that its SMEs and startups are internationally competitive. It's no surprise that Singapore is a popular choice for company registration among entrepreneurs.
Generally speaking, grants are different from business loans. They are similar because of their financial assistance benefits, but the most significant difference lies in repayment. Business loans are required to be repaid within the agreed time frame while grants do not burden you with the obligation of repayment.
But the application process for grants is more stringent than applying for a loan. The funds provided by grants may be less than what you could get out of a business loan. But this varies because one grant is different from the other.
What Activities are Financed by a SME Grant?
Start-up Grants
If you're a startup founder, you can get your startup capital through grants. Some grants will also finance POV (Proof of Value) and POC (Proof of Concept).
You can use the grants to:
Fund and conduct technical viability studies for your POCs that will enable you to determine whether or not there is existing technology in the market or if you could expand on it.
If you already have a working concept or prototype, you can use these grants to assess the POV or commercial value by comparing production costs and the price that your customers are willing to pay for.
SME Grants
Business owners can use various SME grants to help finance various projects meant to help the business grow and make it more efficient.
You can use these SME grants to:
Improve on your existing product, develop new products, or improve the work process.
Acquire new business software and the hardware needed to run it. The grant can also be used to train the workforce dedicated to using the software.
Expand businesses abroad, participate in the International Trade Fair, or conduct market studies.
What are the Agencies that Handle Business Grants?
Enterprise Singapore - The government agency tasked with providing most of the SMEs and startup grants. They also offer different types of supports, ranging from company setup to loan assistance to tax rebates.
Enterprise Singapore also runs the Startup SG Portal, which we'll discuss later in this article.
Other government agencies can provide you with grants for specific industries, e.g.
What Are the Criteria for Eligibility?
Enterprise Singapore and the other agencies are transparent when it comes to eligibility for these grants. Most of the grants are meant for SME's, so your business must meet that criterion first and foremost.
To qualify as an SME in Singapore, your company needs to:
Company group annual sales turnover should not exceed S$100 million
Be registered and is currently operating in Singapore
The company's group employment size should not exceed 200 workers
Have a minimum of 30% local shareholding
Companies with local shareholding will enjoy more opportunities and benefits from the government's financial support than foreign-owned companies.
How Do You Apply For A Grant?
The application process for these grants can be done online, including the submission of the required documents. Some grants will need a personal presentation of the project in front of the evaluation committee.
SME grant applications can be submitted via the Business Grants Portal. This is the one-stop platform that will allow you to submit and track numerous grant applications. You'll need a CorpPass to login to the website.
What is Startup SG?
Startup SG is the agency that unifies all the support schemes and grants for startups and SMEs in Singapore.
It provides entrepreneurs with a platform for accessing local support programs and initiatives and connection to a global network of entrepreneurs. Apart from business grants, Startup SG also provides you with loans, funding, and capability-enhancement.
This platform aims to cater to every possible company (established or otherwise) in the startup ecosystem. This is made possible through the six pillars of the platform:
Startup SG Founder
The Startup SGB Founder aims to provide capital grants and mentorship for first-time entrepreneurs with innovative ideas. Under this initiative, SPRING (Standards, Productivity, and Innovation Board) matches $3 for every $1 raised by the founder. Applicants are sifted through with the help of their appointed AMP or Accredit Mentor Partners.
The application process is as follows:
Contact one of their AMPs or Accredited Mentor Partners and submit your form directly through them.
The selected AMP will evaluate your application based on the criteria listed below:
Feasibility of a business model
Uniqueness of concept
Strength of the management team
Potential market value
You will be notified within five working days of the result of the application.
If you're approved, you will receive a Letter of Offer coming from Enterprise Singapore, and your AMP will start to mentor you over the next 12 months.
Grants are disbursed once businesses meet certain milestones.
AMP's may take up no more than 50% equity of your startup, so you should discuss their equity terms and other concerns before applying.
Startup SG Tech
Startup SG Tech aims to provide early-stage funding to companies aiming to commercialize their proprietary technology. This includes both POV and POC, depending on the product's developmental stage.
This is a very competitive grant because it allows startups to fast-track their technology development and will enable them to create a scalable business model.
There are three stages in the application process:
Fill up the Registration of Interest Form accompanied by a summary of the proposed project to this email: enquiry@enterprisesg.gov.sg.
If you're eligible for the grant, Enterprise Singapore will require you to submit a formal application, including a business proposal and the project's cost breakdown.
The project is then evaluated based on technical feasibility, commercialization, and innovativeness.
Short-listed applicants are required to present their proposals to an evaluation panel composed of experts from their industry.
For more information, you can check out the Startup SG Tech page on the grants provided and the process.
Startup SG Equity
This pillar of Startup SG allows the Singapore government to co-invest with third-party investors in a startup. This is aimed to encourage private sector investments into Singapore-based technology that are innovative and with global market potential.
The government will only co-invest if the third-party investors or individual is prepared to invest at least S$50,000 and provide the startup with experience, relevant business contacts, and technical expertise.
The co-investment ratio with third-party investors is 7:3 up to S$250,000 and 1:1 after that with an investment cap of S$2 million for general tech companies.
Deep tech companies enjoy the ratio of 7:3 for up to S$500,000 and 1:1 after that, capped at S$4 million.
Startup SG Accelerator
This scheme will provide funding and other non-financial support for incubators and accelerators that work in strategic growth sectors to enhance the programs and expertise necessary for mentoring these startups.
The funding support covers partial operating expenses, ranging from salaries to hiring the mentors, program development costs for new products and services, improvement of market access, and further business financing.
Startup SG Talent
This pillar handles EntrePass, STP or SME Talent Program, and T-UP or Technology for Enterprise Capability Upgrade for startups.
EntrePass is a work-pass scheme designed to facilitate global entrepreneurial talent entry and retain them within the country.
T-UP is meant for helping businesses build or sustain their in-house R&D (research and development) capabilities by providing them with access to talent from A* STAR's Research Institutes. They also subsidize up to 70% of research scientists and engineers' secondment costs for up to 2 years.
SME Talent Program is run by Action Community for Entrepreneurship or ACE and provides 70% subsidy in allowances or salaries paid to interns and assisting startups with improving their human capital development capabilities.
Startup SG Loan
This pillar works with various financial institutions' participation to provide government-backed loans, allowing startups to acquire their working capital and financing for equipment and trade.
The pillar also covers SME Micro Loans, which are designed for companies with less than ten employees. They can give entrepreneurs access to as much as S$100,000 to support daily business operations.
The SME Venture Loan is similar to the Micro Loans and meant for high-growth companies. They give access to financing of up S$5 million to expand the business.
Singapore Government Grants for SME's
Startup SG will always be your primary source of government funding, but there are also substantial grants outside the agency. These are going to be worth your time and effort in applying for them.
Enterprise Development Grant (EDG)
EDG is a program created by Enterprise Singapore. It aims to support projects to help Singapore businesses, including startups, strengthen their business foundations, improve productivity, and even expand overseas expansion.
The EDG will cover up to 70% of qualifying project costs, your qualification for SME categorization, and other costs pertaining to software and equipment.
To apply for EDG, you need to:
Identify the key project category you want to use, followed by the service providers that will support your project. The categories you can apply for are:
Innovation and Productivity
Market Access
Core Capabilities
Log in to the Business Grants Portal and submit the project proposal. You can find the link to various project proposal templates here.
The grant application will then be assessed based on project outcomes, the service provider's competency, and your project scope. It takes about 8 to 12 weeks to process the application.
You'll receive a Letter of Offer once your grant is approved. This letter will contain the conditions of the grant and the corresponding amount to be awarded.
Productivity Solutions Grant (PSG)
PSG is intended to support companies interested in developing IT solutions and equipment to enhance their productivity and business processes.
The PSG will cover up to 70% of the costs associated with investing in HRMS or Human Resource Management Systems, CRMS or Customer Relationship Management Solutions, and other long-term technology solutions.
To apply for the PSG, you'll have to:
Check with Tech Depot on the SME Portal and go through the list of approved IT solutions and equipment.
Get a quote from the chosen IT solution provider or equipment supplier either from the pre-approved vendor or a vendor you sourced.
Apply through the Business Grants Portal
You can read up more about the PSG direct from Enterprise Singapore's website.
VentureForGood (VFG) Grant
This grant is provided by the Singapore Centre for Social Enterprise or raiSE with support from the Ministry of Social and Family Development.
You can apply and receive grants up to S$300,000.
To apply for the grants, you'll need to:
Email your pitch deck to vfg@raise.sg
You'll be notified of a 1-on-1 consultation with raiSE within three weeks so they can learn more about your application.
You’ll get a notification whether your application has been shortlisted. This takes about 3 weeks after submission.
If your application is shortlisted, you’ll need to submit a detailed proposal together with financial projects for the final evaluation. You'll also undergo interviews and presentations in between.
Your application is evaluated on the following:
Compelling social objective
Team composition
Viable business proposition.
If you're approved, your company must be registered with raiSE and incorporated to receive the grant disbursement.
You can check out the full list of outcome areas on raiSE Singapore Website and apply for the grant through this link.
Business Improvement Fund (BIF)
BIF is meant for encouraging technology innovation and adoption for businesses within the tourism sector. It also incentivizes the redesigning of business models and processes to improve tourism companies' competitiveness and companies’ productivity and competitiveness. The evaluation of proposals is also based on these two factors.
The Singapore Tourism Board offers the Business Improvement Fund. Depending on your business' size, you can receive funding up to support up to 70% of qualifying costs covering training costs, travel costs, hardware and software, and even third-party project-related costs.
There are only two steps involved in the application process:
Before applying, you can send an executive summary of your proposed project to STB_Incentives@stb.gov.sg, and you'll be advised whether or not your proposal is eligible for the BIF.
If your project is eligible, you'll need to submit your application to the Business Grants Portal together with the project proposal and relevant quotations for the costs.
You'll find more information about the grant by visiting the Singapore Tourism Board website.
P-Max
P-Max is an initiative created by Workforce SG to match PMETs or Professionals, Managers, Executives, and Technicians looking for a job with hiring SMEs.
These PMETs are vetted and placed into positions that SMEs are currently hiring for with the P-Max Programme Managers' help.
These newly hired PMETs are required to attend a ⅔ day workshop, while supervisors from the SME are going to attend a 1-day workshop. From there, P-Max Programme Managers will conduct follow-ups with the SMEs and their PMETs within six months. This is to monitor job performance, and the practices taught at these workshops are practised.
If the company completes the 6-month follow-up and if the company retains the new hires, you become eligible for a one-off grant worth S$5,000.
You can find out more about the program by visiting the Workforce SG Website and clicking the "How to Apply" tab.
Singapore Grants for Startups
The government grants these grants and more to help them navigate the different business life cycle stages. The support can come from cash payouts, tax exemptions, rebates, and tax deduction.
Early Stage Venture Funding
Early Stage Venture Fund or ESVF is an initiative backed by the NRF or National Research Foundation to support innovation. This is the government's biggest equity scheme that co-funds startups, along with VC's or venture capital firms.
The National Research Foundation or NRF can invest up to S$10 million on a matching basis for VC funding. The VC's will then have the option of buying NRF's shares within five years.
Who's Eligible for This Grant?
Beneficiaries of startup funding are for startups in their early stages and operating in the technology sector.
You can read up more about the ESVF on NRF's website.
Capability Development Grant
Capability Development Grant or CDG provides financial assistance to startups for businesses looking to improve their capabilities in doing business, including consultancy, training, cost of hardware and software and other equipment, and certification costs. CDG covers up to 70% of product development expenses, new product design, and new manufacturing processes.
SPRING also provides support for startups who're eager to develop new products through the CDG.
Who's Eligible For This Grant?
Any SME or startup incorporated and currently operating in Singapore.
You can read up more about the grant by visiting the Capability Development Grant website.
Financial Sector Technology and Innovation (FSTI) Scheme
FSTI is initiated by the Monetary Authority of Singapore to incentivize innovation. The agency invested a whopping S$225 million into this scheme to enable financial institutions to establish innovation labs in Singapore and support industry-wide innovative solutions and infrastructure.
Through the FSTI-Proof of Concept, MAS will fund between 50% and 70% of qualifying costs. This is capped at S$200,000 and up to 18 months.
Who's Eligible For This Grant?
Financial institutions and technology/solutions providers working with financial institutions in Singapore are eligible to apply for the grant.
Read up more about the FSTI by visiting the Monetary Authority of Singapore website.
ComCare Enterprise Fund
ComCare Enterprise Fund or CEF is a new government grant for startups. This grant came from the Ministry of Social and Family Development to help fund social enterprise startups. CEF covers 80% of the capital expenditure and operating costs of up S$300,000 for the first two years. Once the two two years are up, it can seek funds for business expansion.
Who's Eligible For This Grant?
Social enterprise startups end up hiring and training Singapore residents.
You can read up more about this grant by visiting the Ministry of Social and Family Development website.
Closing
Singapore remains to be one of the best countries in the world for company registration. There's no doubt that the financial support they provide is impressive enough that it motivates other startups and companies from other countries to move to Singapore.
There are more grants available to startups and companies in Singapore, so be sure to find the one that's right for you.
Also read: Starting a Holding Company in Singapore for Asset Protection
Frequently Asked Questions
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Congratulations on securing a business grant! Maintaining accurate financial records is crucial for tracking the utilization of grant funds and ensuring compliance. To ensure your financial records are in top shape, consider seeking assistance from professionals. You can find an accountant in Singapore like Piloto Asia, who specialize in providing comprehensive accounting services tailored to the needs of businesses in Singapore.
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Understanding the difference between a holding company vs. operating company is vital when considering business grants in Singapore. A holding company is an entity that owns the outstanding stock of other companies (the operating companies). The operating company, on the other hand, is where business operations occur and revenue is generated.
Singapore's business grants typically go to operating companies rather than holding companies. This is because the grants are intended to support operations, innovation, and business growth directly. Therefore, when applying for a business grant in Singapore, it's crucial to apply as the operating company to meet the eligibility criteria and increase the chances of your application being successful.
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Singapore does not have a capital gains tax. This means that there is no tax on profits made from the sale of assets, such as stocks, bonds, and property. However, there are some exceptions to this rule. For example, capital gains made from the sale of residential property are subject to a 10% tax.
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Yes, you are required to file an ECI with ACRA if you receive a business grant in Singapore. The ECI scheme provides tax breaks to businesses that create new jobs in Singapore. To qualify for the ECI, you must be a Singapore-registered company that has received a business grant from a government agency. ECI filing in Singapore is a simple process that can be completed online.
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Understanding the difference between a holding company vs. operating company is vital when considering business grants in Singapore. A holding company is an entity that owns the outstanding stock of other companies (the operating companies). The operating company, on the other hand, is where business operations occur and revenue is generated.
Singapore's business grants typically go to operating companies rather than holding companies. This is because the grants are intended to support operations, innovation, and business growth directly. Therefore, when applying for a business grant in Singapore, it's crucial to apply as the operating company to meet the eligibility criteria and increase the chances of your application being successful.