Singapore Business Startup Schemes and Grants
As the gateway to Asia’s vibrant technology and financial scene, Singapore is the home to a young and diverse microbusiness community. A whole slew of startups are springing up Singapore, the sovereign city-state in Southeast Asia. In fact, startups are mushrooming in this Lion City and it is the benchmark of its sound microbusiness ecosystem.
Why Entrepreneurs Favour Singapore?
The political and macroeconomic stability are the strong factors behind the flourishing scene of Singapore’s microbusiness ecosystem. In addition to these, the parliamentary democracy, strong judicial system, robust regulatory institutions, as well as the corruption-free bureaucracy, have backed the vibrant business environment in Singapore. Several other contributing factors included the state-of-art infrastructure, the world-class port and transportation network, the ultra-high-speed broadband infrastructure connecting people and workplaces, various government financing schemes and cash grants, as well as tax incentives, have played the important roles to boost the vibrant microbusiness environment. On top of that, the recent launch of the Startup SG in March 2017 in Singapore has enhanced the innovative business environment to attract global startup talent.
Startup SG in Singapore
Startup SG in a SRPING Singapore-led umbrella branding that unifies all the support schemes for startups in Singapore. The umbrella initiative is a supporting platform for entrepreneurs to access local support initiatives and connect to the global entrepreneurial network to start business in Singapore.
The six pillars of support are:
- Startup SG Founder,
- Startup SG Tech,
- Startup SG Equity,
- Startup SG Accelerator,
- Startup SG Loan, and
- Startup SG Talent.
Startup SG Founder
Aimed to provide support in terms of mentorship and startup capital grant to innovative first-time entrepreneurs, the scheme provides up to $30,000 by matching $3 to every $1 raised by the entrepreneur. Startup SG Founder can only be applied through an Accredited Mentor Partner (AMP).
The AMP will identify and select applicants based on:
- the uniqueness of business concept,
- feasibility of business model,
- strength of management team, and
- potential market value.
The qualified startup will be guide by the AMP where they will on appropriate milestones together. Their proposed application and milestones will be submitted to SPRING for approval. Upon successful application, the grant will be disbursed in two tranches based on agreed project milestones over 12 months.
Startup SG Tech
This grant provides project funding for companies that develop proprietary technology. Through Startup SG Tech, startups will receive funding for both Proof-of-Concept (POC) and Proof-of-Viability (POV) projects.
POC projects can receive funding of up to S$250,000 while POV projects (projects designed to test the commercial viability of a lab-proven technology) are eligible to receive up to S$500,000 in funding.
- The company must be a registered Singapore company less than 5 years old
- The company must operate in Singapore
- The company must have at least 30% local shareholding
- Annual revenue must be less than S$100 million or the company must employ fewer than 200 people
Startup SG Equity Scheme
Startup SG Equity scheme is the investment arm of SPRING Singapore that aims to stimulate private-sector investments into innovative, Singapore-based technology startups. Startups engaged in innovative technology development can tap on this financing scheme to commercialise their ideas.
- The company incorporated must be a private limited company incorporated in Singapore with a paid-up capital of at least S$50,000.
- The company must not be a subsidiary or a joint venture.
- The company must not be incorporated for more than five years.
- The company’s core activities must be carried out in Singapore.
- The company must demonstrate that its products/services/applications are highly innovative and have substantial intellectual content.
- The company must have high growth prospects and international scalability.
- The company must have identified a third party investor(s) ready to invest in it.
Startup SG Accelerator
Startup SG Accelerator is a scheme that supports incubators and accelerators in strategic growth sectors, catalyses the growth of high potential startups through the mentorship and networks of selected partners. The accelerators and incubators are the only targeted audience where venture capital firms and consultancies are not be eligible for the scheme.
The sectoral focus of listed accelerators and incubators in the Startup SG Accelerator scheme are:
- Internet of Things (IoT),
- Artificial Intelligence (AI),
- Data Analytics,
- Smart Logistics and,
Startup SG Talent
The Startup SG pillar highlights initiatives to create a better environment for global talents to join local startups and set up innovative businesses in Singapore. EntrePass, Technology for Enterprise Capability Upgrading (T-UP) and SME Talent Programme (STP) for Startups are the schemes under this initiative.
Entrepass scheme under Startup SG Talent to attract ambitious entrepreneurs to start businesses in Singapore. It has been enhanced to aid the entry and stay of global entrepreneurial talent.
This initiative helps to enhance businesses build in-house R&D capabilities by accessing the pool of talent from A*STAR’s Research Institutes. It subsidises up to 70 percent of the secondment costs of research scientists and engineers for a period of up to 2 years.
- SME Talent Programme (STP)
This programme is run by Action Community for Entrepreneurship (ACE) and it offers 70 percent subsidy in stipends paid to interns, and in turn, facilitates startups to build their human resource capital development capabilities.
Startup SG Loan
Startup SG Loan highlights government-supported loans for startups’ working capital, equipment or factory financing and trade financing needs, and it is offered via Participating Financial Institutions.
Startup SG Investor Pillar
This initiative provides startups with the much-needed working capital, equipment or factory financing as well as the trade financing. The major categories include:
- SME Micro Loans
A maximum of S$100,000 working capital financing is offered for companies with 10 or less employees
- SME Venture Loan
High-growth companies can apply this loan for the purpose of business expansion where a loan amount as high as S$5,000,000 is available for eligible companies.
- SME Equipment and Factory Loans
Companies can secure the loan up to S$15 million to purchase equipment, machines or selected factory properties
On a final note, Singapore is one of the best destinations for startups with its entire infrastructure, tax incentives, cash grants, as well as financing schemes. In fact, all these initiatives and government-backed financing schemes have played a part to propel the country to stay ahead in the competitive global market.