Available Government Funding and Assistance Schemes for Singapore Businesses

The Singapore government plays a major role in helping start-up businesses off the ground through funding and its numerous support schemes. The versatile range of initiatives rolled out by the government in recent years has helped put Singapore on the map as one of the world’s most start-up friendly nations. Many of these initiatives are specifically geared towards helping start-ups gain access to funding in the form of cash grants, business incubator schemes, debt financing schemes, government backed equity financing schemes and tax incentive.

In addition to the initiatives designed specifically to help start-ups gain access to funding, the Singapore government has worked for many decades to create an optimal business environment with world class infrastructure, a low tax system, a minimum of bureaucracy and strong legislation protecting intellectual property as well as an educated and readily available workforce.

Ottavia’s guide is designed to provide an overview on the various government initiatives designed to support Singapore start-ups and help them turn their innovations into a business reality.

Equity financing schemes

This is capital which is lent by an investor in exchange for a share of ownership in the company. This form of financing is ideal for start-ups in the early stages of development who are in need of additional capital to get their ideas off the ground. The Singapore government has initiative a number of co-investment equity financing schemes in addition to these private sources of equity capital. This is where the government co-invests in a start-up with a third party investor. Some of the more popular government backed schemes of this type include:

SPRING Start-up Enterprise Development Scheme (SPRING SEEDS): This is where SPRING SEEDS, a subsidiary of the government agency SPRING, co-invests in commercially viable start-ups based in Singapore, matching dollar for dollar with third party investors up to S$2 million. Both SPRING SEEDS and the third party investors take equity stakes in the company proportionate to their investments. There are certains conditions to be met to be eligible for this scheme

Business Angels Scheme (BAS): This scheme also involves SPRING SEEDS Capital but this time co-investing with pre-approved business ‘angels’ in growth oriented Singapore based start-ups which have been identified as innovative. SPRING SEEDS Capital will match the business angels dollar for dollar up to S$2 million. Proportionate shares will be taken in the company by both parties in exchange for their investments.

Early-Stage Venture Funding Scheme (EVFS): Administered by the National Research Foundation (NRF) the EVFS is a co-funding scheme for venture capital firms looking to invest in early stage technology start-ups. Under the scheme, selected venture capital firms who raise at least S$10 million from third party investors will receive dollar for dollar matching up to S$10million. Some technology start-ups are able to approach the venture capital firms in order to seek up to S$3million in funding.

Cash grants

Various government agencies are able to dispense business grants to initiate start-ups in a range of sectors. All of these business grants have a unique terms and conditions, qualifying criteria, and disbursement method. These grants will typically only cover a proportion of the finances required to get a start-up up and running and so the owners will have to pitch in the remaining capital or find third party investors. The purpose of these grants is to encourage investment in research, development, innovation, and social causes within Singapore’s major industries. It’s important for business owners to carefully review the terms and conditions before applying to the relevant agency. Some of the most popular grants available include:

ACE Start-ups Scheme: Under this scheme the Action Community for Entrepreneurship (ACE) matches S$7 to every S$3 raised by an entrepreneur up to the value of S$50,000 (so an entrepreneur would have to raise S$21,429 to receive grant of S$50,000). No Equity is taken in exchange for this grant. The grant will be disbursed over 2 – 3 tranches when you hit pre-determined milestones.

Technology Enterprise Commercialisation Scheme (TECS): Jointly administered by SPRING Singapore and the Infocomm Development Authority, TECS is designed to spur the formation of technology start-ups by providing early stage funding which goes towards the commercialisation of proprietary technology ideas. TECS offer the following grants:

  • Up to 100% of qualifying costs (up to S$250,000) for applicants who wish to develop proprietary ideas which are at the conceptualisation stage.
  • Up to 85% of qualifying costs (capped at S$500,000) for applicants who are looking to conduct further research and development on a technology project. This can include the building of a prototype. To receive this grant, the applicant must demonstrate consumer or third party investor interest.

iStart:ACE Scheme: The Accelerate & Catalyse Entrepreneurship (iStart:ACE) is administered by IDA and is designed to catalyse start-up technology commercialisation as well as go to market activities through leveraging internationally proven technologies. IDA offers grants which cover up the 50% of salaries for five technical staff for a year (capped at S$200,000)

iSprint: Increase SME Productivity with Infocomm Adoption & Transformation (iSprint) is another grant by the IDA covers improvements to start-ups with a range packaged solutions for aspects of the business such as accounting and payroll through to more complex considerations such as customer relationship or supply chain management. To qualify for these packages, the start-up needs to prove that the package would be used for the development of first time automation of business functions. It also needs to be carried out in Singapore and cannot be started until the grant is approved. This grant is open to locally registered and incorporated SMEs.

ComCare Enterprise Fund (CEF): Administered by the Ministry of Social and Family Development (MSF), this grand provides seed funding for social enterprise start-ups within the social services sector which train and employ disadvantages Singaporeans. The grant provides up to 80% of the capital expenditure as well as the first two years’ worth of operating costs (capped at S$300,000).

New Initiative Grant (NIG): This is administered by the National Volunteer and Philanthropy Centre (NVPC) and is designed to provide seed money to SG start-ups with a strong focus on volunteerism and philanthropy who are developing new initiatives which meet the needs of the community. This grant can cover up to 80% of the costs required to further the initiative for one year (capped at S$200,000).

Business Incubation Schemes

These schemes are ideal for start-ups who wish to receive coaching and guidance about growing their venture as well as funding. Incubators are generally a physical space which a new business can operate out of and include expert business guidance, financial assistance, and cost effective shared services. Incubators are ideal during the early stage development phase where businesses need a great deal of support, guidance, and access to industry expertise. Some of the current incubators available to start-ups in Singapore include:

i.jam Micro Funding Scheme: This is a combined IDM (interactive Digital Media) and Jump-start and Mentor (i.JAM) scheme which is administered by the Interactive Digital Media Programme Office (an inter-agency of the Media Development Authority). This scheme appoints incubators that identify, nurture and administer technically competent start-ups. Principally, selected start-ups will be advised on the originality of ideas and possibly aggregated with start-ups who share similar ideas. The incubator also provides the opportunity for networking and funding guidance. Incubators may invest between 10 and 25% of the qualifying project costs and start-ups will receive an additional grant (capped at S$50,000 for their project’s qualifying costs. The incubators take an equity stake in exchange for their investment which is distributed on a reimbursement basis.

NRF Technology Incubation Scheme: These are fifteen incubators designed to nurture high-tech start-ups in Singapore through mentorship and funding. The National Research Foundation will co-fund up to 85% of each start-up in the incubator (capped at S$500,000). The incubator will be required to invest the remaining amount (minimum 15%). Both NRF and the incubator will take proportionate equity stakes in accordance with their investment.

Incubator Development Program: Administered by SPRING Singapore, this program can provide up to 70% grant support to both incubators and venture accelerators dedicated to nurturing start-ups. The grant can include the cost of hiring mentors and incubator managers, expenses incurred to market services or events, staff training costs, shared services or equipment for the start-ups.

Incubator for Disruptive Enterprises and Start-ups (IDEAS) Fund: This incubator fund was launched by venture capital firm Innosight Ventures Pte. Ltd. and the National Research Foundation and is designed to provide guidance and financial support start-ups with disruptive innovation potential. Once identified, these start-ups will be incorporated into the incubator and provided with funding between S$500,000 and S$600,000. The NRF supports the incubator through 85% co-funding.

Fast-Track Environmental and Water Technologies Incubator Scheme (Fast-Tech): This incubator is designed to support start-ups in the environmental and water technology sector. Administered by the Economic Development Board, start-ups in this sector are eligible to receive either S$500,000 or 85% support level (whichever is lower) for a maximum of three years. The start-ups will be set up in water-technology incubators where they will receive both mentorship and guidance to refine their ideas. The designated incubator will have an equity stake in the company and the grant will be dispensed on a reimbursement basis.

Debt Financing Schemes

This option is ideal for entrepreneurs who want to raise capital without having to give up a share of their profits. Under these schemes capital is provided and the borrowers are in debt to their lenders and must make scheduled loan repayments regardless of whether or not the start-up is generating funds or not. Common examples of these loan structures include so called ‘friendship loans’ from family and friends or private debt financing schemes. The government has created a number of debt financing schemes for SME’s in Singapore. Some of these schemes include:

Micro Loan Program: Eligible Singapore companies can receive loans of up to S$100,000 for daily operations or for automating and upgrading equipment. This money is loaned by banks and financial institutions in Singapore and the SME’s pay a minimum 5.5% interest rate for a loan tenure of less than 4 years.

Loan Insurance Scheme (LIS): This is designed to insure loans against default risks and involves the government co-sharing the premium with the start-up. This scheme is to support both domestic and overseas trade facilities and has no maximum loan quantum. As with conventional loans, the premium and interest rates as well as the loan tenure are determined by the insurer based on the borrower’s risk profile. Premium support is provided by the government with repayment structures and collateral requirements determined by the financial institutions participating.

Local Enterprise Finance Scheme (LEFS): Banks and financial institutions lend eligible start-ups up to S$15 million to automating or upgrading factory and equipment as well as construction equipment and heavy vehicles or for purchasing business/production premises. A minimum 4.25% interest rate is required for loans of less than 4 years tenure which rises to 4.75% for loan tenures which extend past this timeframe.

Tax Incentive Schemes

The government has introduced a number of tax initiatives which are designed to assist start-ups. Tax breaks are designed as an incentive to start new businesses and in turn stimulate the economy and create new employment opportunities. Some of the tax schemes designed to assist start-ups and SMEs in Singapore include:

Tax exemption for start-ups: Eligible start-ups can receive a full tax exemption on a certain amount of taxable income during the crucial first three years of operation. Newly incorporated companies which have been incorporated in the city, are a tax resident, and have no more than 20 shareholders (one of which is an individual holding a minimum 10% of shares) are eligible for the following tax exemptions:

  • A corporate tax rate of 0% during the first three years of operation on the first S$100,000 of taxable income and a partial exemption rate of 8.5% on the next S$200,000 of taxable income. Taxable income exceeding S$300,000 will be taxed at the headline rate of 17%.
  • An 8.5% tax rate on taxable income of up to S$300,000 per annum from the fourth year onwards. Any taxable income earned above this will be charged at the headline rate.

Development and Expansion Incentive (DEI): This is designed to encourage companies to engage in high value addition business activities, expand local operations, and procure advanced equipment or machinery. A reduced tax rate of is provided on the incremental income derived from these activities.

Investment Allowance: A capital allowance for approved projects on fixed capital expenditure incurred for productive equipment which is placed overseas. Companies can also claim capital allowance on plant and equipment using in connection with their operations under certain conditions.

Pioneer Incentive Scheme: A full corporate tax exemption for up to 15 years for companies in the manufacturing and services sectors which raise overall industry standards through their activities.

Productivity and Innovation Credit (PIC) Scheme: This is a tax benefit scheme designed to encourage innovation and productive activities. Eligible businesses can claim a 400% deduction on allowances up to S$400,000 incurred in:

  • Research and development
  • Intellectual Property registration
  • Design activities
  • Intellectual Property acquisition
  • Automation through technology or software
  • Training of employees

Businesses are allowed to combine the S$400,000 cap per year for YA 2013 to YA 2015 equalling a new cap of S$1,200,000 for the three years. Businesses who have a low taxable income, Up to S$100,000 of expenditure can be converted into a non-taxable cash pay-out with a 60% conversion rate.

Industry-specific tax incentives: there are a number of industry specific tax incentives which benefit SMEs and start-ups in Singapore.


Singapore is the premier international destination to do business and is consistently ranked as such by The World Bank. It is also recognised to be Asia’s most entrepreneurial economy and the ideal commercial environment in which to nurture a start-up. This reputation is in no small part due to the herculean efforts of the Singapore government and the myriad of initiatives and schemes designed to encourage new business innovations. As a result of these efforts, Singapore has witnessed a veritable start-up boom in the 21st century with start-up numbers in the city (where a start-up is defined as a company under 5 years old) growing from 27,000 in 2002 to more than 36,000 in 2009. These start-ups have had an enormous effect on the Singapore economy by creating more than 300,000 jobs and netting over S$166 billion in turnover.

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