How to Leverage Government Support and Grants for Foreign Entrepreneurs
Starting a business in Singapore as a foreigner is as easy as it is for local business owners. You need to be over 18 years of age which is the minimum legal for starting a business in Singapore.
If you are new to the Singapore market and are wondering, “How can a foreigner start a business in Singapore?” rest assured. You can solve the problem by hiring an experienced Registered Filing Agent. Agents act as a liaison between you and the government agencies like ACRA, MoM, and IRAS and help you execute your compliance.
Your main difficulty is financing your new business when it requires the most. However, if you have a robust and path-breaking business idea, financing is not a significant cause of worry. Singapore authorities understand the problem and have grants and schemes you can use for your business.
These schemes and grants provide financial assistance in various forms: cash payouts to tax benefits, exemptions, rebates, or deductions. It helps you lower your initial cost of starting a business in Singapore as a foreigner.
Starting a Business in Singapore as a Foreigner
You should take your incorporation Agent’s help to fill out and submit the grant application and required data if needed. Ask them about it when starting a business in Singapore as a foreigner. They will help you handle every aspect of your application for funding.
You must use your CorpPass to submit and track grant applications for your SME on the Business Grants Portal.
The most well-known scheme you may have heard of is the Tax Exemption Scheme for Startups. Your private limited company can qualify for the scheme if it has a maximum of 1-20 individual shareholders. You can claim:
- 75% tax exemption on its first $100,000 of normal chargeable income; and
- 50% tax exemption on its next $100,000 of normal chargeable income
How Do You Submit an Application for a Grant?
Your being a foreigner or local business owner doesn’t matter when it comes to getting these benefits. Because your company gets them and not you.
Studies show that more than 45% of new businesses perish in their first year because of the lack of adequate funding. Qualifying for these schemes will help you finance your dream and give your business a fighting chance to take root.
Before applying to any of the Singapore grants and schemes, understand the qualifying criteria. It is essential for planning your route to get them. You must also target grants and schemes that align with your corporate goals and objectives.
In most cases, you will find that you not only need to open a company in Singapore, but you also must ensure the physical presence of its management in Singapore. It means your company needs to be a tax-resident entity of Singapore.
With the online application, you may need to submit documents giving detailed financial data about your business’s current state and business plans to the decision-makers. In some cases, your physical presence may be required. You will need to present your project to an evaluation committee.
Grants & Schemes for Startups by Singapore Government
If you are searching for finance for your new business, you should know about Startup SG. It is a Singapore government agency that supervises all funding, grants, schemes, loans, and capability enhancement. It gives you a chance to connect to a global network of entrepreneurs.
Let us learn about key Singapore government schemes:
1. Startup SG Founder
Under this scheme, as a founder, you can expect capital grants and mentorship if you are a first-time entrepreneur implementing an innovative idea. Standards, Productivity, and Innovation Board (SPRING), an agency, provides you with 75% of the capital. You need to come up with 25% only.
Submit your application to one of the Accredited Mentor Partners. They will evaluate it and will notify you within five working days. The money will be disbursed after your business achieves certain milestones.
2. Enterprise Development Grant (EDG)
EDG focus on establishing a system to help your startup grow. It helps you take root in the local market and expand your activities abroad.
EDG subsidises the cost of tapping foreign markets. You can ask for it. It focuses on increasing efficiency and optimising the usage of resources. It provides a 30%-70% subsidy to SMEs on the cost of equipment and software.
3. Startup SG Tech
If you are operating a startup in the tech industry, you can benefit from Startup SG Tech. You can expect early-stage funding. However, the approval depends on how developed your concept or technology is.
The grant is for the development and commercialisation of the proprietary technology. Depending on your business needs, you can opt for either a Proof-of-Concept (capped at $250,000) or a Proof-of-Value (capped at $500,000) grant.
4. Startup SG Equity Programme
The Startup SG Equity Programme is for Singapore-based startups. If it is potential enough, the Singapore government will provide you with the capital and become your co-investor.
The scheme is launched to encourage investment in startups having Intellectual property and the capability to penetrate foreign markets. Investment terms change based on case to case.
5. VentureForGood (VFG)
If you are planning or running a Singapore social enterprise, you can apply for a VentureForFood grant for assistance. You can get up to $300,000 to finance various stages of your business.
6. Market Readiness Assistance (MRA) Grant
Market Readiness Assistance Grant assists Singapore SMEs in expanding to the foreign market. On approval, the grant may cover 70% of your eligible costs.
You can get this grant for three years, which is capped at $100,000/market. And you can spend the grant money only on permitted activity. These can be one of:
- Overseas market promotion (capped at $20,000)
- Overseas business development (capped at $50,000)
- Overseas market set-up (capped at $30,000)
7. Business Improvement Fund (BIF)
BIF grant funds a Singapore startup to develop new technologies and remodel the business flow. The grant is aimed at improving the competitiveness and productivity of the industry.
Your SME can qualify for a defrayal of up to 70% of costs. Other companies can expect a defrayal of up to 50% of the cost.
8. Productivity and Solutions Grant (PSG)
PSG assists Singaporean companies in increasing productivity, finding new solutions, and enhancing competitiveness. PSG can cover up to 70% of your automation, training, and research & development cost.
Starting a business in Singapore as a foreigner is beneficial. In addition to the business grants, you can benefit from the low corporate tax rates, strict intellectual property laws, and a qualified and skilled workforce.
Singapore provides highly reliable communications networks, internet services, and air and sea connectivity to the outside world. It also places emerging markets in Asia within 8-10 hours of air flights. It is a quiet and secure place to live. To open company in Singapore and get business grant assistance, call us at +65-6536 0036 or email us at firstname.lastname@example.org for expert assistance.