To Encourage Business Incorporation in Singapore, Government Introduces Various Tax Incentives
Singapore government is leaving no stone unturned to support the newly incorporated Singapore-based companies. The simplified process of Singapore company registration that investors have to follow is a testimony to the intentions and attitude of Singapore government. By providing various types of incentives, schemes and reliefs, the government is trying to help the companies become more operationally effective, knowledge-intensive and development driven. At the same this, it is helping Singapore to stay strong amidst cutthroat competition from other countries. This strategy also proves helpful to lessen the unemployment rate of the city-state.
Given below is a quick recap of the types of benefits a Singaporean company can avail of
- PIC (Productivity and Innovation Credit) Scheme and Bonus – Under this scheme, companies can get tax deductions of up to 400%, or cash payouts pegged at 60% of the costs incurred while investing in the efficiency increasing and potential building activities. All type of staff trainings, installing new IT infrastructure, automation equipments, research, and development activities fall under the umbrella of activities that can be claimed under the PIC scheme. On the other hand, PIC bonus offers the companies an additional refund, as a compensation for the costs in any PIC activity. The bonus capped at S$5,000 per year of assessment (YA) is given. Many a time it happens that the companies get their tax bill reduced significantly, or even get paid for the complete bill amount through these schemes.
- CIT (Corporate Income Tax) Rebate – Pegged at a rate of 30%, the CIT rebate is made available for the all the start-ups in the island of Singapore. It usually spans for 3 years from the time of incorporation. Under this scheme, the companies can avail to trim their tax bill up to 30% or up to S$30,000 per YA. The companies do not have to file their rebate amount while filing their annual income tax returns. IRAS, the local tax authority, does this process automatically and the amount is refunded to the companies.
- ICV (Innovation and Capability Voucher) – This scheme helps the SMEs to enhance their efficiency in four domains; namely human resources, productivity, financial management and innovation. This scheme works unlike the PIC scheme in which cash payouts are given. In this, the eligible companies get up to two vouchers worth S$5,000 each upfront. These vouchers can be used to increase the efficiency levels of any of the four domains given above.
- iSPRINT Scheme – This scheme was introduced with the intention of encouraging the use of information technology in the business operations. Under this scheme, an SME can claim up to 70% of the cost of a packaged solution (capped at S$2,000 per item) or a more customized solution (capped at S$20,000). After the iSPRINT application is approved, SMEs can claim for a cash payout option under the PIC Cash Scheme.
Visit any other country; you will not get a single jurisdiction that offers such profitable incentives for incorporating a business in Singapore. This move is made available to help the start-ups move up the value chain. In this regards, it is expected that number of people aspiring to come into the enchanting city-state, to form a Singapore company, will keep increasing. It can be now be said with certainty that the American dream is long gone, Singapore is the place to be, the place to realize the dream of becoming an entrepreneur.