In the annual budget statement for 2015, the Singapore government has pledged stronger support to small- and medium-sized enterprises (SMEs) that innovate and push the boundaries.
This was said by Tharman Shanmugaratnam, Singapore's Deputy Prime Minister and Minister of Finance, on Monday in Parliament while delivering the Budget speech.
"Every form of innovation counts, and must be supported - whether it is a new process or brand, developing online marketing or leveraging on big data," Tharman said. "We will also strengthen support for our SMEs to venture abroad."
The finance minister said that companies focusing on innovation, research and development (R&D) and internationalisation will be receiving enhanced support through various government grants and schemes.
Also, processes for accessing the Capability Development Grants (CDG) by SPRING Singapore, which financially assists SMEs in developing capabilities in innovation, will be made easier to apply for projects under S$30,000.
The funding support of up to 70 per cent of costs will also be extended till March 31 2018, Tharman said.
Similarly, the National Research Fund, which invests in research and development (R&D) to enhance the Singapore economy, will receive a top-up of S$1 billion this year, said Tharman.
Other measures announced for promoting innovation and internationalization include the following:
- Companies invested in R&D will also be supported through the Research, Innovation and Enterprise five-year plan. Further details will be provided in the later part of this year.
- There is good news for start-ups too. They will also have easier access to capital for their growth. For example, the Government will increase the co-investment cap for two schemes by SPRING - the Startup Enterprise Development Scheme (SEEDS) and Business Angel Scheme (BAS) - to S$2 million per company. This will allow companies to receive up to S$4 million each in total funding. This is applicable in the case of companies that are less than five years old.
- The Government will also start a pilot programme for venture debt risk-sharing. In this scheme, SPRING will provide 50 per cent risk-sharing with selected financial institutions over an initial period of two years to high-growth companies. More details are awaited.
- The support for SMEs under IE Singapore's grant schemes will be increased from the current 50 per cent to 70 per cent for three years.
- The Double Tax Deduction for Internationalisation Scheme to cover salaries for Singaporeans posted overseas will also be enhanced.
- Larger Singapore companies will also benefit from a new tax incentive. Under the International Growth Scheme, they will get a 10 per cent concessionary tax rate on incremental income from qualifying activities.
- Companies which want to grow through mergers and acquisitions (M&A) will enjoy tax allowance for acquisition costs from the current 5 per cent to 25 per cent of the value of the acquisition. The M&A scheme will be extended till March 31, 2020.
- The IE Singapore's Internationalisation Finance Scheme to support M&A will also be extended. The maximum loan quantum has been doubled since last year's Budget from S$15 million to S$30 million.
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