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4 Benefits for Tech Startups That Incorporate in Singapore


4 Benefits for Tech Startups That Incorporate in Singapore

July 2022

The Lanturn Team

Singapore is the place to be for new startups. The small but prosperous island has a long track record of attracting businesses of all sizes, from established companies like IBM to startups like Grab. This should not come as a surprise given that the city state has remained one of the most business-friendly countries in the last decade.

Here are five benefits of incorporating your tech startup in Singapore

1. Robust government support

Under Enterprise Singapore, various grants are available to assist startups from all industries to flourish in the Merlion City. One grant that is designed specifically for tech is the Startup SG Tech. The grant is capped at S$250,000 for proof of concept (POC) and $500,000 for proof of value (POV). To be eligible, startups must fulfil the following criteria: 

* Registered for less than five years at the time of application.

* At least 30% local shareholdings.

* The company’s annual sales turnover is not more than S$100 million, and the employment size is not more than 200 workers.

* Core activities to be carried out in Singapore.

* Solutions they are developing must demonstrate how science/technology is applied, be of a breakthrough level of innovation that leads to or is built upon proprietary know-how/IP, and be commercially viable.

Other options include the SG Equity Programme and the Business Improvement Fund (BIF). BIF is designed for Singapore-registered companies operating in the tourism sector, a consistent contributor to Singapore’s overall GDP. Please visit Enterprise Singapore and Startup SG for more information on each available grant.

Aside from the available grants, Singapore’s tax system can be a huge pull factor for startups considering the ideal location. Startups will receive tax breaks, where the first S$100,000 income will be reduced by 75% from the normal tax rate. Meanwhile, the following S$100,000 income will be reduced by 50%, and the next income tier will be charged using the usual rate. Such an arrangement is valid for the first three fillings.

Check our webinar on why you should set your regional headquarter in Singapore.

2. Strong IP protection

As digitalisation and innovation become the norm for all businesses, including startups, having intellectual property (IP) rights plays a vital role in one’s ability to maintain a digital edge and gain a competitive advantage over competitors. Therefore, having a solid law on this is a must so that Singaporean startups can thrive, innovate and compete with one another safely and healthily一ultimately enabling Singapore to keep its place as the premier tech hub in the region.

In 2019, Singapore was ranked first in Asia and second globally regarding IP protection. As a result, you do not have to be overly concerned about your ideas or other intangible assets being stolen. There are five initiatives that you should take note of:

* SG IP Fast Track Programme: A pilot scheme introduced during the pandemic to speed up grants of patent applications across technology fields within six months. This program has been extended to April 2024.

* IPOS Go: The world’s first app for trademark applications that was released in 2019.

* Patent Prosecution Highway: A programme that allows patented properties in Singapore to bypass a similar inspection in participating foreign countries, such as Mexico and China.

* ASEAN Patent Examination Co-operation: An agreement between nine participating offices in Southeast Asia, including Indonesia, Malaysia, and Singapore, to expedite the patent application process by sharing search and examination results.

* Re-Registration of SG Patents in Cambodia and Laos: A cooperation with Cambodia and Laos to support companies seeking to re-register their granted Singapore patents in the two countries.

Please refer to the Intellectual Property Office of Singapore (IPOS) site for more information.

3. Diverse talent pool

Singapore consistently ranks high in Bloomberg’s Innovation Index. One of the criteria is tertiary education enrollment, particularly in the Science, Technology, Engineering, and Mathematics field (STEM), and Singapore is ranked first in the 2021 survey. This means local talents have the qualifications to help companies stay ahead and embrace the ever-changing tech landscape.

But the war for talent in the tech sector is fierce, and the population of local talent does not grow hand-in-hand with the number of tech startups that call Singapore home. That is one of the reasons why the Tech.Pass was introduced in January 2021. 

With this pass, skilled IT talents can come to Singapore without securing employment beforehand. There will be only 500 passes issued each year, so the Singapore Economic Development Board (EDB) is highly selective. Each applicant must fulfil the following criteria:

* Have a last drawn fixed monthly salary (in the last 1 year) of at least S$20,000.

* Have at least five cumulative years of experience in a leading role in a tech company with a valuation/market cap of at least US$500mil or at least US$30mil funding raised.

* Have at least five cumulative years of experience in a leading role in the development of a tech product that has at least 100,000 monthly active users or at least US$100mil annual revenue.

Once a Tech.Pass is granted, the applicant may work for any Singaporean-based tech company or start and operate a new one.

Read our comprehensive guide on the Singapore Tech.Pass.

The tried and true route of obtaining an employment pass is also an option, especially with the Tech@SG Programme. The programme is designed to help fast-growing companies access the critical talent they need to grow and scale their business in Singapore by providing a company-level endorsement to the Ministry of Manpower (MOM). Doing so reduces the risks of rejections for their employment pass applications to MOM.

4. Easy to incorporate

Incorporating a company takes approximately only 15 minutes as it is done entirely online via the Bizfile+ portal. The application is also processed quickly as it can be approved within a day.

Check our guide on incorporating your company in Singapore.

Singapore continues to be an ideal place to incorporate your startup because of the four reasons explained above. As one of the leading technology firms that provides end-to-end financial services and solutions for businesses, Lanturn has a proven track record in fulfilling every client's needs. This includes the need to incorporate your business in Singapore. Our certified and experienced team is ready to advise you every step of the way. 

Want to incorporate your business hassle-free? Contact us now!

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