Eligible Small and Medium Enterprises (SMEs) in Singapore are the backbone of the economy, and government grants for SMEs provide much-needed support. But what counts as a small and medium enterprise in Singapore? SMEs have less than 200 employees or fewer than S$200 million in annual revenue.
While Singapore is renowned for being the Asia-Pacific (APAC) hub of multinational corporates, the truth is that small-medium enterprises contribute to 44% of total enterprise value-add and account for 72% of total employment, according to data from the Department of Statistics.
As one of the leading corporate secretaries in Singapore, Lanturn has seen a fair share of small and medium enterprises in Singapore that need support. Starting from January 2021, we have compiled an updated list of the top Singapore government grants for SMEs, along with valuable services and products, that SMEs in Singapore can take advantage of right now.
2023 Singapore SME Grants
Enterprise Development Grant
The Enterprise Development Grant (EDG) is designed to help SMEs build their internal capabilities across three key areas:
- Core capabilities – This includes business strategy and strategic brand management
- Innovation and productivity – This covers product development and process redesign
- Market access – Includes pilot projects and mergers and acquisitions
This SME grant was briefly raised to 90% by the government due to the COVID-19 pandemic in order to defray the cost of qualified projects. As of 2023, eligible SMEs can receive a grant of up to 50% on qualifying costs and no ending date at the moment for this SME grant.
In order to qualify for this:
- SMEs must be registered in Singapore;
- have at least 30% local shareholding;
- and be financially capable of running the project.
Enterprise Sustainability Programme
The ESP is a program launched by Enterprise Singapore to support SMEs in their efforts towards sustainability. Key factors to note about this initiative are:
- Like the previous SME grant’s (EDG) qualifications, a business entity must be registered and operating in Singapore and must have a minimum of 30% local shareholding.
- Unlike the EDG, the level of support for the ESP is at 70% of qualifying costs and will be in effect until March 31, 2026.
Business Improvement Fund
The BIF is managed by the Singapore Tourism Board and aims to enhance technological innovation and implementation, as well as improve business structures and processes in the tourism sector for better productivity and competition. It is aligned with the EDG (SME Grant) under the pillars of Innovation and Productivity and Core Capabilities.
Productivity Solutions Grant (PSG)
The Productivity Solutions Grant (PSG) assists SMEs looking to digitalise their processes and adopt IT solutions, such as:
- Digital collaboration tools
- Virtual meeting and telephony solutions
- Queue management systems
- Temperature screening solutions
For a limited period, the support level was enhanced up to 80% to encourage the economy’s transformation and help businesses emerge stronger from the Covid-19 pandemic. As of 2023, this SME grant offers up to 50% of eligible costs for local SMEs.
To be eligible for the PSG, the following conditions must be met:
- A business must be registered and operating in Singapore, with at least 30% local equity held by Singaporean(s) and/or Singapore PR(s).
- Have a group annual sales turnover not exceeding S$100 million or a group employment size not exceeding 200 employees.
- The IT solutions or equipment must be used in Singapore.
This Singapore SME grant is not available for charities, Institutions of Public Characters (IPCs), religious entities, Voluntary Welfare Organisations (VWOs), government agencies and subsidiaries, and societies.
Energy Efficiency Grant
The Energy Efficiency Grant (EEG) was launched in September 2022 to help businesses in the Food Services, Food Manufacturing, or Retail sectors cope with rising energy costs. The grant offers co-funding for investments in energy-efficient equipment, making businesses more sustainable and cost-effective.
This Singapore government grant for SMEs offers financial aid to purchase energy-efficient equipment that falls under specific categories, such as:
- LED lighting;
- Air-conditioners;
- Cooking hobs;
- Refrigerators;
- Water heaters;
- And clothes dryers.
Additionally, the equipment must be pre-approved to qualify for this particular SME grant. The EEG will accept grant applications from September 1st, 2022 until March 31st, 2024. Eligible SMEs can receive financial assistance of up to 70% of qualifying expenses, with a maximum cap of S$30,000 per year under the SME grant program.
To be eligible for this SME grant, the following criteria must be met:
- Be registered and operating in Singapore within the Food Services, Food Manufacturing, or Retail sectors.
- Have at least 30% local shareholding.
- Have a group annual sales turnover not exceeding S$100 million or a group employment size not exceeding 200 employees.
- And use the energy-efficient equipment purchased in Singapore.
Start Digital Pack
Launched in 2019, the Start Digital Pack allows newly-founded SMEs to leverage two digital solutions, with costs waived, in five key areas:
- Accounting
- Human resource management
- Digital marketing
- Digital payments
- Cybersecurity
The eligibility criteria for this SME grant are as follows:
- Must be registered and incorporated in Singapore.
- Having at least 30% local shareholding.
- Annual revenue of less than $100 million or fewer than 200 employees.
- Not having taken up Start Digital solutions before, and not having used identical solutions before.
Market Readiness Assistance
The Market Readiness Assistance (MRA) grant helps small and medium-sized companies expand into new overseas markets by covering eligible costs for overseas market promotion, business development, and setup.
This Singapore government grant for SMEs has the following key characteristics:
- Only one eligible activity in a single foreign market is allowed per application.
- The grant provides up to 50% of eligible costs for supported activities, capped at S$100,000 per company per new market, which include:
- For overseas marketing promotion (S$20,000 cap per new market)
- For overseas business development (S$50,000 cap per new market)
- For overseas marketing set-up (S$30,000 cap per new market)
To qualify for this SME grant, the following eligibility criteria must be met:
- The business entity must be registered and operating in Singapore.
- The company should have at least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership.
- The company should be new to the target overseas market. Note that the company’s annual sales in the target market must not have exceeded S$100,000 in any of the preceding three years.
- The company should have a Group Annual Sales Turnover not exceeding S$100 million or a Group employment size not exceeding 200 employees.
Government Support to Businesses
Career Conversion Programme (CCP) for SME Executives
Workforce Singapore will be introducing a new programme called Career Conversion Programme (CCP) for SME Executives. This is in response to the discontinuation of the P-Max programme. The CCP aims to support SMEs in building long-term capabilities through the hiring and retention of PMETs (professionals, managers, executives, and technicians).
Who can apply?
- Individuals who are Singapore Citizens or Permanent Residents, keen to pursue a full-time career in an SME, and who have graduated or completed National Service at least 2 years prior to application.
- Employers who are registered or incorporated in Singapore with an employment size of not more than 200 or an annual sales turnover of not more than S$100 million.
Start-Up Tax Exemption (SUTE)
The Inland Revenue Authority of Singapore (IRAS) offers tax reliefs for new start-up companies in Singapore for the first three years of tax assessments. From 2020 and onwards, qualifying SMEs can avail of a 75% tax exemption on the first S$100,000 of chargeable income and an additional 50% on the subsequent S$100,000 of normal chargeable income. These Singapore government grants for SMEs offer significant financial advantages for qualifying businesses.
The tax incentive is available to all new SMEs in Singapore, except companies primarily involved in investment holding and companies undertaking property development for sale, investment, or both.
Partial Tax Exemption
The Partial Tax Exemption (PTE) Scheme is available to businesses that are not eligible for the SUTE in the first 3 years or are in their fourth year and beyond. Under the PTE scheme, businesses can receive tax relief on their chargeable income.
The tax relief is provided in two tiers:
- For chargeable income up to S$10,000, a 75% exemption is granted.
- For chargeable income between S$10,000 and S$200,000 (or the next S$190,000), a 50% exemption is granted.
Get the Support You Need
In the competitive business world, time is money. Any Singapore government grants for SMEs that can help you save on valuable resources is one worth looking into. These solutions can help you gain the momentum you need to last past the pandemic and build a thriving organisation.
Whether you’re looking to access capital quickly, engage in third-party help, or adopt new digital business solutions, there’s bound to be a solution for you. Lanturn is a corporate secretary and business service provider that offers a wide range of support.
If you are looking for solutions other than Singapore SME grants, you might find the following articles beneficial:
- 5 Reasons To Outsource Your Payroll Services
- Benefits of Virtual Corporate Secretarial Services in Singapore
- Tips and Tricks to Navigating Singapore’s Tax Season
And if you’re an early-stage startup, small company, or asset management firm with more questions about Singapore’s business landscape, you can always get in touch with Lanturn today.
