Techblog
Assistance schemes to help SMEs in a challenging economy
Looking to expand your business? Here are some grants to help give SMEs a leg up.
By the myBusiness techblog team
Small and Medium-sized Enterprises (SMEs) are the lifeblood of Singapore's economy. According to a report by SPRING Singapore, 99 percent of all enterprises on the island are SMEs, and these employ 70 percent of all workers, contributing 50 percent of the national GDP*.
Singapore's size, however, means that its SMEs can be a little more vulnerable to changing tides in the international economic arena. The ebb and flow of demand and changes in trends from large manufacturers, for example, can spell a windfall for local firms if they catch the wave quickly.
Thankfully, there are a number of grants available to SMEs to help them capitalise on these opportunities. There are some 100 programmes run by different government agencies for SMEs, but information on the grants can be disparate. We’ll zero in on some highlights here.
Staff training
The Productivity and Innovation Credit (PIC) has been getting a fair bit of notice, because of its breadth of coverage for common SME business hurdles.
One of its aims is to help businesses with the cost of training, so as to raise productivity. You have two options: The first, they can claim a tax deduction of 400 percent of your training expenses up to $400,000. Alternatively, they can convert 60 percent of up to $100,000 of the expenses into cash. This covers both in-house and external training.
If you're stuck on where to look for training programmes, the Workforce Development Authority (WDA) is a great resource. The government agency has more than 8,000 courses going on, and will subsidise up to 90 percent of course fees for employers when they send their employees to their courses.
Employers worried about the drop in productivity when employees have to go for training are also covered. Under the WDA's Workfare Training Support (WTS) scheme, companies can get up to 95 percent of absentee payroll (capped at $1,900) covered, which should help in finding temporary replacement staff.
IT equipping
The aforementioned PIC grant has a portion that caters to IT costs, where you can claim the cash conversion or tax rebate off acquiring new IT and automation equipment. This includes graphic processing equipment, PCs, communications infrastructure, computer-controlled machining tools, and automated equipment for warehouses, to name some.
Separately, the Infocomm Development Authority (IDA) also runs a collaboration scheme with Spring Singapore, called iSPRINT. SMEs can claim up to 70 percent of costs for their first purchase of a packaged IT solution such as IT software for human resources and payroll processing, for example.
Getting bigger
First announced during Budget 2013 this year, a new grant called the Marketing Readiness Assistance (MRA) grant is aimed at helping SMEs expand overseas. This is targeted at SMEs with less than $100 million in turnover, and is aimed at helping them defray the cost of getting a consultant to assess foreign market entry.
International Enterprise (IE) Singapore will co-fund 50 percent of each company's costs, capped at $20,000 annually. This is also extended to trade associations and chambers of commerce, for such entities to support the hiring of staff to seek out overseas business opportunities for their members.
The Economic Development Board (EDB) also has a Development and Expansion Incentive (DEI) scheme that was created to encourage local companies to expand their operations in the country such as setting up new factories or expanding production capacity.
This also covers companies looking to move into higher-value business activities, and the procurement of advanced machinery and equipment towards that goal. Under the DEI, the government will offer a reduced tax between 5 and 10 percent on the incremental income derived from these expansions and upgrading activities.
Here are a list of the grants we talked about, and where you can get more information about them.
- IRAS: Productivity and Innovation Credit (PIC)
- MOM: Workfare Training Support (WTS)
- IDA: iSPRINT
- IE Singapore: Market Readiness Assistance (MRA)
- EnterpriseOne: Development and Expansion Incentive (DEI)
Additionally, you can reach out to the SME Centre@SCCCI through the Grants section of myBusiness. The centre's team of consultants will be able to assist you the grants and schemes provided by the various government agencies.
*SPRING Singapore: http://www.spring.gov.sg/NewsEvents/PS/Pages/Welcome-Address-by-Mr-Teo-S...