Over the past few decades, the Singapore Government, with its business-friendly policies, has consistently ensured the country remains a preferred destination for foreign investors and entrepreneurs, consolidating its already massive reputation as the regional hub for start-ups.
A huge plus is that the vibrant startup ecosystem in Singapore is now being supported by a new initiative from the country’s leading agency SPRING, (mandated by the Ministry of Trade and Industry to help Singapore companies grow), called Startup SG.
A launch pad for entrepreneurs, which provides them a platform to access local support initiatives and get connected to the global entrepreneurial network, Startup SG in no time has become the go-to-source for entrepreneurs for loans, grants, funding, and capability-enhancement.
What is Startup SG?
The platform is categorised under six different pillars dealing with all aspects of a start-up ecosystem. These are:
- Start SG Founder – providing valuable mentoring to first-time entrepreneurs
- Startup SG Tech – providing early-stage funding for commercialising a tech idea
- Startup SG Equity – providing equity investment for start-ups,
- Startup SG Accelerator – providing enhancing capabilities to accelerators or incubators
- Startup SG Talent – providing guidance on how to attract and retain promising global talent
- Startup SG Loan – providing start-ups with much-needed financing
The details of each are as below.
1) What is Startup SG Founder
This provides start-up capital grant – SPRING matches $3 for every $1 raised by the entrepreneur – and mentorship to first-time entrepreneurs with innovative business ideas.
For this, SPRING has appointed 17 Accredited Mentor Partners (AMP) – after a call-for-partnership in March-April 2017 – whose job is to identify qualifying applicants based on the uniqueness of business concept, the feasibility of business model, strength of management team, and potential market value.
The next chance to become an AMP will be at the end of 2017, and as in the first round, all applicants will be assessed on the strength of their incubation and management team, programme quality and operational sustainability.
How to apply under the Startup SG Founder scheme
This scheme is open to all Singaporeans/Permanent Residents who are first-time entrepreneurs and are ready to commit full-time to their company, along with being involved in key decision making. They must also not be in any other employment from the time they accept the terms and conditions of the Letter of Offer.
You don’t need to incorporate a company to apply. If you have, it should not be incorporated for more than six months at the point of application to SPRING. Also, the incorporated entity must have at least 51 percent of local shareholding, with the applicant holding at least 30 percent equity stake in it.
While SPRING takes the final call on the grant, all applications must go through AMPs.
AMPs, after their own assessment, can recommend the application to SPRING, together with appropriate milestones for disbursement of grant amounts. They also assist the entrepreneurs with startup advice in their development process over the 12-month incentive period. This includes information on how to access various business learning programs and develop useful contacts through networking.
Do note that a progress update on meeting milestones is also regularly submitted to SPRING, which is essential for future disbursement of grants. Moreover, you can’t apply for the Startup SG Founder grant if you have received funding for the proposed business idea from another government organization.
In summary, to apply, you need to submit a completed Startup SG Founder Application Form, an ACRA e-statement declaring that the main applicant is a first-time entrepreneur, a business plan, and CVs of the management team. The last two are optional but are always recommended.
Related Article: Learn how to apply for the Startup SG Founder Scheme
2) What is Startup SG Tech
This provides early-stage competitive grants to companies for the commercialisation of proprietary technology. It includes both Proof-of-Concept (POC) and Proof-of-Value (POV) grants depending on the technology’s developmental stage, which tech start-ups can use to develop proprietary solutions and build scalable business models.
How to apply under the Startup SG Tech scheme
Dealing directly with SPRING, start-ups have to go through a three-stage process under this. First is the registration of interest, second is an invitation from SPRING to submit a formal application after it has done an initial assessment, and third is the final evaluation done by a panel of industry experts based on the proposals’ innovativeness, technical feasibility and commercialisation potential. Preference is given to proposals which are a breakthrough level of innovation, and lead to or build on proprietary know-how and intellectual property. Do note that your proposal must include a detailed cost breakdown as well.
The grant cap for POC is at $250,000 and POV at $500,000, and start-ups are required to inject an increase in paid-up capital of 10 percent and 20 percent of the grant money for POC and POV respectively.
Grants are given on completion of each milestone, and carry an equity component where SPRING has the rights to exercise a share subscription of 50 percent of the awarded grant to SPRING, up to 49 percent of the total shareholding of the company. This, the agency says, will be done when a qualifying equity financing round occurs.
It’s important that the project you are applying for must not have commenced at the time of application. Another important consideration for eligibility is that the company’s group annual sales turnover is not more than $100 million or group employment size is not more than 200 workers.
Sectors preferred include advanced manufacturing, robotics, healthcare, biotechnology and biomedical sciences, information and communication technologies, clean technologies, precision engineering, transport engineering and engineering services.
Finally, to be considered for this grant, applicants should be a start-up company, with all core activities carried out in Singapore. The company must have at least 30 percent local shareholding, and must not have been registered more than five years ago calculated from the time of grant application.
3) What is Startup SG Equity
Here the Singapore Government co-invests in a start-up along with third party investors in a ratio of 7:3 up to $250,000, and 1:1 thereafter up to the investment cap of $2 million for general tech companies. For deep tech companies, the figures are 7:3 up to $500,000, and 1:1 thereafter up to the investment cap of $4 million. Notably, the the Government only co-invests if the interested third party individual or corporate investors are prepared to invest at least $50,000 each, and are able to contribute to the start-up’s growth via management experience, relevant business contacts and necessary technical expertise.
This scheme is aimed at stimulating private-sector investments into Singapore-based technology start-ups with global market potential.
How to apply under the Startup SG Equity scheme
Start-ups must submit a two-page executive summary, a business plan, financial statements, Business ACRA, and background of potential co-investor for a first-level assessment. Along with the usual conditions of ensuring that the company was incorporated less than five years ago, has clear internationally scalable business model, has substantial intellectual product content and has all its core activities in Singapore, make sure:
- the company is not a subsidiary of a joint-venture
- has paid-up capital of at least $50,000
- has a ready, independent third-party investor(s)
4) What is Startup SG Accelerator
It provides funding and non-financial support to incubators and accelerators working in strategic growth sectors. This assistance is not available to venture capitalists and consultancy firms.
How to apply under the Startup SG Accelerator scheme
The incubators or venture accelerators can use this funding support to cover partial operating expenses such as salaries of the incubation team, hiring of mentors and experts to guide start-ups, and expenses in developing programmes to help start-ups develop new products and services, obtain business financing, and improve market access. But to be approved, they must have a long-term sustainable revenue model, possess a unique value proposition and must be led by an experienced management team with the necessary expertise to groom innovative start-ups.
5) What is Startup SG Talent
The aim here is to foster a conducive environment for promising global talent to set up innovative businesses in the city-state, as well as help start-ups attract good talent. The scheme has three avenues for this – EntrePass, T-UP and SME Talent Programme (STP) for Start-ups.
How to apply under the EntrePass scheme
EntrePass is a work pass scheme, which was overhauled on August 3, 2017, to facilitate and simplify the entry of global entrepreneurial talent into Singapore. Along with SPRING, InfoComm Media Development Authority (IMDA), and the National Research Foundation, supported by SGInnovate, are the other two government agencies appointed to assess and support EntrePass applicants who meet the criteria.
Issued under the three categories of Entrepreneur, Innovator, and Investor, the minimum criterion set for each is as follows:
|Has at least S$100,000 monetary funding from a Government-recognised VC or business angel||Holds intellectual property||Hold good track record of investing in businesses and want to grow new or existing businesses in Singapore NEW|
|Is an incubatee at a Government-recognised incubator/accelerator||Has research collaboration with an Institute of Higher Learning or credible research institute in Singapore (i.e. A*STAR)|
|Holds significant business experience/network and promising entrepreneurial track record NEW||Has exceptional technical/domain expertise in an area related to proposed business NEW|
If you are unable to meet any of the above criteria, it is always advisable to go for a Singapore Employment Pass.
Also, having already registered (for not more than six months) – or intend to (after knowing the outcome of the application) – a private limited company in Singapore is a prerequisite for all. While earlier, applicants were required to hold at least 30 percent share in the registered company, the enhanced scheme has deterred that requirement until the end of year one of holding the EntrePass.
Other key enhancements to the scheme are the recognition of non-monetary contributions of global start-up talent such as expertise and relevance to industries. That’s why the Government has now removed the S$50,000 paid-up capital requirement.
Do note that the validity period of each EntrePass is now extended from one to two years, after the first renewal to provide more certainty for global entrepreneurs in scaling up their businesses. So, new pass or first renewal will be for one year, and subsequent renewals will be for two years. Renewals are based on documentary proof of ongoing business activities as described in the original business plan, and that you hold at least 30 percent shareholding of the company. As an EntrePass holder, your family members can join you in Singapore if you meet certain requirements.
In summary, an EntrePass holder must:
|No. of years you have held an EntrePass||Total business spending** must be at least||Must employ at least|
|2*||$100,000||3 FTES** OR 1 PME***|
|4||$200,000||6 FTEs OR 2 PMEs|
|6||$300,000||9 FTEs OR 3 PMEs|
|8 or more||$400,000||12 FTEs OR 4 PMEs|
*Hold a minimum of 30% shares in the Company from Year 2
**Total Business Spending (TBS) refers to total local business spending excluding renumeration to EntrePass holder
***Full-time Employees (FTEs) refer to Singaporeans and Permanent Residents who earn a monthly salary of at least $1,100
****PMEs refer to professionals, managers and executives who are Singaporeans or Permanent Residents and earn a monthly salary of at least $3,600
Note: 1 local PME = 3 local FTEs
How to apply under the T-Up scheme
This scheme subsidises up to 70 percent of the secondment costs of research scientists and engineers from A*STAR’s Research Institutes for a period of up to 2 years. Singapore-registered small and medium enterprises (SMEs), with a minimum of 30 percent local shareholding, and group annual turnover of not more than S$100 million or group employment size of not more than 200 workers, are eligible to apply.
How to apply under the SME Talent Programme (STP) for Start-ups scheme
Run by Action Community For Entrepreneurship (ACE), this assistance (70 percent subsidy in stipends paid to interns) facilitates intern-ship matching between students and technology-based local start-ups. To be eligible, SMEs must have a minimum of 30 percent local (Singaporean or Singaporean PR) share-holding, must have less than 50 percent ordinary shares owned by other corporate entity, and be less than 5 years from date of incorporation at time of application.
6) What is Startup SG Loan
These are Government-backed loans – can be used either as working capital, equipment/ factory financing or trade financing – and offered through participating financial institutions. The major categories include:
- SME Micro Loans – up to S$100,000 working capital financing of for companies with 10 or less employees
- SME Venture Loan – up to S$5,000,000 for high-growth companies for the purpose of business expansion
- SME Working Capital Loan – up to S$300,000, unsecured working capital financing, in place till May 31, 2019
- SME Equipment and Factory Loans – up to S$15 million to purchase equipment, machines or selected factory properties
Even before Startup SG, Singapore – with low corporate tax rates, tight intellectual property rights regime, integrity, skilled man-power, high productivity, rule of law, good connectivity and a high quality of life – was on everybody’s radar to incorporate a start-up. Now, with Startup SG, choosing Singapore as the launch pad for your company’s businesses in Asia makes more sense, and is easier.
Take that decision now, and let Singapore Company Incorporation, with an experience of incorporating over 10,000 business entities in the last two decades, help you with it.
Grab the Startup SG opportunity and start a business today
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