Singapore SME Grants & Guides to Expand Business Overseas
6 SME Grants for Market Expansion
After starting your company in Singapore and achieving a certain measure of success, you might be considering overseas expansion. Perhaps you intend to use Singapore as a base of operations while you serve global markets.
Whatever stage your business is in, you should start by looking at Enterprise Singapore. It is a one-stop agency that provides companies in Singapore access to government assistance.
For businesses that want to spread their wings beyond Singapore’s shores, Enterprise Singapore has a range of grants, toolkits, services and networks that you can easily tap into.
1. Market Readiness Assistance (MRA) Grant
The Market Readiness Assistance (MRA) Grant provides SMEs with up to 70% of eligible costs for a total of S$100,000 per new market from 1 April 2020 to 31 March 2023. These costs include overseas market promotion (capped at S$20,000), overseas business development (capped at S$50,000) and overseas market set-up (capped at $30,000).
A new market is defined as an overseas country, where your company has not exceeded S$100,000 in overseas sales in any of the last three preceding years. The grant is disbursed on a reimbursement basis. Refer to the full list of eligible costs.
To be eligible for this grant, your company must be registered and incorporated in Singapore, have at least 30% local shareholding and a group annual sales turnover of not more than S$100 million OR a group employment size of not more than 200 employees.
Sole proprietors and partnerships can also apply for the MRA Grant but this is assessed on a case-by-case basis. For more information on how to apply, visit the Business Grants Portal.
2. International Co-Innovation Programmes
To encourage innovation in companies for growth and internationalisation, Enterprise Singapore has International Co-Innovation Programmes that link local companies with overseas counterparts. This spurs cross-border technology collaboration and the exchange of ideas and knowledge.
The aim for these programmes is to encourage participating companies to co-innovate solutions, build and validate ideas, and scale up in the region together. Currently, participants in the programmes include the EUREKA Network, France, Germany, Israel and Shanghai.
3. Internationalisation Finance Scheme for Non-Recourse (IFS-NR)
A cousin of the Enterprise Finance Scheme (EFS), the Internationalisation Finance Scheme for Non-Recourse (IFS-NR) provides mid-sized companies with up to S$50 million in financing for local and overseas development projects.
The government co-shares default risks with the Participating Financial Institutions (PFIs). Instead of evaluating the borrowers’ balance sheet alone, project income streams will also be taken into account. This allows companies to access financing that would otherwise be unavailable to them.
To qualify for this scheme, companies must be Singapore-based, have an annual sales revenue (including subsidiaries) of less than S$500 million for trading companies or less than S$300 million for non-trading companies.
The qualifying Singapore entity must also have at least 30% equity share in the Special Purpose Vehicle and the overseas venture needs to complement the Singapore company’s core operations and demonstrate clear economic spin-offs to Singapore.
To apply or find out more about your eligibility, you can contact the Participating Financial Institutions, including OCBC, DBS, UOB, Maybank Singapore, RHB Bank and Resona Merchant Bank Asia or e-mail Enterprise Singapore.
4. Multichannel E-commerce Platform (MEP) Programme
If you want to use e-commerce to sell your products overseas, check out the Multichannel E-commerce Platform (MEP) Programme, a joint initiative by Enterprise Singapore and the Infocomm Media Development Authority (IMDA).
Whether you’re a manufacturer, retailer or distributor, MEP connects you with a pre-approved list of overseas e-marketplaces to help you list and sell your products as well as reach new customers.
What’s more, the MEP Programme provides digital marketing support to help you increase brand value and drive traffic, along with training programmes from the Singapore Institute of Retail Studies on how to run a successful e-commerce business.
SMEs who signed up and are eligible for the MEP Programme from 1 April to 30 September 2020 can also receive higher subsidies of up to 90% (instead of 70%) on eligible programme costs for a year.
To be eligible for the MEP programme, your company must be registered and incorporated in Singapore, have an annual overseas online sale not exceeding S$100,000 for each of the three preceding years, have at least 30% local shareholding and a group annual sales turnover of not more than S$100 million OR a group employment size of not more than 200 employees.
5. Double Tax Deduction For Internationalisation (DTDi)
Hidden in the depths of Budget 2018, between the SG Bonus payout and planned GST increase, is the enhancement of a scheme that gives local companies a 200% tax deduction on eligible expenses for international market expansion and investment development activities.
Known as Double Tax Deduction Scheme for Internationalisation (DTDi), companies can enjoy 200% tax deduction for qualifying activities and expenditure across various stages of their overseas growth journey, capped at S$150,000.
To be eligible for DTDi, companies need to be based in Singapore and have the intention to expand in trading of goods or provision of services. All applications must be submitted prior to starting the overseas project.
To register or learn more, visit the DTDi Portal.
6. Political Risk Insurance Scheme (PRIS)
Overseas expansion carries certain risks from political uncertainties. One important tool to manage these risks and safeguard your venture is through political risk insurance (PRI).
These risks include expropriation, political violence, breach of contract by host government, currency inconvertibility and transfer restrictions. With PRI, companies can also increase their access to financing for overseas projects.
With the Political Risk Insurance Scheme, Singapore companies can receive 50% off PRI premium costs for up to the first three years, subject to a maximum amount of S$500,000 per Singapore company.
To qualify for PRIS, companies need to have their global headquarters in Singapore, perform at least three strategic business functions in Singapore, an annual turnover not exceeding S$500 million, an annual total business spending of at least S$250,000 in Singapore for each of the past three years, and a minimum paid-up capital of S$50,000.
To apply, you can approach any Singapore-registered PRI broker or insurer to receive a customised PRI policy, and they will help you apply for a PRI premium support from Enterprise Singapore.
Guides and resources for market expansion
Now you probably realise that entering new markets is as demanding as it is exciting. There are legal, financial, branding, and viability concerns. That’s why you might want to bookmark Enterprise Singapore’s comprehensive export guide as a reference on your journey.
Enterprise Singapore will also provide you with referrals to a list of trusted in-market experts from a range of fields, including legal services, market consultancy, business setup and incorporation, HR and immigration, tax and accounting, customs, and more.
You can also check out GlobalConnect@SBF by the Singapore Business Federation. Thanks to their network of local companies that have overseas operations, they are able to provide dedicated market access support and insights to SMEs of all stages of internationalisation.
Spearheaded by Enterprise Singapore and the Economic Development Board, the Singapore government constantly promotes the Singapore brand and breaks down barriers for Singapore companies. Notable achievements include the many Free Trade Agreements signed with countries around the globe.
The stage has indeed been set for Singapore companies to take their businesses around the world and reach new customers near and far.
Need extra financing during this period?
SMEs can enjoy a financial support of up to S$300,000 through the Working Capital Loan. Good for funding business operations or expansion.
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The information provided herein is intended for general circulation and/or discussion purposes only. Before making any decision, please seek independent advice from professional advisors. No representation or warranty whatsoever in respect of any information provided herein is given by OCBC Bank and it should not be relied upon as such. OCBC Bank does not undertake any obligation to update the information or to correct any inaccuracy that may become apparent at a later time. All information presented is subject to change without notice. OCBC Bank shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person acting on any information provided herein. Any reference to any specific company, financial product or asset class in whatever way is used for illustrative purposes only and does not constitute a recommendation on the same.
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