Govt to help firms innovate, expand overseas

SINGAPORE — More support for innovation and research and development. Funding for promising start-ups. Incentives to promote industry collaborations. These are some of the measures outlined in the Budget to help spur innovation, internationalisation as well as acquisitions.

Finance Minister Tharman Shanmugaratnam in the Budget introduced new schemes, such as a pilot venture debt risk-sharing scheme and a new tax incentive for larger companies expanding overseas.

He also highlighted enhancements to older schemes such as SPRING Singapore’s Capability Development Grant (CDG), Startup Enterprise Development Scheme (SEEDS) and Business Angel Scheme (BAS).

To support SME innovation, the CDG, which financially assists SMEs to develop capabilities such as consultancy, manpower, training, certification and employment, will be made more accessible by simplifying the application process for projects under S$30,000, Mr Tharman said. The CDG’s enhanced funding support of up to 70 per cent of qualifying costs will be extended for three years till end-March 2018.

SPRING’s Collaborative Industry Projects (CIP) will also be expanded, while the Partnerships for Capability Transformation (PACT) will be extended and enhanced.

To fund future efforts in research and development, the National Research Fund will also be increased by S$1 billion this year.

To ensure that promising companies have access to the capital, the co-investment cap for the SEEDS and BAS initiatives will be increased. The Government will also top up the BAS to partner with more angel investors with experience in nurturing innovative start-ups, said Mr Tharman.

In addition, as an alternative to traditional bank loans, the government will pilot a venture debt financing initiative in which SPRING will share 50 per cent of the risks with selected financial institutions in loaning to start-ups.

To help local companies grow revenues, the Government will help them internationalise, said Mr Tharman.

First, the support level for SMEs for activities under the International Enterprise Singapore’s grant schemes will be raised to 70 per cent from 50 per cent.

Second, the Double Tax Deduction for Internationalisation will be enhanced to cover salaries incurred for Singaporeans posted overseas.

Third, a new International Growth Scheme will be introduced to provide companies with a 10 per cent concessionary tax rate on their incremental income from qualifying activities.

Finally, to encourage mergers and acquisitions, the government will raise tax allowances for acquisition costs and lower the shareholding threshold for claiming M&A benefits. ANGELA TENG

READ THE FULL BUDGET STATEMENT HERE

Other documents on Budget 2015 available on the Budget 2015 website.