Complete Guide of Government Support for Foreign-Owned Startups in Singapore

Singapore’s rise as a global innovation hub attracts startups worldwide, fueling a surge in Singapore foreign-owned startups.

A business-friendly environment, a competitive 17% corporate tax rate, and political stability are key attractions. Notably, Singapore permits 100% foreign ownership, a major draw for international entrepreneurs. Coupled with various government grants Singapore offers, along with other incentives and support programs, this open-door policy has fostered a thriving startup ecosystem. 

This blog post serves as a guide for foreign entrepreneurs navigating Singapore’s landscape of government support and available grants for Singapore foreign-owned startups.

Why Choose Singapore for Your Foreign-Owned Startup?

Before diving into the specifics of government support, including Singapore grants for foreign companies, it’s essential to understand why Singapore is such an attractive destination for startups:

• Business-Friendly Environment: Singapore boasts a streamlined incorporation process, allowing for quick and easy business registration. Foreigners can own 100% of their Singapore foreign-owned startups, removing many common barriers to entry.
• Attractive Tax Regime: Low corporate tax rates, coupled with tax exemptions for startups in their early stages, and the absence of capital gains tax make Singapore a fiscally advantageous location for foreign-owned startups in Singapore.
• Strategic Location: Situated at the heart of Southeast Asia, Singapore offers excellent connectivity to major Asian markets, providing a gateway to regional expansion.
• Stable Political and Economic Climate: A stable political environment, robust legal framework, and a thriving economy provide a secure and conducive environment for Singapore foreign-owned startups to flourish.
• Skilled Workforce: Singapore has a highly educated and diverse workforce, ensuring access to a talent pool capable of driving innovation and growth.

5 Key Government Support Programs for Startups

The Singaporean government offers a range of programs designed to support Singapore foreign-owned startups and other businesses at various stages of development. Here are some of the key initiatives:

1. Startup SG Founder Program:

This program focuses on first-time entrepreneurs, providing financial assistance and mentorship.

• Financial Support: Grants of up to SGD 50,000 are available, disbursed in tranches based on achieving milestones.
• Co-Matching: A unique feature is the co-matching requirement. For every SGD 10,000 invested by the founder or an Accredited Mentor Partner (AMP), the program provides SGD 50,000.
• Mentorship: Participants are paired with AMPs who offer guidance on business strategy, networking, and business plan refinement.

How To Apply For Startup SG Founder Program:

• Select an Accredited Mentor Partner (AMP): Choose an AMP who will guide you through the application process.
• Prepare Necessary Documents: Required documents include:
  • A recommendation letter from the AMP
  • A detailed business plan and pitch deck
  • CVs of all key applicants
  • ACRA profiles for all main applicants and the incorporated company.
• Submit the Application: The completed application is submitted through the selected AMP, who will review it for eligibility before forwarding it to Enterprise Singapore for approval.
• Funding Disbursement: Once approved, funds are released in stages based on milestone achievements over a 12-month period

Important Note for Foreign Founders: While founders of Singapore foreign-owned startups can participate, the main applicant must be a Singapore Citizen (SC) or Permanent Resident (PR), and at least 51% of the company’s shares must be held by SCs or PRs. This means forming a partnership with a local resident is crucial for accessing this program.

2. Startup SG Equity:

This program facilitates co-investment opportunities, with the government investing alongside private investors.

• Funding Structure: The government can invest up to 70% of the funding, with different caps depending on the type of startup (e.g., SGD 250,000 for general tech startups).
• Eligibility: Startups must demonstrate strong growth potential and innovation.

How To Apply For Startup SG Equity:

• Initial Submission: Startups must submit a two-page executive summary, business plan, financial statements, ACRA profile, and background of potential co-investors for a first-level assessment.
• Eligibility Check: Ensure that your startup has been incorporated for less than five years, has a clear internationally-scalable business model, and substantial intellectual property content.
• Final Assessment: If the initial submission is successful, you may be invited for further evaluation by Enterprise Singapore 

3. Enterprise Development Grant (EDG):

The EDG supports projects that help businesses upgrade, innovate, and expand overseas.

• Funding: Provides up to 70% funding for qualifying project costs, including consultancy fees, software, and equipment.
• Eligibility: Companies registered in Singapore with at least 30% local shareholding are eligible. This makes it accessible to foreign-owned startups in Singapore that meet this ownership requirement.

How To Apply For Enterprise Development Grant (EDG):

• Application Preparation: Prepare a detailed project proposal outlining how the project will help your business upgrade, innovate, or expand.
• Submission: Submit your application through the Business Grants Portal. Ensure that your company meets the local shareholding requirement (at least 30%).
• Funding Approval: Once submitted, your application will be assessed based on its merits and alignment with EDG objectives

4. Startup SG Tech:

This program supports early-stage tech startups in developing innovative technologies.

• Funding: Offers Proof-of-Concept (POC) grants (up to SGD 250,000) and Proof-of-Value (POV) grants (up to SGD 500,000).
• Eligibility: Singapore foreign-owned startups focusing on deep tech and innovative solutions with at least 30% local shareholding can apply.

How To Apply For Startup SG Tech:

• Registration of Interest: Start by registering your interest in the program.
• Formal Application Submission: After an initial assessment by Enterprise Singapore, submit a formal application that includes detailed cost breakdowns and project descriptions.
• Evaluation Process: Your proposal will undergo evaluation by a panel of industry experts based on innovativeness and commercial viability 

5. Market Readiness Assistance (MRA) Grant:

The MRA Grant supports businesses looking to expand into international markets.

• Funding: Covers up to 70% of qualifying costs related to marketing and business development activities, capped at SGD 100,000.
• Eligibility: Businesses must be operational in Singapore.

How To Apply For Startup SG Tech:

• Eligibility Check: Ensure that your business is operational in Singapore and meets other eligibility criteria.
• Application Preparation: Prepare documentation detailing your marketing and business development plans.
• Submission: Applications can be submitted via the Business Grants Portal, where you’ll need to outline how the grant will assist in your international expansion efforts.

Additional Support Mechanisms:

Beyond the core Singapore grants for foreign companies, several other support mechanisms can benefit startups in Singapore:

• EntrePass: This work pass is specifically designed for foreign entrepreneurs looking to establish innovative Singapore foreign-owned startups. It offers a pathway to residency and facilitates access to the startup ecosystem. Key criteria include innovation, business track record, and investment.
• Employment Pass (EP): While not exclusively for startups, the EP is a common work pass for foreign professionals, including founders and key employees. Eligibility is based on salary, qualifications, and experience.
• SkillsFuture Enterprise Credit (SFEC): This program encourages Singapore enterprises, including startups, to invest in workforce training and development by providing credits that can be used to offset training costs.
• Productivity Solutions Grant (PSG): The PSG supports businesses in adopting IT solutions and equipment to enhance productivity. While it has local shareholding requirements for some categories, it can be a valuable resource for streamlining operations.
• Various Industry-Specific Schemes: Depending on your industry (e.g., fintech, medtech), there may be specific grants and programs available. Research resources from relevant government agencies and industry associations.
• Incubators and Accelerators: Singapore has a thriving ecosystem of incubators and accelerators that provide mentorship, networking opportunities, and sometimes even seed funding. Examples include Plug and Play, Startupbootcamp, and JFDI.Asia.

Key Considerations for Singapore Foreign-Owned Startups:

• Local Shareholding: Many grants require a certain percentage of local shareholding (typically 30% or more). Partnering with a Singaporean citizen or permanent resident is often essential.
• Business Plan: A well-structured and compelling business plan is crucial for securing funding.
• Application Process: Familiarize yourself with the application process for each of the government grants Singapore offers and ensure you meet all eligibility criteria. The Business Grants Portal is the central platform for grant applications.
• Mentorship: Seek out mentorship opportunities to gain valuable insights and guidance.

A Quick Guide for Setting Up Your Singapore Foreign-Owned Startup: 

1. Company Registration: Register your company with the Accounting and Corporate Regulatory Authority (ACRA). You can do this online through BizFile+.
2. CorpPass: Register for a CorpPass, which is required for accessing government digital services, including grant applications.
3. Visa/Work Pass: If you plan to relocate to Singapore, you’ll need to apply for an appropriate visa or work pass, such as the EntrePass or Employment Pass.
4. Office Space: Secure office space or consider co-working options.
5. Bank Account: Open a corporate bank account in Singapore.

By understanding the available government support programs and fulfilling the necessary requirements, foreign entrepreneurs can significantly enhance their chances of success in Singapore’s dynamic startup ecosystem. Remember to research thoroughly, network effectively, and seek professional advice when needed.

Conclusion

Singapore’s government funding for startups Singapore, along with other government support, is a testament to its commitment to fostering innovation and entrepreneurship. With a range of grants, programs, and support mechanisms, foreign entrepreneurs can navigate the landscape and access funding, mentorship, and other resources essential for success. These government grants Singapore provides are crucial to the success of many startups in the country.

The following table provides a quick overview of some of the most important government grants Singapore offers to startups, along with key eligibility criteria.

Program	Focus	Key Features/Funding	Eligibility (Key Considerations for Foreign Founders)
Startup SG Founder	First-time entrepreneurs.	Grants up to SGD 50,000 (disbursed in tranches). Co-matching: For every SGD 10,000 invested by founder/AMP, program provides SGD 50,000. Mentorship from Accredited Mentor Partners (AMPs).	Main applicant must be SC/PR. At least 51% of company shares must be held by SC/PRs.  Foreigners can participate as co-founders.
Startup SG Equity	Co-investment with private investors.	Government invests up to 70% of funding (various caps depending on startup type).	Must be a Singapore-based startup with growth potential and innovation.
Enterprise Development Grant (EDG)	Business upgrading, innovation, overseas expansion.	Up to 70% funding for qualifying project costs (consultancy, software, equipment).	Companies registered in Singapore. At least 30% local shareholding.
Startup SG Tech	Early-stage tech startups (deep tech).	Proof-of-Concept (POC) grant: Up to SGD 250,000. Proof-of-Value (POV) grant: Up to SGD 500,000.	Startups focusing on deep tech and innovative solutions. At least 30% local shareholding. Core operations predominantly in Singapore.
Market Readiness Assistance (MRA) Grant	Overseas market expansion.	Up to 70% of qualifying costs for marketing/business development (capped at SGD 100,000).	Business must be operational in Singapore.

To ensure your startup journey in Singapore is smooth and fruitful, remember to carefully review the eligibility criteria, prepare a compelling business plan, seek mentorship, and partner with local entities if necessary. 

As the leading IT solution and consultant in Singapore for the last 15 years, Vinova can provide the guidance you need to launch your business. Contact us today and embrace the opportunities Singapore offers, and join the vibrant community of entrepreneurs shaping the future.