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Setting up a Singapore Family Office

What is a Singapore Family Office (SFO)?

A Singapore Family Office usually refers to an entity which manages assets for or on behalf of only one family and is wholly owned or controlled by members of the same family. The term ‘family’ in this context refers to individuals who are lineal descendants from a single ancestor, as well as the spouses, ex-spouses, adopted children and step children of these individuals.

SFOs are exempted from engaging in fund management and financial advisory activities from licensing requirements. Under the statutory exemptions, an SFO may be exempted from licensing requirements if it was structured as either (a) a corporation which manages funds for its related corporations, or (b) a corporation that provides financial advisory services to its related corporations.

Requirements to be a SFO

MAS may consider the following to be of a SFO arrangement:

  • where there is no common holding company, but the assets managed by the SFO are directly held by natural persons of a single-family;
  • where assets are held under a  discretionary trust, the settlor of the trust and the beneficiaries are members of the same family;
  • where a family trust is set up for charitable purposes, the charitable trust is funded exclusively by settlor(s) from a single-family; and
  • where non-family members such as key employees of the SFO are shareholders in the SFO for the purpose of alignment of economic interest and risk-sharing, the initial assets and additional injection  of funds are funded exclusively by a single-family.

The business would need to have an interview with the MAS, which we will help to coordinate and prepare the client for.

Tax Exemption

After incorporation of the Single Family Office, various holding companies would be incorporated under the family office structure. There are some conditions that must be met if the corporation wants to qualify for the Enhanced Tier Fund Tax Exemption Scheme (also known as Section 13X).

For example, the office would need to hire at least three investment professionals, invest at least S$50 million into the fund entity and have local business spending of at least $200,000 a year.

The business would have to go through an interview with the MAS, which we will help to coordinate and prepare the client for as well as to see an investment strategy before granting approval for the business to qualify for Section 13X tax exemption.

The 13X exemption allows specified income derived from certain designated investments to be exempted from tax. The designated investments include a wide range of assets such as stocks, shares, securities and derivatives.

Tax Incentives

Family offices in Singapore could apply for a tax incentive under the Financial Sector Incentive-Fund Management Scheme (FSI-FM) which incentivises fund management and the provision of investment advisory services in Singapore.

Under this scheme, fee income derived by a Singapore fund manager from managing or advising a qualifying fund is taxed at a rate of 10% instead of the usual corporate tax rate of 17%. 

To qualify for the scheme, a fund manager must hold a Capital Markets Services (CMS) licence, employ at least 3 experiences investment professionals earning at least S$3,500 per month and have a minimum AUM of S$250 million. This is very relevant for large family offices, where the scale of operations and the income derived from managing or advising qualifying funds could be substantial.

Operational Requirements

The company must first decide where the family office will be located in order to set up the family office. Other administrative tasks include establishing family governance guidelines and come up with a Family Constitution, opening of bank accounts, implementing IT systems for portfolio aggregation and so on.

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Budget 2021 – Emerging Stronger Together

Budget 2021, with the theme Emerging Stronger Together, combines measures to help families, workers and businesses weather the Covid-19 crisis in the immediate term, with measures to accelerate structural adaptations for the long term.

Tax Changes - GST

Extend GST to (i) goods imported via air or post that are valued up to (and including) the current GST import relief threshold of S$400 (“low-value goods”), and (ii) business-to-consumer (“B2C”) imported non-digital services, through the extension of the Overseas Vendor Registration and reverse charge regimes

Existing Tax Treatment

Currently, low-value goods that are worth $400 or less and are imported via air or post are not subject to GST. 

All goods imported via land or sea are already taxed, regardless of value.

B2C imported non-digital services (such as live interaction with overseas providers of educational learning, fitness training, counselling and telemedicine) are also not subject to GST.

New Tax Treatment

GST will be extended to:
a) Low-value goods which are imported via air or post. This will be effected via the Overseas Vendor Registration and reverse charge regimes. Jurisdictions that have extended their GST or Value Added Tax (“VAT”) regimes to cover imported low-value goods include Australia, New Zealand, Norway, Switzerland, and the United Kingdom.

b) B2C imported non-digital services. This will be effected via the Overseas Vendor Registration regime. Jurisdictions which already tax similar services include Australia and New Zealand. 

This change will take effect from 1 January 2023.

Enterprise Financing Scheme - Venture Debt Programme

A programme aimed at startups, where Government takes up to 70% of the risk on loans with participating institutions.

  • Increase cap on loan quantum from $5 million to $8 million
  • Expecting approximately $45 million of venture debt to be catalysed over the next year

CTO(Chief Technology Officer)-as-a-Service

This initiative aims to provide companies with access to professional IT consultancies, to help firms identify and adapt digital solutions more efficiently.

Digital Leaders Programme

Will be launched to help firms hire core teams to further develop their digital transformation roadmap.

Extensions of Existing Business-Focused Schemes

Enhanced support levels of up to 80%, from 70% previously for enterprise schemes, such as Scale-up SG, Productivity Solutions Grant, Market Readiness Assistance, and Enterprise Development Grant from end-September 2021 to end-March 2022.

Local Enterprises Funding Platform

An investment scheme targeted at large local enterprises was announced by Mr Heng. Under the scheme, the Government will set aside $500 million for a commercially managed funding platform with Temasek, which will match the investment. This means there will be S$1 billion in total for the fund manager to invest in non-control equity and mezzanine debt of large local enterprises.

Growth and Transformation Scheme for Built Environment Sector

This scheme is aimed to digitalise processes and upskill workers through the entire value of the Built Environment sector (includes construction, real estate and environment and facility services businesses). It will require developers to work closely with their consultants, contractors, and suppliers to level up as an ecosystem or value chain. 

Further details about the scheme will be given by The Ministry of National Development during the debate on its budget.

Corporate Venture Launchpad (CVL)

The launchpad will provide co-funding for corporates to build new ventures through pre-qualified venture studios.

Open Innovation Platform (OIP)

Enhanced with new features such as a cloud-based Digital Bench for accelerated virtual prototyping and testing. Through OIP, problems faced by companies and public agencies can be matched with solution providers. The platform also co-funds prototyping and deployment.

Global Innovation alliance (GIA)

The GIA catalyses cross-border collaboration between Singapore and major innovation hubs across the globe. Its network has 15 city links, including four South-east Asian cities: Bangkok, Ho Chi Minh City, Jakarta and Manila. This will be expanded to more than 25 cities around the world over the next five years.

In addition, the Co-Innovation Programme will be included in GIA. The programme will support up to 70 per cent of qualifying costs for cross-border innovation and partnership projects.

Jobs Support Scheme (JSS)

Extend support for Tier 1 sectors (Aviation, Aerospace, and Tourism)

  • 30% for wages paid from Apr to Jun 2021, and 10% for wages paid from Jul to Sep 2021

Extend support for Tier 2 sectors (such as Retail, Arts & Culture, Food Services, and Built Environment)

  • 10% for wages paid from Apr to Jun 2021

Covid-19 Recovery Grant

Continual support for workers who lost their jobs or experienced significant income loss.

  • Up to $700 per month for 3 months for employees who have lost their jobs or are placed on involuntary no-pay leave for at least 3 consecutive months
  • Up to $500 per month for 3 months for employees and self-employed persons who are facing average income loss of at least 50% for at least 3 consecutive months

Jobs Growth Incentive (JGI)

The JGI supports employers to accelerate their hiring of local workers between September 2020 to September 2021 (inclusive), so as to create good, long-term jobs for locals.

SGUnited Traineeships

The SGUnited Traineeships (SGUT) programme provides recent graduates with opportunities to gain industry-relevant work experience and build professional networks, amidst weaker hiring sentiments during the COVID-19 pandemic. Workforce Singapore co-funds 80% of the qualifying training allowance for host companies offering traineeship opportunities targeted at recent graduates, with the remaining being funded by the employer.

SGUT will be extended for one year until 31 March 2022 to continue supporting fresh jobseekers from the 2021 graduating cohort, in addition to those who have graduated in 2020 and 2019, with the following adjustments:

  • Starting from 1 April 2021, the stipend for ITE and diploma SGUT positions will be increased from $1,100 – $1,500 to $1,600 – $1,800 and from $1,300 – $1,800 to $1,700 – $2,100 respectively to encourage take-up. The stipend for university SGUT positions will remain unchanged.
  • The maximum duration of each traineeship will be reduced from nine to six months from 1 April 2021 onwards, in line with the economic recovery and to encourage employers to offer trainees full-time jobs.

SGUnited Mid-Career Pathways Programme - Company Attachment (SGUP-CA)

The SGUP-CA programme is a full-time attachment programme with approved host organisations for mid-career individuals to gain industry-relevant experience, develop new skills and boost employability. Trainees currently receive a training allowance of up to $3,000 per month for the
duration of the programme. The Government funds 80% of the training allowance, while the host organisation funds the remaining.

SGUP-CA will be extended for one year until 31 March 2022 to continue supporting mid-career jobseekers with the following adjustments to encourage take-up:

  • The maximum training allowance for mature trainees3 will be increased to up to $3,800 per month.
  • The minimum training allowance for non-mature trainees will be increased to $1,600 per month. 
  • The Government co-funding rate for mature trainees will be increased to 90%.
  • The maximum training duration of each company attachment will be reduced from nine to six months from 1 April 2021 onwards, in line with the economic recovery and to encourage employers to offer trainees full-time jobs.

SGUnited Mid-Career Pathways Programme - Company Training (SGUP-CT)

The SGUP-CT programme is a full-time training programme for mid-career individuals, developed and delivered by market-leading companies such as Google, Shopee, and IBM.

Trainees will receive a training allowance of $1,500 per month for the duration of the programme, to cover basic subsistence expenses. Individuals can use their SkillsFuture Credit to offset the course fees.

SGUP-CT will be extended for one year until 31 March 2022 to continue to support mid-career jobseekers in reskilling and upskilling, with the following adjustments:

  • The capacity of in-demand courses and courses with good hiring opportunities will be expanded, to increase chances of jobseekers securing a job in growth sectors as the economy recovers.
  • SGUP-CT courses will be made more compact from 1 April 2021 onwards, with a duration of up to six months in general, to channel jobseekers more quickly to employment opportunities.

SGUnited Skills (SGUS)

The SGUS programme is a full-time training programme comprising certifiable courses delivered by Continuing Education and Training (CET) Centres, including Institutes of Higher Learning. The training courses are designed in partnership with industry. Trainees will also have the chance to apply the skills learnt during the programme, through opportunities like workplace immersions and industry projects.

Trainees can also benefit from employment facilitation efforts offered by training providers. SGUS courses are conducted in a modular format to facilitate transition to employment as and when job opportunities are present.

Trainees will also receive a training allowance of $1,200 per month for the duration of the programme, to cover basic subsistence expenses. Individuals can use their SkillsFuture Credit to offset the course fees.

SGUS will be extended for one year until 31 March 2022 to continue supporting the reskilling of mid-career jobseekers with the following adjustments:

  • The capacity of in-demand courses and courses with good hiring opportunities will be increased to help jobseekers access job opportunities in growth sectors as the economy recovers.
  • SGUS courses will be made more compact from 1 April 2021 onwards, with a duration of up to six months in general, to channel jobseekers more quickly to employment opportunities.

GST Voucher - Cash Special Payment

Lower-income Singaporeans who qualify for the GST Voucher (GSTV) – Cash (paid every August) will each receive an additional Cash Special Payment of $200 in June 2021. In total, lower-income Singaporeans can receive up to $500 in GSTV – Cash and Cash Special Payment this year, to help them with their daily living expenses. The GSTV – Cash scheme benefits Singaporeans aged 21 years and above in 2021 with:

(i) Assessable Income (AI) for the Year of Assessment (YA) 2020 of not more than $28,000,

(ii) Annual Value of place of residence (as reflected on NRIC) as at 31 December 2020 of not more than $21,000, and

(iii) ownership of not more than one property (see Table 1).

GST Voucher - U-Save Special Payment

All eligible HDB households will receive an additional 50% of their regular GST Voucher (GSTV) – U-Save this year, through a one-off GSTV – U-Save Special Payment (see Table 2). This U-Save Special Payment will be credited in April 2021 and July 2021, together with their regular U-Save.

Service and Conservancy Charges Rebate

Eligible Singaporean households living in HDB flats will receive rebates to offset between 1.5 and 3.5 months of Service and Conservancy Charges (S&CC) over FY2021 (see Table 3).

Top-ups to Child Development Account, Edusave Account, and Post-Secondary Education Account

The Government will provide families with additional support for their children’s education-related expenses. Each Singaporean child will receive a one-off top-up of $200 to the Child Development Account (CDA), Edusave account, or Post-Secondary Education Account (PSEA), depending on his/her age and/or academic level (see Table 4). The top-up to the Edusave account is in addition to the annual Edusave contribution that the Government makes.

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Bigger $50,000 Start-Up Grant for First Time Entrepreneurs

On 17 August 2020, Deputy Prime Minister Heng Swee Keat announced during his Ministerial Speech that S$150 million has been set aside for the enhancement of the Startup SG Founder scheme.

First-time entrepreneurs will be able to access a higher start-up capital grant of S$50,000, up from $30,000, to help them launch their business ideas. In addition to the increase in the start-up grant, a three-month venture building programme has also been introduced to help start-ups get their innovative ideas off the ground.

The reason for the enhancement of the scheme is to spur new development and new growth opportunities. Besides new innovations and solving real world problems, start-ups also help to create more and new types of job opportunities for Singaporeans. By enhancing the Startup SG Founder programme, the government hopes to enable more aspiring entrepreneurs to start new ventures and accelerate the formation of innovative startups in Singapore.

Startup SG Founder "Train" Track

Under the “Train” track scheme, Enterprise Singapore has appointed Venture Builder and Accredited Mentor Partners (‘VB-AMPs’) with strong track records of venture building to provide 3-month Venture Building (VB) programmes to Singaporeans. The programme will provide support for sourcing innovation, commercialising these ideas into scalable businesses, getting product/solution validation from customers and finding capital.

Eligibility

To be eligible for this track, applicants must fulfil the following criteria:
i. Singaporean Citizen or Permanent Resident;
ii. Commit to 100% attendance for the Venture Building Programme;
iii. Commit to running a startup full time after the programme.

They will also need to pass the VB-AMPs’ screening criteria, which is not limited to:
aptitude, expertise, background and related experience.

The table below summarises the eligibilities of different categories of individuals. The
list below is non-exhaustive, and subject to changes by ESG. Categories of individuals
not listed below will be assessed for eligibility on a case-by-case basis by ESG.

 CategoryEligibility for the VB ProgrammeEligibility for Stipends
Applicants who are full time employed, part-time employed, self-employed or freelancing
1Applicants who are currently in part-time or full-time employmentNo, unless applicants are willing to tender the resignations before enrolling into the programme.
If programme-eligible applicants are still serving notice during the
programme, pro-rated stipends will be provided after the notice period ends
2Freelancers Yes, provided applicant can be full time committed to the Venture Building
Programme
Yes
3Self employed i. If the business is registered as a sole proprietor, the treatment for freelancers (case #2) will apply.
ii. For all other business entities, the treatment will follow that of case #5.
Former / current startup founders
4Applicants who have previously incorporated a business entity on ACRA (ie. Pte Ltd / LLC / any other business entities), which was nonrevenue generating and is no longer active YesYes
5Applicants with a business entity that is active and live on ACRA, registered as Pte Ltd / LLC / any other business entities, excluding sole proprietorshipNo. If your business entity is a startup, you may wish to apply for the Startup SG Founder grant, provided you meet the eligibility criteria.
No
6Applicants who have been awarded the Startup SG Founder grantNoNo
Students
7Applicants who are currently in full time studiesOnly students in their final year of studies are eligible for the programme. However, if you currently hold a job, you will not be eligible, as per treatment of case #1.No
8Applicants who are currently in part time studies
Yes, if you can be full time committed to the Venture Building programme.Yes
9Applicants who are still studying and on scholarship that requires them to
serve a bond after graduation		NoNo
Others
10Applicants who have attended any SGUnited Traineeship or SGUnited Skills ProgrammesNoNo
11Applicants who have previously joined other Venture Building programmes (incl. commercial VB programmes)
NoNo

Startup SG Founder "Start" Track

Under the “Start” track scheme, teams of entrepreneurs with innovative business ideas can approach any Enterprise Singapore-appointed Accredited Mentor Partners (AMP) with their innovative business ideas. The AMPs will identify and recommend qualifying applicants for funding support based on the uniqueness of business concept, feasibility of business model, strength of management team, and potential market value. Upon successful application, the AMP will assist the startups with advice, learning programs and networking contacts. Enterprise Singapore will also provide the startups with a startup capital grant of $50,000. Startups are required to raise and commit S$10,000 as co-matching fund to the grant.

Eligibility

Applicants will need to reach out to an Accredited Mentor Partners (AMP) of choice and submit their pitch deck for the AMP’s consideration. AMP will assess applicants based on (but not limited to) the following criteria: 

  • Differentiated business – how novel the idea/product/service/business model/process is compared to what is available in the market
  • Feasibility of the business – whether the revenue model is sustainable
  • Potential market opportunity – how large the size of the target market is, and how the company intends to reach out to its customer segments
  • Management team – whether the founding team demonstrate passion and entrepreneurial spirit, and have the relevant technical and business skills to execute the idea.

If the AMP assesses that the applicant has met the eligibility and evaluation criteria, they will provide a letter of recommendation to the applicant. Applicants must then attach this letter in an online application form to be submitted to Enterprise Singapore within 2 weeks from the receipt of the letter of recommendation. Enterprise Singapore will inform the applicant and AMP on the application status for the grant.

The grant is open to all Singaporeans/Permanent Residents who meet the following conditions at the time of application:

  • The team has at least 3 SC/PRs, who are the main applicants of the grant;
  • At least 2 of the 3 main applicants are first-time founders;
  • The main applicants who are first-time founders must hold a minimum of 30% equity in the company collectively;
  • The company must have a minimum 51% SC/PR shareholdings;
  • The company must not be more than 6 months of incorporation at the point of application to the AMP;
  • The 3 main applicants must contribute meaningfully to the company, and not be employed by another employer;
  • At least 2 of the 3 main applicants should be committed full time to the company, and must be key decision makers of the company;
  • The main applicant(s) must not have received any funding for the proposed business idea from another government organization;
  • The proposed business idea must not be in the following list: cafes, restaurants, night clubs, lounges, bars, foot reflexology, massage parlours, gambling, prostitution, social escort services, employment agencies (including recruiting foreign work permit holders and workers/support staff, relocation services, and manpower services), and geomancy.
Click here to submit your pitch deck to an AMP, and if you have received a Letter of Recommendation from an AMP, you may submit an application to ESG here.

FAQs

When will the enhancements to the Startup SG Founder grant take effect?

The enhancements will take effect on 25 Sep 2020. Any applications received by ESG prior to this date will follow the current Startup SG Founder grant conditions, which include:
i. Grant amount of $30,000 over a 12-month period
ii. Co-matching ratio of 1:3 (ie. Founder(s) must raise $10,000 in capital)
iii. Only one main applicant required
Any applications received by ESG from 25 Sep 2020 onwards will follow the new Startup SG Founder grant conditions, (refer to Para 2.ii). Some key conditions include:
i. Increased grant amount of $50,000 over a 12-month period
ii. Reduced co-matching ratio of 1:5 (ie. co-investment of $10,000 required)
iii. Minimum 3 SC/PR employees (including the founder), two of whom must be first-time founders.

How will the grant be disbursed?

If the AMP wishes to recommend the application, the AMP will decide on appropriate milestones together with the applicant(s). The AMP’s recommended application and milestones will then be surfaced to ESG for vetting and approval. The grant will be disbursed in 2 tranches based on agreed project milestones. You will have up to 12 months from the date of letter of offer to meet the milestones to draw down on the grant.

Is the Startup SG Founder enhancement intended to be a one-off? Or will the S$150 million support startups with further enhancements in the future?

ESG continuously reviews all our programmes including the Startup SG Founder and its appointed AMPs. Any further enhancements will be subject to a review in FY2021. In addition, there are various forms of Startup SG support catered to different stages of startups, e.g. Startup SG Equity and Startup SG Tech schemes. The National Innovation Challenges were also recently launched to spur demand from companies and government agencies for innovative solutions by startups.

Some may consider joining a startup or pursuing entrepreneurship at this point in time as something fraught with risk. Why does ESG encourage individuals to pursue such pathways at this time?

Pursuing entrepreneurship in this time is challenging. But the Government is providing various forms of support to mitigate this risk.

a. The enhancement of Startup SG Founder programme is example. Startups under our Startup SG Founder scheme are closely supported and mentored by ESGappointed AMPs, who provide useful resources, coaching and networks for startups and entrepreneurs to tap on. There is also significant support from government effort and community-led initiatives to help the local startup ecosystem, to mitigate risks in pursuing entrepreneurship during this time.

b. In June 2020, the Special Situation Fund of S$285 million was launched to support promising startups with strong growth potential to continue with innovation and product development in Singapore.

c. The Startup SG Equity scheme was enhanced earlier this year with an additional S$300 million to catalyse more investments into Singapore-based deep-tech startups. Both are done through co-investments with the private sector. Several ecosystem partners have also stepped up to provide mentorship virtually to startups on a pro bono basis. For example, community builders AngelCentral and Found8 launched online sites that list tips and advisories for any startups during this tough time. VCs such as Antler also launched a call to invest in early-stage startups with solutions to tackle COVID-19. It will invest up to US$500,000 by this year in such startups, with the aim to generate more innovative solutions from startups to solve immediate challenges relating to the current pandemic crisis.

With the introduction of the “Train” track, does that mean that startup who wish to apply for the Startup SG Founder must attend the Venture Building programme first?

No. Startup founders who have ready business plans and do not require entrepreneurial training can continue to apply to any existing AMPs to be considered for the Startup SG Founder grant. The introduction of the “Train” track merely offers more support for entrepreneurs who wish to get training and advices for market validation of their business ideas before launching their startups.

Can I request for a face-to-face consultation? How do I set up a business? Who can help me?

If you would like to explore the various support available for startups, you may find it helpful to check out the Startup SG website (www.startupsg.gov.sg) or to make an appointment with one of the SME centres (https://partnersengage.enterprisesg.gov.sg/book-appointment). The business advisors will advise you more on the appropriate schemes and assistance for your business. ESG is unable to vet through or give comments on the business proposal, as ESG can only evaluate grant applications submitted in accordance to the stated requirements of the programme.

Click here for more Startup SG Founder FAQ.

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Enhancements to Grants and Loan Scheme

In the Ministerial Statement made by DPM Heng Swee Keat on Mon, 5 Oct 2020, he stated that there will be an extended and enhanced support for firms and workers.

Companies looking to grow their businesses, increase productivity or expand overseas will soon be able to tap bigger grants and expanded loan schemes. These moves will provide more support for businesses during the Covid-19 pandemic and help them to transform, Trade and Industry Minister Chan Chun Sing said as he announced the enhancements to several grant and loan schemes on Monday, Oct 12.

Market Readiness Assistance Grant

This grant provides Small and Medium Enterprises (SMEs) with financial assistance to help take your business overseas. You will be rewarded a maximum of 2 MRA grants for each fiscal year. To be eligible for this grant, you need to:

  • Be registered or incorporated in Singapore; 
  • Have at least 30% local shareholder;
  • Have a group annual turnover not exceeding S$100 million per year based on most recent audit report or group employment not exceeding 200 employees.

Current Support Level

Up to 70 per cent of qualifying costs, including identifying business partners and setting up overseas.

New Support Level

Up to 80 per cent of qualifying costs from 1 Nov 2020 to 30 Sept 2021. Will also cover participation in virtual trade fairs from 1 Nov 2020. 

Enterprise Development Grant

The Enterprise Development Grant helps Singapore companies grow and transform. This grant funds qualifying project costs namely third party consultancy fees, software and equipment, and internal manpower cost. To qualify for this grant, you need to:

  • Be a business entity registered and operating in Singapore
  • Have a minimum of 30% local shareholding
  • Be in a financially viable position to start and complete the project

Current Support Level

Up to 80 per cent of qualifying costs until 31 Dec 2020.

New Support Level

Higher support of up to 80 per cent extended by nine months to 30 Sept 2021, after which it will revert to up to 70 per cent.

Productivity Solutions Grant

The Productivity Solutions Grant (PSG) supports companies keen on adopting IT solutions and equipment to enhance business processes.

For a start, PSG covers sector-specific solutions including the retail, food, logistics, precision engineering, construction and landscaping industries. Other than sector-specific solutions, PSG also supports adoption of solutions that cut across industries, such as in areas of customer management, data analytics, financial management and inventory tracking.

To help enterprise implement COVID-19 business continuity measures, the scope of generic solutions has expanded to include:

  • Online collaboration tools (including laptop-bundled remote working solutions); 
  • Virtual meeting and telephony tools;
  • Queue management systems;
  • Temperature screening solutions

SMEs can apply for PSG if they meet the following criteria:

  • Registered and operating in Singapore
  • Purchase/lease/subscription of the IT solutions of equipment must be used in Singapore
  • Have a minimum of 30% local shareholding; with Company’s group annual sales turnover less than S$100 million, OR less than 200 employers (selected solutions only)

Current Support Level

Up to 80 per cent of qualifying costs until 31 Dec 2020.

New Support Level

Higher support of up to 80 per cent extended by nine months to 30 Sept 2021, after which it will revert to up to 70 per cent.

Temporary Bridging Loan Programme

The Temporary Bridging Loan Programme (TBLP) allows eligible enterprises to borrow up to S$5 million, with a repayment period of up to 5 years.

Under the scheme, interest rates charged by Participating Financial Institutions (PFIs) are capped at a maximum interest rate of 5% per annum. 

To be eligible for TBLP, you need to:

  • Be a business entity that is registered and physically present in Singapore;
  • At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership

Current Support Level

Loans of up to $5 million, with up to 90 per cent risk-sharing by the Government until 31 March 2021.

New Support Level

Loans of up to $3 million, with up to 70 per cent risk-sharing by the Government from 1 April to 30 Sept 2021.

Enterprise Financing Scheme - Project Loan

This programme helps enterprises finance the fulfillment of secured overseas projects.

The supportable loan types include:

  • Working Capital and Trade Loans
  • Equipment/ Machineries/ Vessels/ Other fixed assets
  • Guarantees

To be eligible for this loan, you are:

  • A Singaporean SME looking to finance the fulfilment of secured overseas projects.

You need to:

  • Be a business entity that is registered and physically present in Singapore.
  • Have at least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership,
  • Have a Maximum Borrower Group revenue cap of S$500 million for all companies…

Current Support Level

Loans of up to $50 million for secured overseas projects, with at least 50 per cent risk-sharing by the Government.

New Support Level

Expanded to allow construction companies to take up loans of up to $30 million for secured domestic projects, with at least 50 per cent risk-sharing by the Government, starting from 1 Jan 2021.

Enterprise Financing Scheme - Trade Loan

Finance trade needs, including:

  • Inventory / stock financing
  • Structures pre-delivery working capital (revolving working capital)
  • Factoring (with recourse) /bill of  invoice/ AR discounting 
  • Overseas working capital loan
  • Bank Guarantee (capped at 2 years tenure)

Eligibility:

  • Be a business entity that is registered and physically present in Singapore, and
  • At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership, and
  • Have Group Annual Sales Turnover of not more than S$500 million

Current Support Level

Loans of up to $10 million, with up to 90 per cent risk-sharing by the Government until 31 March 2021.

New Support Level

Loans of up to $10 million, with up to 70 per cent risk-sharing by the Government from 1 April to 30 Sept 2021.

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Ministerial Statement – Support for Firms and Workers

Enhanced Training Support Package (ETSP)

Providing Strong Support for Firms

In tandem, the government will continue to provide strong support to firms that are growing by:

  • Enhanced support for startups, via the Startup SG Founder programme. Since the announcement of the enhancements in August, more than 500 aspiring entrepreneurs have signed up for the 3-month Venture Building programmes.
  • Provide wage support of between 25% and 50% for each new local hire in firms which increase their total local headcount, through the Jobs Growth Incentive (JGI). The support will be for the first $5,000 of gross monthly wages for up to 12 months.

Jobs Growth Incentive

As persons with disabilities may face greater challenges in finding jobs, the government will provide the higher tier of wage support of 50% under the JGI to all Persons with Disabilities. 

This will apply to new hires of Persons with Disabilities from September 2020 to February 2021.

Boosting Businesses

To give a boost to businesses seeking to internationalise, transform and digitalise, there will be an extension or enhancement to the capability-building grants:

  • Market Readiness Assistance Grant, 
  • Productivity Solutions Grant, 
  • Enterprise Development Grant, and 
  • PACT programme. 

These will enable firms to tap on new sources of growth. MTI will announce details in the coming weeks.

Enhanced Support Through Loan Schemes

  • To provide working capital to support viable businesses, the Temporary Bridging Loan Programme will be extended for another six months, until September 2021, at reduced levels.
  • MAS will also extend the MAS Singapore Dollar Facility for Enterprise Singapore Loan, until September 2021.
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Updates on Rental Relief Framework

Expanded powers for rental relief assessors

Under the rental relief framework, a landlord who is unable to reach an agreement with is tenant may apply to have an independent rental relief ascertain:

a) The tenant’s eligibility for rental waivers (either the portion supported by Government assistance, and/or the portion borne by the landlord)

b) The landlord’s eligibility to provide a reduced amount of rental waivers, on the basis of financial hardship

The amendments to the Act proposed on September 3, will expand the powers of rental relief assessors so that they can make determinations on unresolved disputes relating to the amount of rent to be waived under the framework, where the amount is affected by any of the following factors:

a) The amount of maintenance and service charges, especially where such charges are not explicitly listed in the lease or license agreement

b) The amount that can be offset by assistance provided by the landlord earlier

c) The tenant is occupying the property for only a part of the relief period

d) There are multiple-sub tenants in the same property 

Clarifying interaction between Part 8 and other dispute resolution proceedings

The amendment Bill will also clarify the existing Part 8 of the Act – not yet in force – that allows parties of some contracts to get relief if they are affected by breaches or delays in construction, supply or related contracts.

It will specify that no application for relief for such contracts can be filed if court, arbitral or Building and Construction Industry Security of Payment Act (Sopa) proceedings related to the application have already started.

Conversely, once an application for relief ha been filed, the other parties of the contract cannot commence, arbitral or Sopa proceedings or the same matter, until a determination is made or the application is rejected or withdraw. 

If a determination is made and the terms of the contract are adjusted, any subsequent applications and determinations made under Sopa must be based on the adjusted contract terms. 

In cases where a Sopa application is made before the other party seeks relief under the Act, the Sopa adjudicator will have powers to grant relief – similar to that of the assessors – to account for the impact of Covid-19.

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FAQs on Rental Relief and Property Tax Rebate for SMEs

Rental Relief

The rental relief framework, comprising the Rental Relief and the Additional Rental Relief, applies to eligible tenant-occupiers of prescribed properties in qualifying leases or licences that are in writing, or evidenced in writing, which are:

a) (i) Entered into before 25 March 2020; or (ii) entered into before 25 March 2020 but expired and renewed either automatically or in exercise of a right of renewal in the contract; and

b) In force at any time between 1 April and 31 July 2020 for qualifying commercial properties, and between 1 April and 31 May 2020 for other non-residential (e.g. industrial/office) properties.

Rental Relief

Tenant-occupiers must fall in the following category to be eligible for Rental Relief:

a) Small and Medium Enterprises (SMEs) with not more than S$100 million in annual revenue for the Financial Year 2018 or a later appropriate period where applicable, at the individual or entity level

  • If the tenant-occupier has not carried on business for 12 months or longer as at the last day of its financial year ending on a date in the year 2018, but has carried on business for 12 months or longer as at last day of its financial year ending on a date in the year 2019, the reference period will be FY2019 instead. Id the foregoing does not apply, but the tenant-occupier has carried on business for 12 months or longer as at the last day of its financial year ending on a date in the year 2020, where the date is on or before March 2020, the reference period will be FY 2020. For any other case, the tenant-occupier’s average monthly revenue from the time the tenant-occupier commenced business until 31 March 2020 (both dates inclusive) will be extrapolated for comparison against the $100 million annual revenue threshold.

Additional Rental Relief

The Additional Rental Relief will apply to tenant-occupiers who qualify for Rental Relief, have carried on business at the rented property before 25 March 2020 and meet the following additional criteria:

(a) The tenant-occupier is a company/entity incorporated in Singapore, and if it is a member of a Singapore group of entities during the period 1 Apr 2020 to 31 May 2020, the aggregate revenue for such a group is not more than S$100 million for the Financial Year 2018 or a later appropriate period where applicable; and

(b) The tenant-occupier suffered at least a 35% drop in average monthly gross income at the outlet level from 1 Apr to 31 May 2019, or alternative period if the tenant-occupier was not operational as of 1 Apr 2019.

Note: If the tenant-occupier commenced business after 1 Apr 2019, comparison will be against the period from the date of commencement of business to 24 Mar 2020 (both dates inclusive) to ascertain the decrease of 35% or more. 

a) Rental Relief for eligible SME tenants (supported by Government assistance):

Eligible tenant-occupiers in qualifying commercial properties and other non-residential properties will receive the rental relief through a waiver of rent from their landlords. Property owners will receive support through the: (a) Property Tax Rebate for Year 2020 announced in the Unity and Resilience Budgets; and (b) Government cash grant announced in the Fortitude Budget.

Eligible SMEs in qualifying commercial properties will receive up to 2 months’ waiver of their rent, and eligible SMEs in other non-residential properties (e.g. industrial and office properties) will receive up to 1 months’ waiver of their rent.

b) Additional Rental Relief for SME tenants (supported by landlords/ property owners):

Eligible SME tenant-occupiers who have seen a 35% or more drop in their average monthly gross income due to COVID-19 will receive up to an additional 2 months’ waiver of rent for qualifying commercial properties, and up to an additional 1 month’s waiver of rent for other non-residential properties (e.g. industrial and office properties).

For more details on the definitions of property in each category, please refer to this.

*The value of the rent to be waived is based on the contractual rent of the tenant, excluding any maintenance fee and charges for the provision of services such as cleaning and security.

An intermediary landlord will be required to provide a full waiver to their tenant according to the applicable rental relief period.

  • In such a case, the tenant-occupier should provide its unaudited balance-sheet, profit and loss statement and cash flow statement for the period from the date of commencement of the business (at the prescribed property or any other place) to 31 March 2020 (both dates inclusive), supported by a statutory declaration by the tenant or (if the tenant is an entity) a relevant officer of the tenant.
  • If however, the above is also not available, the tenant should provide a statutory declaration by the tenant or (if the tenant is an entity) a relevant officer of the tenant stating that the revenue of the tenant, calculated using the formula 12xA is not more than $100 million, where A is the average monthly revenue from the business for the period from the date of commencement of the tenant’s business to 31 March 2020 (both dates inclusive).
  • A statutory declaration made in Singapore must be in the form set out in the First Schedule of the Oaths and Declarations Act (Cap. 211) and be made before a Commissioner for Oaths.

The Act provides for a moratorium on enforcement actions against eligible tenant-occupiers for non-payment of rent. Among other things, landlords are prohibited from taking the following actions on the tenant-occupier or the tenant-occupier’s guarantor/surety in relation to the non-payment of rent:

a) Terminating the lease or licence agreement;

b) Exercising the landlord’s right of re-entry or forfeiture under the lease or licence agreement; and

c) Starting or continuing court or insolvency proceedings.

This moratorium does not apply to tenants that are not tenant-occupiers, i.e. they are not operating on the property. It also does not apply to tenant-occupiers that do not meet the criteria for the rental relief, i.e. they are not a SME as defined. The moratorium also does not suspend interest due under lease agreements or license agreement. The moratorium ends when IRAS issues the notice of cash grant to the property owner, or on 31 December 2020 if no such notice is received before then.

If a landlord and tenant-occupier are unable to reach a compromise, the property owner and/or any intermediary landlord(s) may make an application using the prescribed form here within 10 working days after receiving (a copy of) the notice of cash grant, to have a rental relief assessor ascertain whether the tenant-occupier is eligible for Rental Relief and/or Additional Rental Relief. Please refer to the section Application for Assessment for details.

Under the Act, the rent that is payable by eligible tenants to their landlord for the relevant period of rental waiver is statutorily waived once qualifying property owners with eligible tenant-occupiers receive the notice of the cash grant issued by IRAS. This means that as an eligible tenant-occupier you do not need to pay rent for those months.

 

In the case where tenants have already paid rent for those months for which rent is waived, tenants can apply the rental waivers towards the next most immediate months of rent. If there is insufficient time left in the lease, tenants can obtain a refund from the landlord.

 

In cases where landlords had earlier provided assistance to their tenants or reached an agreement to provide assistance to their tenants, in the form of monetary payments or reduction of payments due under the lease agreement, or landlords have passed on the benefit of any Property Tax Rebate for Year 2020 in respect of the property, these can be offset from the landlords’ rental waiver obligations.

The Property Tax Rebate for Year 2020 for non-residential properties and the Government cash grant are based on the Annual Value of the property. This may not be equivalent to the rental waiver to be provided by landlords, which is based on the contractual rent. Tenants will still have to pay for maintenance fee and charges for the provision of services such as cleaning and security. Nevertheless, the landlord is obliged to provide the rental waiver based on the contractual rental as defined, not based on grant by the Government. The Property Tax Rebate and Government cash grant are not intended to cover the full amount of rental waivers exactly.

The Government recognises that there are landlords who may face genuine financial hardship.Landlords who meet all the following criteria may apply to a rental relief assessor to reduce the amount of Additional Rental Relief they have to provide:

a) The applicant landlord must be an individual or a sole proprietor and is the owner of the prescribed property;

b) The aggregate of the annual value of all investment properties (including the prescribed property) owned (whether solely or jointly with another person and whether directly or through one or more investment holding companies) is not more than S$60,000 as at 13 April 2020; and

c) The rental income derived from the property in question in Year of Assessment 2019 constituted 75% or more of the landlord’s gross income.

If the landlord meets the grounds of financial hardship above, the rental relief assessor may halve the amount of Additional Rental Relief to be borne by the landlord, i.e. one month’s rental waiver for qualifying commercial properties, or half a month’s rental waiver for other non-residential properties (e.g. industrial and office properties). The remaining rent payable will be borne by the tenant.

Property Tax Rebate

*Property Tax Rebate is different from Rental Relief

Property TypeComponentTax Rebate
HotelHotel Rooms100%
Function Rooms100%
Shops, restaurants, gym, tenements such as space for vending machine, base station and tour desk100%
Offices that are not used in connection with the operation of the hotel such as serviced offices30%
Retail MallShops and restaurants100%
Offices30%
Office BuildingOffices30%
Shops and restaurants100%
In-house gym that are used exclusively by the occupants of the office building
30%

Owners of qualifying properties are required to unconditionally and fully pass on to their tenant(s) the rebate for the property tax account that is attributable to the rented property based on the period it was rented out, by either reducing or offsetting current or future rentals or  through a payment to their tenant(s), within the prescribed timeframe.

Failure to properly pass on the rebate, or to keep the records (e.g. information on the amount, manner and time of pass on) until 31 Dec 2023, without reasonable excuse, is an offence. Those guilty of such an offence shall be liable on conviction to a fine not exceeding $5,000.

The property owners are to continue to pass on the rebate to their tenants despite any outstanding objections lodged for the year 2020. 

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Ministerial Statement – Aug 2020

On 17 August, DPM Heng released a ministerial statement to continue to support jobs and create new ones and provide further support for sectors which are hit the hardest. The continued support will cost $8 billion.

Extension of Jobs Support Scheme ("JSS")

Extension of JSS

The JSS will be extended by up to seven months, covering wages paid up to March 2021. This will provide continued support for businesses and workers amidst the protracted economic downturn.

The table below shows an overview of the support level based on the projected recovery of the various sectors.

Notes:

1. Firms that are not allowed to resume on-site operations will receive Tier 1 JSS support for September 2020 to March 2021 wages or until such time that they are allowed to resume operations on-site, whichever is earlier.

2. Firms in the Built Environment sector will receive Tier 1 JSS support for June to October 2020 wages, and Tier 2 support for November 2020 to March 2021 wages.

Extended JSS Support

Under the extended JSS, sectors are supported at the following tiers for wages paid from September 2020 to March 2021:

a) Tier 1 sectors (e.g. Aviation, Aerospace, and Tourism) that are currently receiving 75% JSS support, will receive 50% JSS support

b) Tier 2 sectors (e.g. Food Services, Retail, Marine & Offshore, and Arts and Entertainment) that are currently receiving 50% JSS support, will receive 30% JSS support

c) Tier 3 sectors that are currently receiving 25% JSS support, will receive 10% JSS support

i. This is with the exception of selected Tier 3 sectors (i.e. Financial Services, Information and Communications Technology and Media, Biomedical Sciences, Precision Engineering, Electronics and Online Retail and Supermarkets), which will receive 10% JSS support for wages paid from September to December 2020. JSS support for these sectors will cease after December 2020.

d) Employers in the Built Environment sector that are currently receiving Tier 1 (75%) JSS support for wages paid June to August 2020, will continue to receive Tier 1 JSS support (at 50%) for wages paid in September and October 2020, and thereafter Tier 2 (30%) support for wages paid from November 2020 to March 2021.

e) Employers which are not allowed to resume on-site operations during phased re-opening will receive Tier 1 (50%) JSS support for wages paid from September 2020 to March 2021, or until such time when they are allowed to resume operations on-site, whichever is earlier. 

List of Sectors in JSS Support Tier – Tier 1

SectorSubsectorQualifying Criteria
Aviation and AerospaceAviationConsists of:
• Airlines
• Airport ground handlers
• Airport operators
Aerospace maintenance, repair, and overhaul (MRO) operatorsThey must:
• Derive more than two-thirds of their revenue from aerospace MRO; and
• Have one of the following accreditations or regulatory approvals: (i) Singapore Airworthiness Requirements Part 145 (SAR145) or SAR21 from the Civil Aviation Authority of Singapore (CAAS) (or equivalent from Federal Aviation Administration (FAA)/ European Union Aviation Safety Agency (EASA)); or (ii) National Aerospace and Defense Contractors Accreditation Program (Nadcap); and
• Be classified under SSIC 30302.
Aerospace manufacturing operatorsThey must:
• Derive more than two-thirds of their revenue from aerospace manufacturing; and
• Either: be a manufacturing facility of aerospace original equipment manufacturers (OEMs); or have certificates of approved supplier status from aerospace companies; or have the following accreditations or regulatory approvals: (i) SAR145 or SAR21 from CAAS (or equivalent from FAA/EASA); or (ii) Nadcap; and
• Be classified under SSIC 30301.
Major suppliers of parts and services for aerospace MROs and manufacturersThey must:
• Carry out one or more of these activities: (a) machining and assembly; (b) tooling; (c) secondary processes; (d) engineering; (e) repair; (f) customised kitting; and (g) inventory management on behalf of aerospace companies and airlines; and
• Derive more than two-thirds of their revenue from aerospace companies and airlines; and
• Either: have certificates of approved supplier status from aerospace companies; or have the following accreditations or regulatory approvals: (i) SAR145 or SAR21 from CAAS (or equivalent from FAA/EASA); or (ii) Nadcap.
Airline fleet management services operatorsThey must:
• Derive more than two-thirds of their revenue from aerospace companies, airlines and fleet owners; and
• Have the following regulatory approvals: (i) SAR145 or SAR21 from CAAS (or equivalent from FAA/EASA); or (ii) Continuing Airworthiness Management Organization (CAMO) from EASA (or equivalent).
Operators providing training for pilots and crewsThey must:
• Be a CAAS-approved Type Rating Training Organisation (or equivalent from FAA/EASA); and
• Derive more than two-thirds of their revenue from airlines.
Tourism,
Hospitality,
Conventions and
Exhibitions 		Qualifying licensed hotelsThey must be a licensed hotel classified under SSIC 551.
Qualifying licensed travel agentsThey must have more than two-thirds of their revenue from their travel agency business, based on the Annual Business Profile Returns submitted to the Singapore Tourism Board (STB) in 2018.
Qualifying gated tourist attractionsThey must:
• Have more than 30% visitorship from tourists, and
• Be classified under SSICs 91021, 91022, 91029, 91030, 93201, or 93209.
CruiseThey must be a cruise line or cruise terminal operator.
Meetings, incentives, conferences and exhibitions venue operators (MICE)They must be purpose-built MICE venue operators.
MICE and tourism event organisersThey must:
• Be impacted by the deferment/cancellation/loss of sales of at least one MICE/leisure event with at least 20% foreign attendees (residing outside Singapore) and originally scheduled in Singapore between 1 Feb 2020 to 31 Dec 2020; and
• Derive more than two-thirds of their revenue from MICE/leisure events with at least 20% foreign attendees (residing outside Singapore); and
• Be classified under SSICs 82301, 82302 or 82303.
Money changersThey must:
• Be licensed by the Monetary Authority of Singapore (MAS) as either “money-changing licensee” or “major payment institution licensee”; and
• Derive more than two-thirds of their revenue from money-changing services.
Regional ferry operatorsThey must:
• Be licensed by the Maritime and Port Authority of Singapore (MPA) as a Regional Ferry Services Operator; and
• Be classified under SSIC 50013.
Central refund agenciesThey must be central refund agencies certified by the Inland Revenue Authority of Singapore (IRAS).

List of Sectors in JSS Support Tier – Tier 1 (only for June 2020 to October 2020 wages); Tier 2 thereafter

SectorSubsectorQualifying Sector
Built EnvironmentBuilt Environment contractorsThey must be classified under SSICs 41, 42, or 43.
Built Environment consultantsThey must:
• Be registered with the Public Sector Panel of Consultants; or
• Be classified under SSICs 71111, 71113, 71121, or 71125.

List of Sectors in JSS Support – Tier 2

SectorSubsectorQualifying Criteria
Food ServicesLicensed food shops and food stalls (including hawker stalls)They must be classified under SSICs 56, or 68104. Licensees registered as individuals will also be included if they make mandatory CPF contributions for their employees.
RetailQualifying retail outletsThey must:
• Hold a valid Film Exhibition licence from the Infocomm Media Development Authority (IMDA); and
• Be classified under SSIC 5914.
Arts and EntertainmentCinema operatorsThey must:
• Hold a valid Film Exhibition licence from the Infocomm Media Development Authority (IMDA); and
• Be classified under SSIC 5914.
Film distributorsThey must:
• Have transacted with IMDA to classify films for exhibition in cinemas between 1 Apr 2019 to 31 Mar 2020; and
• Be classified under SSICs 59131 or 59139.
Arts and Culture organisationsThey must:
• Meet at least one of the conditions of being a: (i) participant in a project, activity, programme or festival supported by the National Arts Council (NAC) or National Heritage Board (NHB) between 1 April 2018 to 31 March 2020; (ii) Museum Roundtable member before 31 March 2020; or (iii) accredited Arts Education Programme (AEP) provider listed in the 2019-2021 NAC-AEP Directory; and
• Be classified under SSICs 85420, 90001, 90002, 90003, 90004, 90009, 91021, 91022, or 91029.
Land TransportRail operatorsThey must:
• Hold a Land Transport Authority (LTA) New Rail Financing Framework licence; and
• Not receive service payments from the Government for the operation of rail services; and
• Derive more than two-thirds of their revenue from rail-related activities.
Point-to-Point (P2P) transport operatorsThey must hold an LTA taxi service operator licence; or an LTA third-party taxi booking service operator licence.
Private bus and limousine operatorsThey must:
• Have “P” plate buses or sedans/multi-purpose vehicles (MPVs) registered as Z10, Z11, R10, R11 vehicles; and
• Be classified under SSICs 49212, 49219, 77101, or 52299.
Marine and OffshoreMarine and OffshoreThey must:
• Derive more than two-thirds of their revenue from the following activities: (i) manufacture and repair of oil rigs; (ii) building of ships, tankers and other ocean-going vessels (including conversion of ships into off-shore structures); (iii) repair of ships, tankers and other ocean-going vessels; (iv) manufacture and repair of marine engine and ship parts; and/or (v) manufacture and repair of oilfield and gas field machinery and equipment components (e.g. derricks, tool joints, process modules and packages); and • Be classified under SSICs 30110, 28112, 28241, or 28242.

List of Sectors in JSS Support – Tier 3B: Sectors that are managing well (JSS support until December 2020 wages, discontinued thereafter)

SectorSubsectorQualifying Criteria
Biomedical SciencesBiomedical SciencesThey must be classified under SSICs 21011, 21012, 21013, 2102, 2103, 266, 325, 46461, 46592, 72101, 72107, or 72109.
Precision EngineeringPrecision EngineeringThey must be classified under SSICs 22191, 22192, 22193, 22199, 22211, 22214, 22215, 22216, 22218, 22219, 2222, 25113, 2513, 2591, 2592, 2593, 2594, 25951, 25959, 25993, 25995, 25997, 25998, 25999, 26127, 2651, 2652, 2670, 271, 273, 28111, 2812, 2814, 2815, 2816, 2818, 2819, 2822, 28243, 28249, 2825, 2826, 2827, 2829, or 283.
ElectronicsElectronicsThey must be classified under SSICs 2611, 26121, 26122, 26123, 26124, 26125, 26126, 26129, 262, 263, 264, or 26801.
Financial Services Financial Services They must:
• Be classified under SSICs 641, 643, 649, 65, and 66; or
• Be MAS-regulated firms classified under SSIC 642.
Information and Communications Technology and MediaInformation and Communications TechnologyThey must be classified under SSICs 4651, 46521, 46523, 46591, 58202, 61, 62011, 62013, 62014, 62019, 6202, 6209, 631, 63909, 72105, 74111, 77341, 78101, 822, or 9511.
MediaThey must be classified under SSICs 46444, 581, 58201, 60, 62012, 63901, or 9101.
Postal and CourierThey must be classified under SSIC 53.
RetailSupermarkets and Convenience StoresThey must be classified under SSICs 4711, or 47192.
Online RetailThey must be classified under SSIC 4791.
Tier 3A: Others (JSS support till March 2021)
OthersAll other employersN/A

For more information, please click here to visit the IRAS JSS website.

Extension of Workfare Special Payment ("WSP")

As part of the Care and Support Package announced at Budget 2020, all Singaporean employees and Self-Employed Persons (SEPs) who received Workfare Income Supplement (WIS) payment for Work Year (WY) 2019 are receiving a $3,000 Workfare Special Payment (WSP) in 2020. The first payment of $1,500 was made to eligible Singaporeans in July 2020. They will receive their next and final tranche of WSP ($1,500) in October 2020.

The WSP has been extended to include lower-wage workers aged 35 and above in 2020 who received WIS payment for WY2020, and who have not already qualified for WSP  previously (see Table 1). A one-off payment of $3,000 will be given to eligible individuals from October 2020 onwards.

Click here to find out more on the Care and Support Package can be found at the Care and Support Package.

Jobs Growth Incentive ("JGI")

There are bright spots amidst the severe economic situation especially in healthcare, F&B, manufacturing, biomedical sciences, financial services, and ICT sectors where they are constantly needing more workers. To support hiring in growing sectors, the Jobs Growth Incentive, or JGI will be launched. The JGI supports the Government’s efforts to create new jobs for workers, with a special focus on mature workers. $1 billion have been set aside to support firms to increase their headcount of local workers over the next six months.

For each new local hire, Government will provide wage subsidy for 12 months:

• Up to 25% for those below 40 years old, subject to cap

• Up to 50% for those aged 40 and above, subject to cap

More details about this programme will be released later this month.

COVID-19 Support Grant

The Covid-19 Support Grant (CSG) was introduced in May to complement the ComCare scheme in these extraordinary times. More than 60,000 residents have benefited, with more than $90 million disbursed so far. 

• The application period has been extended up to December 2020

• Open to both existing CSG recipients and new applicants from 1 October 2020

• Unemployed applicants must demonstrate job search or training efforts to qualify

The Ministry of Social and Family Development will share more details in early September.

Preserving Core Capabilities

Further support for hardest-hit sectors such as aerospace, aviation, and tourism to retain core capabilities.

• $187 million to extend support measures in the Enhanced Aviation Support Package up to March 2021. This package includes cost relief to our airlines, ground handlers, cargo agents and airport tenants so as to support local carriers to regain Singapore’s air connectivity to the world.

• Temporary redeployment programme scaled up for workers in the aviation sector  

• $320 million to boost domestic tourism through tourism credits for Singaporeans (SingapoRediscovers Vouchers)

Startup SG Founder programme

To continue to spur innovation and entrepreneurship, up to $150 million has been set aside. The government will raise the startup capital grant and continue to provide mentorship.

The Ministry of Trade and Industry will provide more details about the StartupSG Fouder Programme later this week.

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China’s Income Tax Policy in Relation to Overseas Income

On 17 January 2020, China’s Ministry of Finance and State Taxation Administration jointly issued the “Announcement on Individual Income Tax Policy in relation to Overseas Income” (Ministry of Finance and State Taxation Administration Announcement 3 of 2020). This announcement applies from the 2019 tax year. This means that income earned overseas by China tax residents will be taxed. 

Announcement 3 sets out the relevant policies regarding this new income tax policy. The key contents include:

  • Classification of overseas income
  • Calculation of taxable income
  • Foreign tax credit (“FTC”)

Residence rules

An individual is domiciled in China if:

(a) They habitually reside in China by reason of permanent registered address, family ties, or economic interests; or

(b) holds a Chinese passport or a hukou (household registration).

Classification of Overseas Income

The following categories of income are considered as overseas income:

Income categoriesBasis of income sourcing
(1) Income from provision of labour services outside China (including employment income and independent personal service income)The overseas location where the labour or employment activities are carried out.
(2) Authors’ remuneration paid and borne by enterprises and other organisations outside China;The overseas location of the enterprise or organisation which pays and bears the remuneration.
(3) Royalties received from the grant of concessions outside China;The overseas location where the concessions are utilised.
(4) Income from business operations and productions outside China;The overseas location where business operation or production is carried out.
(5) Interest and dividend income obtained from enterprises, other organisations and non-resident individuals outside China;The overseas location where the interest and/or dividend paying parties are based.
(6) Income from lease of overseas properties;The overseas location where the leased property is used.
(7) Capital gains from the transfer of real estate, transfer of equity stocks, stock options, or other financial assets (hereinafter referred to as financial assets) of overseas enterprises or other organisations, or from the transfer of other assets outside China;Real estate: the overseas location where the asset is located;
Financial assets: the overseas location where the invested enterprise or other organisation is based.
It is worth noting that if more than 50% of the fair value of the assets of the invested enterprise or other organisation comes directly or indirectly from real estate located in China at any time during the three years (36 consecutive months) prior to the transfer, the gains from the transfer of the assets would be deemed as China sourced.
(8) Incidental income obtained from enterprises, other organisations and non-resident individuals outside China;The overseas location where the incidental income paying parties are based.
(9) Separate rules may apply if otherwise determined by the Ministry of Finance or the State Taxation Administration.N/A

Personal Income Tax Rate

The following table shows the latest Income Tax Rate for residents in China.

Annual taxable income (CNY) Tax rate (%)Quick deduction (CNY)
0 to 36,00030
Over 36,000 to 144,000102,520
Over 144,000 to 300,0002016,920
Over 300,000 to 420,0002531,920
Over 420,000 to 660,0003052,920
Over 660,000 to 960,0003585,920
Over 960,00045181,920

How to calculate Taxable Income?

Domestic and foreign income subject to consolidated tax calculation

Comprehensive income

Annual comprehensive income = comprehensive income within China + comprehensive income from overseas

Income from business operations

Annual operating income = income from domestic operations + income from overseas operations

Losses from business operations in a particular overseas jurisdiction cannot be offset against income from operations in China or other overseas locations. However, the losses may be used to offset business operating income at the same location in future tax years, based on the relevant tax law in China.

Domestic and foreign income subject to separate tax calculation

Income derived from interest, dividends, property lease, property transfer, and incidental income cannot be consolidated with China-sourced income and shall be subject to tax calculation separately.

Foreign Tax credit ("FTC")

Announcement 3 makes it clear that where resident taxpayers receive overseas income during a tax year, FTC will be granted where foreign income tax has been paid in the overseas location in accordance with the tax law in that jurisdiction, subject to limits. The formula is as follows:

Tax / refund due for the tax year = total tax liability for the tax year – overseas tax liability allowable as credit (not exceeding the tax credit limit)

The amount of overseas tax exceeding the tax credit limit can be utilised in the following five tax years.

Overseas income not allowed for FTC

The following are the circumstances that are not allowed and shall be excluded from the FTC claim:

  1. Overseas tax paid or collected by mistake;
  2. Tax which should not be levied in the overseas jurisdiction under the Double Tax Treaty between China and the foreign country (or under the Double Tax Arrangement between Mainland China and Hong Kong and Macao);
  3. Late payment interest and/or penalties imposed by overseas tax authorities for underpayment or late payment of overseas income tax;
  4. Overseas income tax which is due for refund or compensation from the overseas tax authorities;
  5. Overseas income which is tax-exempt under the China IIT Law and Implementation Rules.

Singapore’s Tax Treaty with China

As there is an agreement between The Government of The Republic of Singapore and The Government of The People’s Republic of China, China residents receiving an income from Singapore or vice-versa, will be eligible for double tax relief if conditions are met. However, this is not an exemption of tax, but rather a reduction of tax.
According to Article 22 of the treaty, elimination of double taxation in China shall be eliminated as follows:

(a) Where a resident of China derives income from Singapore the amount of tax on that income payable in Singapore in accordance with the provisions of this Agreement, may be credited against the Chinese tax imposed on that resident. The amount of the credit, however, shall not exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and regulations of China.

(b) Where the income derived from Singapore is a dividend paid by a company which is a resident of Singapore to a company which is a resident of China and which owns not less than 10 per cent of the shares of the company paying the dividend, the credit shall take into account the tax paid to Singapore by the company paying the dividend in respect of its income.

In Singapore, double taxation shall be avoided as follows:

(a) Where a resident of Singapore derives income from China which, in accordance with the provisions of this Agreement, may be taxed in China, Singapore shall, subject to its laws regarding the allowance as a credit against Singapore tax of tax payable in any country other than Singapore, allow the Chinese tax paid, whether directly or by deduction, as a credit against the Singapore tax payable on the income of that resident.

(b) Where such income is a dividend paid by a company which is a resident of China to a resident of Singapore which is a company owning directly or indirectly not less than 10 per cent of the share capital of the first-mentioned company, the credit shall take into account the Chinese tax paid by that company on the portion of its profits out of which the dividend is paid.

Note:

Singapore employment income is not taxed in China according to the provisions of Articles 16, 18 and 19 of the treaty, salaries, wages and other similar remuneration derived by a resident of a Singapore State in respect of an employment shall be taxable only in Singapore unless the employment is exercised in the China. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in China.

When it comes to profits earned from interest, royalties and dividend payments, special reduced rates apply, as follows:

Dividends

Dividends paid by a company which is a resident of China to a resident of Singapore may be taxed in Singapore.

However, such dividends may also be taxed in China of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of Singapore, the tax so charged shall not exceed:

(a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital in the enterprise paying the dividends;

(b) in all other cases, dividend payments are taxed at a rate of 10%.

Interest

Income arising from interest issued by a bank or financial institution which is a resident of China to a resident of Singapore, may be taxed in Singapore.

However, such interest may also be taxed in China of which the bank or financial institution paying the interest is a resident and according to the laws of that State, but if the beneficial owner of the interest is a resident of Singapore, the tax so charged shall not exceed:

(a) 7 per cent of the gross amount of the interest if it is received by any bank or financial institution

(b) 10 per cent of the gross amount of the interest in all other cases.

Royalties

Royalties in this treaty means payments of any kind received as consideration for the use of, or the right to use, any copyright of literacy, artistic or scientific work including cinematograph films, or films or tapes for radio or television broadcasting, any computer software, patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience.

These royalties derived from China and paid to a resident of Singapore, may be taxed in Singapore, and vice-versa.

However, if the beneficial owner of the royalties is a resident of Singapore, the tax charged shall not exceed 10 per cent of the gross amount of the royalties.  

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Different Business Structures in Singapore

There are a lot of factors needed to be considered when it comes to choosing a business structure as there are various types of it and each has its own advantages and disadvantages. There are five different types of business entities in Singapore which are:

1) Sole Proprietorship
2) Partnership
3) Limited Partnership
4) Limited Liability Partnership
5) Company

This guide will cater an overview of the numerous types of business entities in Singapore and the differences among them. 

1) Sole Proprietorship

A Sole Proprietorship, also known as a Sole Trader, is a business owned by one person.

Requirements:

He/She has to be either:

  • a Singapore Citizen
  • Singapore Permanent Resident
  • EntrePass Holder,
  • age 18 and above and
  • is not an undischarged bankrupt.
    •  

If a foreigner wishes to set up a business, he/she must designate a local representative.

The local representative must be:

  • A natural person
  • At least 18 years old
  • Of full legal capacity
  • Ordinarily resident in Singapore (i.e. has a Singapore residential address)
  •  

Closing a sole proprietorship

A sole proprietorship business will cease when the proprietor passes away or wishes to end the business. The Business Registration Act requires any person registered under it who has ceased to carry on business to notify the Registrar of this. Failing to do so is an offence and may result in the imposition of a fine.

If the sole-proprietorship is GST registered, the business owner has to apply for cancellation of GST registration with IRAS first.

Things to note

Sole proprietorship is ideal for those who are planning to start a one-person business and don’t expect the business to grow beyond yourself. It is the easiest and simplest to manage, yet the riskiest compared to the other business entities. Otherwise, one should consider this as a serious drawback and it is not recommended to inspiring entrepreneurs.

Profits are taxed at personal income tax rates ranges from 0% to 22%.

It is not a separate legal entity from the business owner and as such, the business owner is personally liable for all the debts and losses of the sole proprietorship, and the business owner can sue or be sued in his or her own name.

2) Partnership

Business partnerships are formed by the agreement between 2 or more individuals (maximum 20)  to carry on a business as co-owners.

Requirements

They has to be either:

  • a Singapore Citizen
  • Singapore Permanent Resident
  • EntrePass Holder
  • age 18 and above and
  • is not an undischarged bankrupt
  •  

 A local manager has to be appointed and is at least 18 years old and is not an undischarged bankrupt.

Closing a partnership

A partnership business will cease when one of the partners dies or when one of the partners wishes to terminate the business with the agreement of the other partners.

If the partnership is GST registered, the partners has to apply for cancellation of GST registration with IRAS first.

Tax Rates

Likewise, the tax rate imposed will be that of the partner, example; if the partner is an individual, the personal income tax rates will apply, if the partner is a company, corporate tax rates would apply. Personal tax rate ranges from 0% to 22%. The partnership income tax is paid by the partnership, but the profits and losses are divided among the partners, and paid by the partners, based on their agreement.

The risk of a partnership are similar to the Sole Proprietorship, thus it is not recommended for high-risk businesses and businesses with enthusiastic growth plans.

A partnership does not have its own separate legal identity from the partners. Therefore, unless otherwise agreed, the partnership will come to an end each time a partner leaves.

3) Limited Liability Partnership

Limited Liability Partnership is the most recent and most advanced business incorporation structure, as it combines the features of both partnerships and companies. It is a separate legal entity from their owners, which means that owners are not responsible for any debts or losses the business incurs.

Requirements

LLP have to have at least two partners who can be individuals (at least 18 years old) or body corporate (company or LLP) .

Every LLP must have at least one manager. He/She has to be who is an ordinary resident in Singapore and age 18 years and above.

Closing a LLP

An LLP will continue to exist until it is dissolved. Dissolution usually occurs after a process called “winding-up” has been completed.

Winding up begins after dissolution, where all partnership affairs will be settled. This includes the completion of unfinished transactions, payments to creditors, liquidation of assets and the distribution of proceeds to various partners.

Then will the partnership be terminated when all the partnership matters have been fully wrapped up.

Things to note

An LLP is capable of:

    • Suing and being sued in its name;
    • Acquiring and holding property in its name;
    • Having a common seal in its name and
    • Doing such other acts and things in its name, as bodies corporate may lawfully do and suffer.

The key features of a limited liability partnership are as follows:

Limitation of liabilities

The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.

Declaration of solvency

LLP must submit to the Registrar an annual declaration of solvency or insolvency (i.e. being able or unable to pay its debts respectively) which will be made available to the public.

LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.  It is mainly meant for carrying a profession (e.g. accountants, law firms, architects, etc.) where two or more professionals would like to build a joint practice in a common field, and is not suited for businesses that carry a trade. The owners must enter into detailed agreements about how the profits and management responsibilities are divided.

Perpetual Succession

The LLP has perpetual succession, which means that any change in the partners of a LLP will not affect its existence, rights or liabilities.

3) Company

A company is a separate legal entity and can incur debt, sue and be sued. A company’s business line depends on its structure, which can range from a partnership to a proprietorship, or even a corporation. 

Companies may be either be:

  • public; having 50 members or less, or
  • private; can have more than 50 members. 
  •  

Requirements

Likewise, a company must designate a local director that is at least 18 years old and is an undischarged bankrupt. 

Things to note:

A private limited company is the most common form of the company chosen by entrepreneurs and investors, mainly due to the tax incentives that can be applied for.

A company is considered as a separate legal entity which means that the members of the company will not be held personally liable for the debts or losses of the company. 

Unlike all the other business entities, a private limited company can qualify for tax exemption schemes and is taxed at the effective corporate tax rate of 17%.

Perpetual Succession

Members in a company may come and go but the company will still remain and proceed to continue its business forever or until it is closed down. This means that a company has the characteristics of perpetual succession, thus giving the company a safer and a more stable area for investors to invest their money on and enhance the chances of their investment being a success. 

Closing a Company

A company can cease to exist in one of the two options, either by;

  • winding up or,
  • striking off

Comparison

Sole Proprietorship

Partnership

Limited Liability Partnership

Company

  • It is easy to set up and the cost is minimal.
  • Owner has full control of the business.
  • All the profits generated by the business will belong to the sole-proprietor.
  • Profits are taxed at personal income tax rates
  • No separate legal entity.
  • Has unlimited liability.
  • It can sue or be sued in the owner’s name.
  • No perpetual succession.
  • No corporate tax incentives and benefits.
  • It is easy to set up and the cost is minimal.
  • Easier administration and management of the business.
  • Reduced compliance obligations.
  • No separate legal entity.
  • Has unlimited liability.
  • Flexibility of succession is variable.

  •  

  • It is easy to set up and the cost is minimal.
  • Easier administration and management of the business.
  • Reduced compliance obligations.
  • Separate legal entity.
  • Perpetual succession.
  • Flexibility of succession is variable.
  • Difficult to transfer ownership of business.
  • Higher registration cost and its costly to maintain due to more compliance obligations.
  • Limited liability.
  • Excellent tax benefits.
  • Perpetual Succession.
  • Separate legal entity.
  • Annual General Meeting has to be conducted.
  • Annual Return filing with the Authority.
  • Estimated Chargeable Income and Corporate Tax to be filed.