Singapore Fact-File Part 5:
Small Business Incentive Programs

5.3 Singapore R&D Tax Credits

The authorities in Singapore are very supportive of research and development activity, and in recent years, a number of schemes have been introduced to assist enterprises looking to innovate, including the R&D Incentives for Start-Up Enterprises (RISE) scheme, and the Production and Innovation Credit (PIC).

RISE is designed to allow start-ups engaging in intensive research and development (who are more likely than other enterprises to be incurring losses) to convert a portion of those losses into cash grants.

In order to be eligible, in addition to conducting such R&D activity, the start-up must be resident, incorporated, and carrying out the research in Singapore, and the share capital must be owned by between 1 and 20 shareholders (who must comprise either all individuals, or at least one individual holding at least 10% of the ordinary issued shares). Additionally, the first three years of assessment must be between 2009 and 2013.

The losses can be converted to cash grants at up to SGD20,250 per year of assessment, for the three years in question, if the company has incurred at least SGD150,000 in qualifying R&D expenses during the basis period in question (usually the preceding financial year).

The Productivity and Innovation Credit (PIC), introduced by Budget 2010, provides enhanced deductions for investment in activities such as registration or acquisition of intellectual property, R&D, training, automation through technology or software, and design activity.

The credit is available between 2011 and 2015, and allows 250% deductions relating to qualifying activity, capped at SGD300,000 for each year, and with a combined cap of SGD600,000 for the first two years of the scheme, 2011 and 2012). To further support small businesses with limited cashflow, it is possible to convert SGD300,000 of PIC into a cash grant of up to SGD21,000.