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Singapore boosts grant, tax schemes to help companies go global
SINGAPORE is doubling down on helping companies venture abroad, with key grant and tax schemes expanded by Minister for Trade and Industry Chan Chun Sing on Tuesday.
With global supply chains disrupted by the ongoing Covid-19 epidemic worldwide, the minister, who hopes to sign the 15-member Regional Comprehensive Economic Partnership mega-trade deal this year, also told the House that companies here “have to fundamentally re-examine the resilience of our supply chains” and diversify sources and markets for supplies and manpower.
“To differentiate ourselves, we can no longer rely on tax incentives alone,” he said, citing fiercer competition among countries for “top investments” and even the poaching of top executives.
“Instead, Singapore must continually build real and new capabilities, augment our Singapore core with global talent, and find new ways to anchor key economic activities here.”
Suggesting that Singapore can adapt to these supply chain changes with an upgraded free trade agreement (FTA) network, as well as more digital economy agreements that address new technologies like artificial intelligence, Mr Chan added: “As we enhance our trade agreements, we must also help our companies to take advantage of them.”
To that end, the Market Readiness Assistance grant scheme, which was introduced in 2013 to help small and medium-sized enterprises set up shop overseas, will now cover more activities, such as FTA consultancy services.
And third-party consultancy costs for finding potential business partners, staff and customers will now also qualify for the Double Tax Deduction Scheme for Internationalisation, which provides tax breaks on certain overseas market development and investment activities.
“Moving ahead, we will significantly strengthen our support to companies that want to go international,” said Mr Chan at his ministry’s Committee of Supply debate.
Under the enhanced Market Readiness Assistance scheme, the government will cover up to 70 per cent of qualifying activities for three more years, until March 31, 2023. The co-funding level had earlier been slated to return to 50 per cent in 2020.
The grant limit for each new market will be raised from S$20,000 to S$100,000 during this period, and the annual cap of two grant applications for each company will be temporarily lifted.
FTA consultancy services, as well as business development activities in the target market, such as office rentals or posting staff abroad, will also be added to the list of qualifying activities.
Meanwhile, the Double Tax Deduction For Internationalisation, which provides 200 per cent tax deductions on certain expenses, will get a five-year extension to Dec 31, 2025.
The overseas business mission funding category is also being expanded to include costs such as fees for speaking spots at overseas trade events, and transport expenses for sample goods.
The changes to both schemes will take effect on April 1, 2020.