Government Support Schemes for Singapore’s SMEs in 2021

A Comprehensive Guide to Singapore Employment Act

Doing business amid a pandemic is highly challenging, especially for small and medium-sized enterprises (SMEs). However, if you are a small business owner in Singapore, you have better luck. This is because the Singapore government has implemented new initiatives and actions to help SMEs develop new potential, address short-term problems, and embrace a future for long-term growth through Budget 2021.

As a small business owner, it would be an excellent move to tap into these government support schemes as this means you don’t have to stop hiring, reduce your number of employees or reduce your current marketing spending. 

We understand how tough it is to focus on growing your business in the face of turbulent times. Therefore, you can always reach us if you need help with corporate secretarial or accounting tasks. And, here are several government support schemes that you can consider applying for this year. 


How to Qualify as an SME in Singapore

Before applying for an SME grant, you must make sure that your business qualifies as an SME. Three main criteria to be considered an SME in Singapore are:

  • Be registered and operating in Singapore;
  • Have a minimum of 30 percent local shareholding; and
  • Have no more than 200 workers in total or a company’s group annual sales turnover under S$100 million.

Note that most SME grants favor locally owned companies. A foreign-owned company must have at least a Singapore citizen or Permanent Resident (PR) sharing ownership to be eligible to apply for an SME grant.

It is also important to recognize that different SME grants may have different definitions of eligible applicants. Therefore, SMEs should only take the three criteria listed above as a general guideline.


Government Support Schemes for Productivity, Digital Transformation & Business Growth 

To stay relevant in the market, companies must make digital transformation a priority. After all, it is no longer an option but an important business strategy that must be combined with other operating initiatives.

In addition, digital transformation contributes to employee productivity, especially when manual processes can be automated. Thus, there will be more time to focus on bigger opportunities. 

With this in mind, the Singapore government has introduced special grants and schemes to help SMEs with productivity, digital transformation, and business growth.


Productivity Solution Grant (PSG)

PSG covers sector-specific solutions, including the retail, food, logistics, precision engineering, construction, and landscaping industries. Apart from sector-specific solutions, PSG also supports the adoption of solutions across sectors, such as customer management, data analytics, financial management, and inventory tracking.

This solution has been pre-covered by various government agencies such as Enterprise Singapore (ESG), the National Environmental Agency (NEA), and the Singapore Tourism Board (STB).

As announced in the 2021 Budget, the maximum support level increased to 80% will be extended from 30 September 2021 to 31 March 2022.

For additional information, click here.


Enterprise Development Grant (EDG)

The Enterprise Development Grant (EDG) helps Singapore companies grow and transform. The grant supports projects that help you scale your business, innovate, or venture abroad, under three pillars:

1. Core Capabilities

Projects under Core Capabilities help businesses prepare for growth and transformation by strengthening their business foundations. Therefore, it must go beyond basic functions such as sales and accounting.

2. Innovation and Productivity

Projects under this pillar support companies exploring new growth areas or looking for ways to increase efficiency. These can include reviewing and redesigning workflows and processes. Companies can also take advantage of automation and technology to make routine tasks more efficient.

3. Market Access

Projects under Market Access support Singapore companies willing and ready to venture overseas. In addition, you can use the EDG to help finance some of the costs of expanding into overseas markets.


Digital Resilience Bonus (DRB)

The Digital Resilience Bonus (DRB) aims to enhance companies’ digital capabilities based in the Food and Retail Services sector. Companies in this sector have been heavily affected by safe distance requirements in the re-opening of the economy.

The DRB is provided on top of the enhanced digitization assistance provided under the SMEs Go Digital program. For example, food and Retail Service companies with PayNow Corporate accounts yet don’t have suffixes, electronic invoicing, and use predefined digital solution categories for Business Processes, Digital Presence, and Data Mining and Analytics can receive bonus payments of up to $10,000.


Digital Leaders Programme

Developed collaboratively by the Infocomm Media Development Authority (IMDA) and ESG, the Digital Leaders Programme (DLP) seeks to help promising local companies across all industries to accelerate their digital transformation journey. This program will help companies that are ready to integrate digital technology into their core business strategies to develop new digital capabilities, so they can develop innovative business models and seize new growth opportunities.


100% Investment Allowance

100% Investment Allowance (100% IA) is a scheme that supports the amount of approved capital expenditure for automation projects approved by ESG under the EDG. The amount IA offers tax reliefs can be used to offset current taxable income when calculating the amount of tax payable.

The approved capital expenditure for the 100% IA support remains capped at $10 million per project. Companies may indicate interest in the IA scheme when applying for EDG for their automation projects. ESG will evaluate the application and advise on their eligibility. The extension of 100% IA will be implemented from 1 April 2021 to 31 March 2023.


Market Readiness Assistance (MRA)

SMEs will receive an international boost with the MRA grant to help them take their business overseas. Eligible SMEs will receive the following support:

Up to 70% of eligible costs, capped at S$100,000 per company per new market from 1 April 2020 to 31 March 2023 that covers:

  • Overseas market promotion (capped at S$20,000)
  • Overseas business development (capped at S$50,000)
  • Overseas market set-up (capped at S$30,000)

Each application is limited to one activity in a single overseas market (e.g., market entry or participation in a trade fair)

Note: The MRA Grant support level of up to 70% will be extended until 31 Mar 2023.


COVID-19 Relief Measures for SMEs in Singapore

To help businesses tide through the pandemic, there are specific COVID-19 grants and schemes that the government offers.


Jobs Support Scheme (JSS)

The JSS was introduced in the 2020 Budget to provide wage support for employers to retain local employees for this period of economic uncertainty. This scheme has been extended by up to 6 months from April 2021 to September 2021, co-funding 10% to 30%.

Employers should act responsibly and moderately in the use of payouts, taking references from tripartite advisors on salary and leave arrangements. If there is evidence of irresponsible and unfair treatment, employers can be denied job support (including the JSS) and have their right to work access restricted.


Enterprise Financing Scheme – Trade Loan (EFS-TL)

The EFS-TL (formerly known as Loan Insurance Scheme Plus) supports companies’ trade financing needs. This was previously upgraded in April 2020 to provide a higher government risk-share of 90% and a higher maximum loan quantum of $10 million.

  • The upgraded EFS-TL has been extended for another six months, from 1 April 2021 to 30 September 2021.
  • The maximum loan quantum will remain at $10 million from April 1, 2021, to September 30, 2021.
  • The Government’s loan risk portion will be reduced to 70% from 1 April 2021 to 30 September 2021.


Enterprise Financing Scheme – Project Loan (EFS-PL)

The EFS-PL has been upgraded from 1 January 2021 to 31 Mar 2022 to support project loans for domestic construction projects and overseas projects.

  • The maximum loan quantum for domestic project loans is $30 million.
  • The government’s risk-share of loans is up to 70%.


Temporary Bridging Loan Programme (TBLP)

The TBLP was introduced in the 2020 Budget to provide additional working capital support for companies.

  • The TBLP has been extended for six months, from 1 April 2021 to 30 September 2021.
  • The maximum loan quantum was $5 million through March 31, 2021. This has been lowered to $3 million from April 1, 2021, to September 30, 2021.
  • The government’s risk-share of loans was 90% until 31 March 2021. This has been reduced to 70% from 1 April 2021 to 30 September 2021.


Grants for Workforce & Talent Development 

The government also provides grants to help companies develop the potential of their employees. By upgrading employees with relevant skills and additional knowledge to handle their jobs more efficiently and effectively, there will be individual and collective growth. As a result, the company can remain competitive despite its challenges today.


Jobs Growth Incentive (JGI) 

The JGI program supports employers who hire local job seekers, where there is an increase in the overall size of the local workforce and an increase in the local workforce earning more than or equal to $1,400 per month, compared to their local workforce in the initial month.  This support is 25% of the first $5,000 of gross monthly salary paid to all new local employees for up to 12 months.


SGUnited Traineeships Programme

SGUnited Traineeships Programme encourages companies to join as host organizations to accept new graduates as trainees to support their business needs. It aims to provide up to 21,000 training opportunities for recent graduates or those about to graduate. After completing the training period, organizations may consider hiring suitable trainees for permanent job roles.

The government will fund 80% of the training allowance. However, this monthly training allowance varies based on training coverage.


Capability Transfer Programme

The Capability Transfer Programme provides funding support for businesses to:

  • bring foreign specialists into Singapore to train their local employees in new capabilities on a time-limited basis;
  • send local trainees for overseas training attachments to acquire new capabilities; and 
  • support local specialists (who were previously trained by foreign specialists or trained overseas) conducting capability transfer training for locals.


SkillsFuture Enterprise Credit (SFEC)

The SkillsFuture Enterprise Credit (SFEC) is intended to encourage employers to invest in the transformation of their company and the capabilities of their employees.

Eligible employers will be awarded a $ 10,000 one-time credit which can cover up to 90% of their own expenses for qualification costs for supported initiatives, over and above the support level of the existing scheme.


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