Singapore offers a wide range of investment incentives for investors including tax holidays and concessions, accelerated depreciation schemes, grants and favorable loan conditions to attract investments. The tax incentives and grants offered in Singapore are in the form of exemption from tax, reduction in the rate of tax or subsidies, and are available to a very broad range of industries.
SCHEMES & GRANTS
1. The Research Incentive Scheme for Companies (RISC) encourages the development of research and development capabilities and technologies through the support of projects in the areas of science and technology.
2. The Training Grant for Company (TGC) encourages manpower capability development in applying new technologies, industrial skills and professional know-how through the support of training programmes for companies’ employees.
3. The Productivity Grant (PG) encourages firm-level projects which aim at improvements to energy, water, land or labour efficiencies through transformation efforts to enhance companies’ operations or involving adoption of technologies.
TAX INCENTIVES
1. The Pioneer Certificate Incentive (PC) and the Development and Expansion Incentive (DEI) aim to encourage companies to grow capabilities and conduct new or expanded economic activities in Singapore. Companies that carry out global or regional headquarters (HQ) activities of managing, coordinating and controlling business activities for a group of companies may also apply for the PC or DEI for the HQ activities. Corporations manufacturing approved products with high technological content or providing qualifying services may apply for tax exemption for five to 15 years for each qualifying project or activity under the pioneer tax incentive. Corporations may apply for their post-pioneer profits to be taxed at a reduced rate under the Development and Expansion Incentive
2. Under the Development and Expansion Incentive, corporations engaging in new high-value-added projects, expanding or upgrading their operations, or undertaking incremental activities after their pioneer period may apply for their profits to be taxed at a reduced rate of not less than 5% for an initial period of up to ten years. The total tax relief period for each qualifying project or activity is subject to a maximum of 40 years (inclusive of the post-pioneer relief period previously granted, if applicable).
3. the Intellectual Property Development Incentive (“IDI”) to encourage the use of intellectual property (“IP”) arising from research and development. Additionally, the scope of two existing incentives, namely the Pioneer Service Companies Incentive (“PC-S”) and the Development and Expansion Incentive (“DEI”) will be amended to exclude IP income.
4. The Finance and Treasury Centre (FTC) Incentive aims to encourage companies to grow treasury management capabilities and use Singapore as a base for conducting strategic finance and treasury management activities.
5. The Land Intensification Allowance (LIA) aims to promote the intensification of industrial land use towards more land-efficient and higher value-added activities.
6. The Aircraft Leasing Scheme (ALS) aims to encourage companies to develop aircraft leasing capabilities and grow the aircraft leasing industry in Singapore.
7. Investment allowance, a tax exemption is granted on an amount of profits based on a specified percentage (of up to 100%) of the capital expenditure incurred for qualifying projects or activities within a period of up to five years (up to eight years for assets acquired on hire-purchase). Capital expenditure incurred for productive equipment placed overseas on approved projects may likewise be granted integrated investment allowances. Investment allowances of 100% of capital expenditure (net of grants) may be granted to businesses seeking to make substantial investment in automation, subject to a cap of SGD 10 million per project.
8. Regional HQ Program - Company should provide corporate support and headquarters-related services and business expertise on regional basis; must meet stipulated requirements. Concessionary tax rate of 15% for up to 5 years.
9. International HQ Program - Company should provide corporate support and headquarters-related services and business expertise on global basis; must exceed stipulated requirements.Concessionary tax rate as low as 0% for up to 5 years.
(Source: Deloitte, EDB)
