Singapore Budget 2017 – Key summaries on Economic and Business Policies
In February 2017, the Government has announced actions to re-position the city-state, prepares itself for the Future Economy, and also building a sustainable employment with various policies supporting workers and employers alike.
In this piece – We summarize the key economic and business policies that have immediate near-term impact to Singapore SMEs and corporates.
Singapore has long been recognised as a future-ready city by global institutes. In the recent Budget, the government has stepped up its effort to ensure global competitiveness, to help its enterprises in digitalisation, innovation and scaling up. Below are a few key highlights:
A) Corporate Income Tax Rebate Enhancement: Current tax rebate remains, with the cap being raised to $25,000, from $20,000 prior, at 50% of tax payable. It would also be extended till YA2018, capped at $10,000. For a simple illustration on how corporate taxes are calculated, you could refer to our 2016 piece here.
B) SME Working Capital Loan: The current scheme continues for the next two years, whilst the Government co-shares 50% of risk for quantum up to $300,000 per SME.
C) SME Go-Digital: This is a brand new scheme announced in 2017, with the goal of fostering stronger digital capabilities among Singapore SMEs. Productivity tools such as digital order, fleet management, data protection and payment are encouraged. SME Centres would continue to provide in-person help on ICT solutions, with advice and funding support in piloting solutions.
D) International partnership Fund: This is also a brand new $600-million scheme in Government capital to co-invest with Singapore-based firm (see our business blog for Singapore business benefits, structures, taxes here), helping them with scaling up and internationalise.
Talent-Competitive & Business-Friendly Economy
INSEAD’s Global Talent Competitiveness Index (GTCI) for 2017 reiterated Singapore’s world-leading position in its ability to grow, attract and retain global talents. The Budget has seen new initiatives in global & regional leaders development, job placements for employees and facilitation of Tech experimentation & IP protection.
E) Special Employment Credit: The well-received scheme was introduced in 2011 and enhanced further in 2012 is extended through Dec 2019. It raises employability of older Singaporeans, which provides wage-offset to employers hiring workers aged 55 and above, offsetting up to 3%.
F) Regulatory Sandboxes: Cornell University, INSEAD and World Intellectual Property Organisation (WIPO) have previously recognized Singapore as the most innovative economy in Asia. In the New Budget, the Government gives further space where rules can be suspended for greater experimentation. For instance, the Monetary Authority of Singapore gives regulatory sandbox for FinTech industry. Self-driving vehicles are also tested in specified LTA zones.
G) Improved Access to Intellectual Property: The US Chamber of Commerce has named Singapore No.1 economy in Asia in protecting intellectual property in its 2016 IIP Index. Now through the IPI (Singapore Intellectual Property Intermediary), companies could be matched with IP that meets that needs with technological-based sourcing, assessment and matching. A*STAR (The Agency for Science, Technology and Research) is also co-developing IP with SMEs via the Headstart Programme, offering royalty-free and exclusive licenses for up to 3 years.
One of World’s Best Places to Do Business
It is with Singapore Government’s continued support to SMEs with various business-friendly policies, that the tiny city-state of 5.3-million population earns its reputation as the Top 3 easiest places to do business globally (See World Bank Rankings) in a consistent basis in the past decade. It came at no surprise that Singapore also ranks atop among surveys about favourable startup ecosystems, like this one by Compass Co.
Business policies, ease of access to talent and credit, coupled with low taxes are some of the top reasons business owners choose Singapore over its peers.
Should you wish to find out more about doing business in Singapore, feel free to check out Piloto Asia’s business blog here, or contact one of our friendly consultants on a tip or two to get you started.
Want to know more about the procedures for Singapore company setup and Singapore corporate tax rates versus OECD peers? Refer to our introductions below.