Budget 2018 for Startups
3 Takeaways from Budget 2018 for the Singapore Startup Ecosystem
The Singapore Budget 2018 has been announced by Finance Minister Heng Swee Keat on Monday (19 Feb). The Budget lays out the planned Government revenue and expenditure for the upcoming financial year, which begins on 1 April of the calendar year.
One of the key aims for Budget 2018 is to build a vibrant and innovative economy, by anchoring Singapore as a Global-Asia node of technology, innovation and enterprise, welcoming investments, talent and ideas to Singapore, and being bold in venturing out into new markets. ACE applauds this move towards a targeted approach aimed at encouraging innovation, Intellectual Property (IP) development, technology adoption, and supporting the growth and expansion of businesses, especially tech-focused startups.
There are various measures that will be of interest to startups announced in the Budget 2018 including tax changes and innovation-related expenditures. Here are key 3 takeaways from Budget 2018 for the startups:
1) Opportunities for Tech-Focused Startups
Adjustments to the Startup Tax Exemption Scheme (now limited to the first $200,000 of chargeable income and tax exemption on the first $100,000 of chargeable income reduced from 100% to 75%) will likely have minimal impact on tech-focused startups as many of them are not in a taxable position. Rather, the various schemes highlighted in the Budget 2018 would create opportunities for tech-focused startups, such as encouraging firms to co-innovate with partners through the PACT scheme, and increased tax deduction on licensing of IPs. The Enterprise Development Grant will also support more mature startups in their overseas expansion efforts.
2) Productivity Solutions Grant : Up to 70% funding support for the adoption of pre-scoped, off-the-shelf solutions to improve productivity
Digital transformation is crucial especially for traditional businesses to stay relevant and competitive in the changing environment. ACE has been conducting Digital Transformation Exchange to match businesses to ready solutions and we are hopeful that the Productivity Solutions Grant will encourage more of such businesses to adopt ready solutions, especially ready products provided by startups.
3) Open Innovation Platform: Virtual crowdsourcing platform matching companies with ICT firms and research institutes to co-develop solutions
We welcome the development of the Open Innovation Platform. This would encourage companies to take the first steps towards co-innovating with ICT firms and research institutes. However, it is also important to note that not many companies have in-house innovation talents to facilitate iterative innovation. It will be worthwhile to put in place programmes to train up innovation managers, and structured innovation programmes to facilitate such co-innovation activities.
We are also pleased to note that ACE 2018 key strategies highlighted earlier in January is aligned to Budget 2018 focus on vibrancy and innovation. Through our activities, we aim to build a connected hub for innovation, startups, enterprises and talents, and we aim to assist startups in overseas market access through the ACE International Centre launched in September 2017, while promoting Singapore as a regional innovation hub in driving sectoral and cross-border innovation.
We welcome the various measures highlighted in Budget 2018, and we are very optimistic that these measures will contribute to the building of a vibrant ecosystem.
Find out more on ACE Market Access Programme, Digital Transformation Exchange and Corporate-Startup Co-innovation programmes or contact us at firstname.lastname@example.org.