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What businesses need to know about the 2021 Singapore Budget
The Singapore Budget 2021 shifts gears from containing the Covid-19's spread to restructuring the economy by accelerating businesses' growth. The key areas are:
- innovation
- digitalisation
- internationalisation
- business and workforce development
- sustainability
Also, there was a slew of measures to upskill the Singapore workforce and create more job opportunities for everyone while building towards a more sustainable and energy-efficient country.
In this article, you'll learn the details of the Singapore Budget 2021, how you can benefit from the initiatives, and the resources to apply for grants.
Legend:
🏢 MNCs and LLEs
🏡 SMEs
💻 Startups
*Initiatives are designed for specific business size but not limited to other businesses where eligible.
Supporting the Covid-19 recovery
The Government's COVID-19 Resilience Package is an $11 billion investment for those worst affected by the downturn. The funding — used strategically to invest in technology and training for the workforce and businesses — will help enterprises reposition themselves in the post-pandemic era.
🏢 🏡 💻 The Enterprise Financing Scheme – Trade Loan (EFS-TL): extended for another 6 months (until 30 September 2021). The maximum loan quantum remains at $10 million however the Government risk-share loans were lowered to 70% (previous 90%).
🏢 🏡 💻 The Enterprise Financing Scheme – Project Loan (EFS-PL): extended until 31 March 2022. The maximum loan quantum for domestic projects is $30 million and the Government’s risk-share of loans is up to 70%
🏢 🏡 💻 Temporary Bridging Loan Programme (TBL): extended for another 6 months ( until 30 September 2021). The maximum loan quantum: 1) $5 million until 31 March 2021, 2) $3 million from 1 April - 30 September 2021. The Government’s risk-share of loans: 1) 90% until 31 March 2021, 2) 70% from 1 April - 30 September 2021.
🏢 🏡 💻 Jobs Support Scheme (JSS): Extended to businesses in Tier 1 and 2 sectors by up to 6 months (up to September 2021). Tier 1 Sectors (Aviation, Aerospace, and Tourism) will receive 30% support for wages paid from April to June 2021 and 10% from July to September 2021. Tier 2 Sectors (e.g. Food Services, Retail, Marine & Offshore, and Arts and Entertainment) will receive 10% support for salaries paid from April to June 2021. Tier 3A Sectors will continue to receive 10% of wages paid until March 2021.
Tip: Not sure you’re in which tier? Find out here.
🏡 💻 The $285-million Special Situation Fund for Startups (SSFS) is set aside to invest in selected private startups to sustain their innovation and entrepreneurship activities during the pandemic. The support ends when the funds are fully committed or by 31 October 2021, whichever earlier.
🏢 🏡 💻 Foreign Worker Levy (FWL) Rebate provides FWL rebates ($90 per work permit holder) from October 2020 to December 2021 for businesses in the Construction, Marine Shipyard, and Process (CMP) sectors.
Focusing on seizing opportunities
The Government is taking steps to encourage the adoption of digital technologies, create new sources of capital for local enterprises, and enhance our tax system. These changes will help Singapore best position itself in a post-COVID-19 world.
As Prime Minister, Mr Lee Hsien Loong said, “When the sun shines again, we must be ready to seize the new opportunities.”
1) Seizing opportunities from regional and global markets
🏢 🏡 💻 NEW: A*STAR Partner’s Centre @ Suzhou Industrial Park (SIP)
Regional-ready Singapore enterprises can tap into the A*STAR Partner's Centre at Suzhou Industrial Park (SIP) to build R&D competencies and co-develop technologies focusing on biomedical sciences and nanotech, and advanced manufacturing.
This collaboration helps companies accelerate their R&D and innovation pace by leveraging A* PC's scientific expertise, capabilities, and facilities.
🏢 🏡 NEW: Southeast Asia Manufacturing Alliance (SMA)
Consisting of the Economic Development Board (EDB), Enterprise Singapore (ESG) and private sectors, SMA seeks to promote a network of industrial parks to manufacturers interested to invest in Singapore and Southeast Asia.
Some of the benefits the eligible companies can apply are:
- Supplier identification and matching service
- Differentiated tier of pricing for logistics
- Facilitation and support for Industry 4.0 pilot implementation programmes with Singapore solution providers
- Support eligible innovation activities in Singapore
🏢 🏡 Double Tax Deduction for Internationalisation (DTDi)
The DTDi allows companies expanding overseas to claim a 200% tax reduction for qualifying market expansion and investment development expenses. This is to boost international expansion for Singapore companies.
The deductions are subject to Enterprise Singapore’s or the Singapore Tourism Board's approval. Currently, no prior approval is required on the first $150,000 of qualifying expenses incurred on automatic DTDi activities. These activities include participation in overseas market development trips, overseas investment study trips, and trade fairs (local and abroad).
🏢 🏡 💻 The Global Innovation Alliance (GIA)
The alliance gives businesses access to overseas partners for co-innovation and market expansion. Phase 2 will scale up its network and expand the scope to include Enterprise Singapore’s co-innovation programmes (CIPs) — cross-border platforms that connect Singapore-based enterprises with overseas partners.
🏡 Market Readiness Assistance (MRA)
MRA provides in-depth FTA consultancy and support for overseas business development. The premium subsidy covers up to 80% of qualifying costs when taking up trade credit insurance (until 31 March 2022).
They provide market advisory services and trusted in-market business connections for businesses looking to expand in Southeast Asia and other markets.
2) Accelerating the digital transformation
From 2021 onwards, Singapore will focus on growing and accelerating technology, specifically in automation, 5G, artificial intelligence (AI), trust technologies, and e-payments.
Businesses can also get support from the Government to uplevel their skills and capabilities essential for the future workplace.
🏡 100% Investment Allowance
For SMEs looking to embark on large-scale automation projects, they can apply for the 100% Investment Allowance for another 2 years until 31 March 2023. The allowance will be provided on the amount of approved capital expenditure, net of any grants received for the same qualifying expenditure.
Who is eligible: Projects that have received the Enterprise Development Grant under the Productivity and Innovation thrust (subject to conditions).
🏢 🏡 💻 Enterprise Development Grant (EDG)
EDG provides support in 3 key areas: core capabilities, innovation and productivity, and internationalisation. EDG has been enhanced to cover up to 80% of qualifying costs and extended until 31 March 2022. Unionised enterprises and Employment and Employability Institute (e2i) partners under the Labour Movement can qualify for an additional 10% funding, subject to NTUC-e2i’s endorsement. Apply here.
🏡 💻 NEW: Emerging Technology Programme
As more and more companies are shifting to hybrid teams (on-site and remote work), online collaboration and remote working technologies became a must-have. In this new business model, 5G and AI applications are fundamental to enhance productivity and provide capacity for the rapid expansion of digital adoption.
By focusing on developing and adopting AI, 5G and trust technologies, Singapore’s enterprises are prepared for the next technology evolution phase.
🏢 🏡 💻 Industry Digital Plans
The Singapore Government provides sector-specific step-by-step guides on relevant digital solutions for SMEs to adopt (including employee training). SMEs that adopt the Industry Digital Plans can also receive funding support from Productivity Solutions Grant (PSG).
🏡 💻 Productivity Solutions Grant (PSG)
PSG provides a wide range of pre-scoped solutions, including IT solutions, equipment, and consultancy services. PSG has been enhanced to cover up to 80% of qualifying costs and extended until 31 March 2022.
Visit GoBusiness Gov Assist to access the list of supportable solutions and identify relevant solutions that best suit your business needs.
A whole slew of support is available under the SMEs Go Digital Programme to help businesses build digital capabilities.
- Start Digital Pack: Perfect for SMEs looking to enter the digital economy. A simple Accounting, HR Management System & Payroll, Digital Marketing, Digital Transactions, Digital Collaboration and Cybersecurity solutions. A 6-month subscription fee waive is available for any 2 solutions within a minimum 18-month contract.
- Grow Digital: For SMEs planning to get a headstart in going global. Provides digital platforms and channels to larger international customer pools, training and support to enhance e-commerce models.
- Advanced Digital Solutions: Up to 80% of funding support is given to adopting advanced digital solutions.
- NEW: CTO-as-a-Service: Provides fresh perspectives for SMEs to identify their digitalisation needs and transform their operations through professional IT consultancies.
- Digital Resilience Bonus: Additional support for enterprises to boost their digital capacity. Up to $5,000 bonus for F&B that adopt PayNow Corporate, InvoiceNow, and business process or e-commerce solutions between 1 June 2020 to 30 June 2021. Additional $5,000 bonus for businesses that adopt data mining and analytics solutions.
Paving a sustainable future
Several energy-efficiency and green technology adoption schemes will be extended or rolled out to ensure sustainable growth.
Energy Efficiency
In the energy efficiency area, 🏡 Energy Efficiency Fund (E2F) and 🏢 Resource Efficiency Grant for Energy (REG(E)) provide funds and support to industrial facilities, power generation companies, and manufacturing companies and data centres, respectively, to invest in energy efficiency tech. Up to 50% of grant support of qualifying costs are available.
🏢 🏡 3R Fund
Eligible companies that want to reduce waste disposal at NEA’s incineration plants and disposal facilities can apply up to 80% grant of qualifying costs, subject to a cap of $1 million per project or per applicant.
Who is eligible? Projects that have increased recycled solid waste (excluding toxic and chemical waste) or less solid waste generated are eligible. The minimum tonnage is 100 tonnes reduced, reused, or recycled.
🏢 🏡 Investment Allowance - Emissions Reduction (IA-ER)
The current Investment Allowance - Energy Efficiency (IA-EE) will now be known as Investment Allowance - Emissions Reduction (IA-ER). It supports manufacturing companies and data centres to improve energy efficiency or reduce greenhouse gas emissions (either one).
IA-ER is now enhanced to cover both energy efficiency and reduction of greenhouse gas emissions and will apply from 1 April 2021 to 31 December 2026.
Boosting innovation
With the right talent, network, and partnerships, businesses can accelerate their innovation efforts.
The Government’s effort in boosting innovation focuses on giving businesses access to people worldwide. Some of the schemes that will open the floodgates of innovation opportunities are:
- 🏢 🏡 A*STAR Collaborative Commerce Marketplace (ACCM): An online platform to find partners, solutions, and network.
- 🏢 🏡 💻 Innovation Advisors Programme (formerly known as Innovation Agents Programme): Mentors will guide businesses in developing innovation strategies, new products, and connecting businesses to other partners.
- 🏢 🏡 💻 IPI Singapore: An online marketplace and consultancy to connect with technology IP providers and demand-led innovation opportunities.
- 🏢 🏡 💻 National Innovation Challenges (NIC): Forms partnerships with sector leaders to address national and industry-wide challenges.
- 🏢 🏡 💻 Open Innovation Network (OIN): A gateway to learn more about open innovation challenges, news, and resources and find new innovation opportunities.
- 🏢 🏡 Open Innovation Platform (OIP): An online platform to connect businesses with tech solvers worldwide to address business challenges.
- 🏢 🏡 Technology for Enterprise Capability Upgrading (T-Up) Programme: Get access to talent from A*STAR’s research institutes for up to 2 years. ESG covers up to 70% of secondment costs.
- 🏢 🏡 💻 Digital Services Lab: Partner with IMDA, tech providers, and research institutions to co-develop digital solutions.
- 🏡 💻Tech Access: Access a wide range of A*STAR/s advanced manufacturing equipment and biotech and biomedical services (guided by technical experts).
There are also several schemes to support businesses in developing and testing new tech solutions.
- 🏡 💻 Centres of Innovation (COIs) support developing and testing new technology products through technical consultancy services, access to speciality equipment, and IP translation services.
- 🏢 🏡 Operation and Technology Roadmap (OTR) supports companies in mapping their current and emerging technology needs. Those who work with A*STAR to develop their OTRs are eligible for a grant from ESG (up to 70% of qualifying costs).
Good news for startups! You can get a wide range of support, including training, physical space, talents, and fundings under the 🏡 Startup SG initiatives.
- Startup SG Equity: Stimulates private sector investments into Singapore-based technology startups with global market potential and sound intellectual property.
- Startup SG Founder “Start” Track: Mentors and provides capital grants to first-time entrepreneurs with innovative business ideas. Successful applicants will also get a $50,000 grant from ESG. Startups are required to raise and commit S$10,000 as a co-matching fund to the grant.
- Startup SG Founder “Train” Track: Venture Builder and Accredited Mentor Partners (with track records) provide 3-month Venture Building programmes for local entrepreneurs.
- Startup SG Infrastructure: Provides physical spaces like LaunchPad @ one-north for startups to grow.
- Startup SG Talent: Support startups’ talent needs.
- Startup SG Tech: Provides funding to carry out Proof-of-Concept and Proof-of-Value projects for proprietary innovative technologies.
Although more details have yet to be released, entrepreneurs are anticipating the new Corporate Venture Launchpad. Through this launchpad, the Government aims to co-fund companies that build businesses by working with pre-qualified venture studios that bring a wide range of skills and expertise to the table.
Investing in people and upskilling
The heart of a country is, without a doubt, its citizens. Recognizing the importance of people, the Government has enhanced and developed new initiatives to upskill workers to remain relevant to the industrial revolution.
One of the widest umbrellas is the SGUnited Jobs and Skills Package. The package aims to expand job, traineeship, and skills training opportunities for all Singaporeans. In turn, workers will acquire job-related skills and capabilities and access expanded employment opportunities.
Some of the initiatives parked under the SGUnited Jobs and Skills Package are:
- 🏢 🏡 💻 Jobs Growth Incentive (JGI): Encourage and support businesses to hire local jobseekers. Businesses will get 25% support (or 50% for local hires aged 40 and above, people with disabilities, or ex-offenders) of the first $5,000 gross monthly wages. The qualifying window for new local hires will be:
- Phase 1: September 2020 - February 2021
- Phase 2: March 2021 - September 2021
- 🏢 🏡 💻 Career Conversion Programmes: Reskill mid-career local jobseekers and help them make career transitions. Employers may receive course fee funding and salary support of up to 90% during the reskilling period.
- 🏢 🏡 💻 Enhanced Training Support Package: Employers in sectors directly affected by Covid-19 who sponsor their workers for eligible courses will get enhanced time-limited course fee subsidies and absentee payroll (AP) rates.
- 🏢 🏡 💻 SGUnited Jobs – HR Programme Manager Initiative (HRPM): Coordinated by The Singapore Business Federation (SBF), HRPM facilities B2B matching to make job matching process more proactive through company-to-company brokering.
- 🏢 🏡 💻 SGUnited Traineeships (SGUT): Provides traineeship opportunities for fresh graduates and soon-to-be-graduates.
- 🏢 🏡 💻 SGUnited Mid-Career Pathways Programmes (SGUP): Supports mid-career individuals to widen their professional network and gain new in-demand skills while preparing for long-term jobs.
- 🏢 🏡 💻 TechSkills Accelerator (TeSA): Support ICT and non-ICT professionals to upgrade and acquire new and in-demand skills and domain knowledge. TeSA’s Company-Led Training Programme has been enhanced to provide more support for hiring businesses. The Mid-Career Advance Programme will train mature professionals, managers, executives, and technicians (PMETs) aged 40 and above.
Another wide umbrella that complements the SGUnited Jobs and Skills Package is the SkillsFuture series.
This series offers short, industry-relevant training programmes in emerging and priority areas, such as data analytics, finance, tech-enabled services, digital media, cybersecurity, entrepreneurship, advanced manufacturing, and urban solutions. Some of the initiatives parked under the SkillsFuture series are:
- 🏢 🏡 💻 Skills Framework: Provides key information on sector, career pathways, job roles, and existing and emerging skills needed. It also provides training programmes for skill upgrading and mastery.
- 🏡 SkillsFuture JumpStart! Workshop: Businesses can learn about available jobs and skills, resources and grants available through this workshop.
- 🏡 SkillsFuture Queen Bee (SFQB): SMEs can participate in SFQB-curated training programmes to build industry-relevant skills for their workers. SMEs can also access a skills-support ecosystem that helps them identify their skills needs.
- 🏢 🏡 💻 SkillsFuture Work-Study Programmes: Businesses can start grooming talents even before they graduate through this programme. It covers across Certificate, Diploma, Post-Diploma, and Degree levels.
- 🏢 🏡 💻 SkillsFuture Leadership Development Initiatives: Businesses can work with respective government agencies to develop and enhance their in-house leadership development programmes.
The Government aims to be as inclusive as possible by offering equal opportunities to all, including people with disabilities. We often see their disabilities first and overlook their skills and expertise that could drive the company’s and country’s growth.
Employers who are looking to employ people with disabilities can benefit from the support below:
- 🏢 🏡 💻 Enabling Employment Credit (EEC): Employers who employ people with disabilities aged 13 and above and earning $4,000 below a month are eligible to get a wage offset up to 20% capped at $400 per month. Also, employers who hired people with disabilities who had not been working for the past 6 months receive an additional 10% wage offset, capped at $200 per month, for the first 6 months of employment.
- 🏢 🏡 💻 Open Door Programme: Supports employers to hire, train and integrate people with disabilities into the workforce through recruitment, job support services, training grant, and Job Redesign Grant.
- 🏢 🏡 💻 SGUnited Jobs and Skills Schemes for Persons with Disabilities: Provides more access to employment and training opportunities for people with disabilities. It also reduces the cost for employers, host companies, and training providers offering these opportunities to people with disabilities.
Other jobs and skills support:
- 🏢 🏡 💻 Capability Transfer Programme has been extended to provide funds for businesses to:
- Bring foreign specialists into Singapore to train their local workers.
- Send local trainees for overseas training.
- Support local specialists (previously trained by foreign specialists) training other local workers.
- 🏢 🏡 💻 Career Trial allows employers and jobseekers to assess job fit through a short-term trial. Employers receive salary support if they offer full-time employment paying at least $1,500 or $750 for part-time at the end of the trial.
- 🏢 🏡 💻 Lean Enterprise Development Scheme helps progressive enterprises transform and grow while businesses look for staffing support. Businesses can have temporary foreign workers while recruiting and training locals or pool foreign expertise to transfer know-how to your local workers.
Developing and growing businesses
The Government is ready to offer all the support and training businesses need to grow amid the pandemic and keep up with the economy's growing demands.
Some of the support businesses can tap on are:
- 🏢 🏡 💻 Enterprise Financing Scheme (EFS) supports business’s financing needs in 6 areas: working capital, fixed assets, venture debt, trade, projects, and mergers & acquisitions. Young businesses can get stronger support from EFS (including EFS-TL and EFS-PL)
- 🏡 Enterprise Leadership for Transformation (ELT) consists of a network of Institutes of Higher Learning (IHLs), financial institutions and industry experts who train and coach businesses in business growth capabilities and planning.
- 🏡 Executive-in-Residence (EIR) engages trade associations and chambers (TACs) with relevant professionals to assist in transformation, capability building and internationalisation efforts.
- 🏢 🏡 💻 GoBusiness Gov Assist e-Adviser makes it easy for businesses to look for all available assistance schemes under one platform.
- 🏡 💻 National Centre of Excellence for Workplace Learning (NACE) helps companies develop their in-house training programmes and certify workplace trainers.
- 🏢 🏡 PACT Programme encourages mutually beneficial partnerships between companies to build and innovate new technologies and opportunities. SMEs can get funding up to 70% of qualifying costs and non-SMEs get up to 50%.
- 🏢 🏡 Scale-Up SG is a 12 to 18-month programme to help selected high-growth local companies scale effectively through peer learning, leadership team development, and access to expertise and network. The support has been expanded to cover up to 80% of qualifying costs and extended until 31 March 2022.
- 🏡 💻 SME Centres provide business diagnosis and advisory services, capability workshops, and group-based upgrading projects.
- 🏡 💻 Support for Job Redesign under Productivity Solutions Grant (PSG) connects businesses with job redesign consultants to redesign work processes, tasks, duties, and responsibilities. This has been extended to 31 March 2022 and offers up to 80% of funding support for businesses, capped at $30,000 per company.
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