StartupSG Investor

Overview

The Startup SG Investor pillar highlights tax incentives for individuals or fund management companies that are actively investing in startups and/or other Singapore companies.

Angel Investors Tax Deduction (AITD)

The scheme is suitable for angel investors who can commit a minimum of $100,000 in a qualifying start-up. As an approved angel investor, you can enjoy a tax deduction of 50% of your investment at the end of a two-year holding period. For each Year of Assessment (YA), the eligible investments will be subject to a cap of $500,000, and the corresponding maximum tax deduction is $250,000. The tax deduction will only apply to qualified investments made after approval of your application. It does not apply retrospectively.

For more information on AITD, please visit https://spring.gov.sg/Nurturing-Startups/Pages/angel-investors-tax-deduction-scheme.aspx

S13H/FMI

Section 13H/Fund Management Incentive(S13H/FMI)

S13H is a tax incentive for approved venture capital and private equity funds, while the FMI for S13H approved funds is a tax incentive for fund management companies.

S13H allows an approved fund a zero-rated tax relief for a period of up to 10 years in respect of:

  1. Gains arising from the divestment of approved portfolio holdings and;
  2. Dividend income from approved foreign portfolio companies and;
  3. Interest income arising from approved foreign convertible loan stock.

FMI allows an approved fund management company a tax relief at a concessionary rate of 5% for a  period of up to 10 years in respect of:

  1. Management fees arrived from an approved venture capital fund and;
  2. Performance bonus received from the said approved venture capital fund.

To be eligible for S13H and FMI, the venture capital/private equity funds and fund management companies should fulfil the following conditions:

  1. The funds should be incorporated and based in Singapore and;
  2. The fund management companies should be incorporated and based in Singapore.

They should also have obtained the necessary approvals and licenses (e.g. Capital Markets Services License, Registered Fund Management Company) from the Monetary Authority of Singapore for their proposed activities.

Interested applicants of S13H and/or FMI may contact SPRING via smeinfoline@spring.gov.sg.