28 June 2010

                           

Media Release: NR/12/2010

 

Tax deduction scheme to encourage angel investment in start-ups

 

1.            A new source of entrepreneurial expertise would be available to help seed and nurture innovative start-ups, thanks to the new Angel Investors Tax Deduction Scheme.

 

2.            The scheme provides tax incentives to individuals with entrepreneurial and business expertise to bring their investments, expertise and networks to start-ups to help them grow.  This was announced in Budget 2010 in February.  SPRING Singapore will administer the scheme.

 

3.            Under the scheme, approved angel investors who make equity investments of at least $100,000 in eligible start-ups in a given year will qualify for a 50% tax deduction of the investment on their incomes.  To benefit from the scheme, the angel investor must demonstrate the ability to nurture investee companies, through his entrepreneurial or business experience.  He should also be prepared to contribute as a board member or an advisor to the start-up.

 

4.            The tax deduction would be given at the end of a two-year holding period and is subject to a cap of $500,000 of investments in each year of assessment.  The scheme is valid for investments made from 1 March 2010 to 31 March 2015.

 

5.            "Many start-ups begin with lean operations and find it difficult to engage business talent to help them develop the right strategies or connect to the right markets.  Angel investors play a critical role in bridging this gap by bringing along their business skills, industry expertise, and business contacts that are invaluable to help in the start-ups’ growth," said Mr Tan Kai Hoe, Deputy Chief Executive, SPRING Singapore. 

6.            There are more than 100 angel investors in Singapore today and they typically invest some $30,000 to $500,000 in promising start-ups.

 

7.            SPRING aims to catalyse some $600 million worth of angel investments in Singapore over the next five years, and increase the angels’ involvement in the start-up landscape through this scheme.

 

8.            The scheme is one of ESC’s recommendations and part of SPRING’s efforts to seed and nurture innovative start-ups.  It complements SPRING’s suite of capability development programmes which caters to various stages of enterprise growth.

 

9.            More information can be found at www.spring.gov.sg/aitd. Eligible angel investors can apply to SPRING from 1 July 2010.

 

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About SPRING Singapore

SPRING Singapore is the enterprise development agency for growing innovative companies and fostering a competitive SME sector. We work with partners to help enterprises in financing, capabilities and management development, technology and innovation, and access to markets. As the national standards and accreditation body, SPRING also develops and promotes internationally-recognised standards and quality assurance to enhance competitiveness and facilitate trade.

 

Please visit www.spring.gov.sg for more information and news about SPRING Singapore.

 

For media enquiries, please contact:

Marion Abraham

Senior Manager, Corporate Communications

SPRING Singapore

Direct: 6279 3617

E-mail: marion_abraham@spring.gov.sg