February 2019

Singapore is recognized as one of the most ideal places for business in the world. Apart from its modern and highly-developed infrastructure, skilled and motivated workforce, political stability, and open business policies, this city-state also provides numerous grants to small and medium-sized enterprises (SMEs).

The government of Singapore offers more than twenty grants to companies operating in their country. These grants are in the form of cash grants, equity financing, business loans, and tax incentive schemes, among others.

Below are some of the top grants that SMEs can tap to upgrade their capabilities, improve their productivity level and competitiveness, and to further expand their businesses:

Enterprise Development Grant (EDG)

The Enterprise Development Grant (EDG) is meant to assist businesses in their efforts to innovate, upgrade, or expand their ventures overseas. Specifically, the EDG supports companies in the following areas:

• Strengthening of business foundations
• Enhancing business efficiency and exploring new areas of growth
• Boosting access to the international market

To be eligible for EDG, the business should be registered and operating in the city-state, have at least thirty percent local shareholding, and must be financially stable enough to begin and bring the project to completion.

For business ventures that qualify under this grant, the company can enjoy funding support of up to 70 percent of the project costs, particularly expenses for software and equipment, manpower, and third-party consultancy fees.

Productivity Solutions Grant (PSG)

The Productivity Solutions Grant (PSG) can be utilized by businesses intending to use IT solutions and equipment to boost their productivity and improve their processes. Note that the PSG provide a maximum of 70 percent funding support for sector-specific solutions such as the following:

• Food
• Retail
• Logistics
• Precision engineering
• Construction
• Landscaping industries

To be eligible for PSG, the small or medium-sized enterprise should be registered and operating in Singapore with at least thirty percent local shareholding. In addition, the purchase or lease of the IT solutions or equipment must be utilized in Singapore as well.

Market Readiness Assistance (MRA) Grant

The Market Readiness Assistance (MRA) Grant is intended for SMEs that are keen on bringing their business on the international level. MRA grantees will receive as much as 70 percent funding support that covers expenses incurred in the following activities:

• Market set-up overseas
• Identification of potential business partners and customers
• Marketing and promotional activities overseas

To be eligible for MRA grant, the business should be incorporated or registered in Singapore, the company should have the minimum thirty percent local shareholdings, and the company’s employment size should not exceed 200 workers or the company’s annual sales turnover should not exceed 100 million Singapore dollars.

Enhanced PACT

The initial PACT was implemented to improve partnerships between multinational companies and local SMEs but since 01 April 2018, the PACT has been enhanced and extended to cover collaborations among all businesses of all sizes. This means that SME companies can now work with one another to innovate, grow their businesses and have the chance to seek funding.

Collaboration under the PACT scheme shall comprise of a Lead Enterprise tasked to lead the projects that would be advantageous to all partner companies. Some of these projects include capacity building or technology upgrade as well as the setting-up of alliances and consortiums for partners to share services and resources. PACT provides a maximum of 70 percent funding for SMEs and up to 50 percent for non-SMEs.

To qualify as a Lead Enterprise in the PACT scheme, the business must be registered as a local company in Singapore or as a Singapore office for multinational companies. Both foreign and local business, on the other hand, can become participating companies under PACT but local projects are given priority.

Venture Debt Programme (VDP)

Due to financial challenges faced by SMEs, the Venture Debt Programme (VDP) was created to provide an additional financing option for companies with high-growth potential. Under the VDP, Singaporean SMEs now have the chance to expand their businesses since they can secure loans of up to 5 million Singapore dollars. The loan can be used for working capital, asset financing, project financing, as well as for mergers and acquisitions.

To be eligible for the loan, SMEs should be registered and operating in Singapore, must have a minimum of thirty percent local shareholding, and their group annual sales should not exceed 100 million Singapore dollars or employment size should be up to 200 personnel only.

If you are planning to start a business venture in Singapore, you can be assured that you will get the support you need in the forms of grants and incentives, among others. The grants discussed above are just some of the tangible assistance given by the government to SMEs to ensure that new business owners like you will have a chance to compete, thrive, and grow. More than any countries in Asia, the government of Singapore truly recognizes the SMEs important contribution in boosting the economy.

To read more about grants for SME under Singapore Israel Industrial Research and Development Foundation (SIIRD), click here.

For businesses to thrive, expand, and succeed, it should continuously innovate and spend serious efforts in its research and development. As business productivity rises, not only the company benefits but the economy of the country also grows.

The government of Singapore fully recognizes the value of innovation as it allocates a sizeable amount of the budget for this purpose. Singapore-based companies are provided grants and incentives to aggressively pursue their research and development efforts including building R& D partnerships.

Research and development partnerships offer numerous benefits. It gives the entity access to resources and know-how that would not have been available otherwise. It also helps expedite the creation phase, thereby, making the new products or systems available to the market much faster. R&D collaboration also gives parties a competitive edge and access to new markets, among others.

Given the many benefits of research and development partnerships and the incentives given by the Singapore government to companies keen on collaborating with other firms across the world, the only thing that Singapore companies need to focus on is finding the perfect country to conduct R&D in. Which country would be more suitable than Israel – one of the leading countries in the world for research and development?

Why Choose Israel for R&D?

Israel is a young and small nation with very few natural resources. Early Israelis have faced numerous adversities and hardships which helped in producing a nation of thinkers, problem solvers, and innovators. Thanks to this innovative spirit and commitment to finding solutions to make their lives better, Israel is now one of the most robust and technologically advanced economies in the world.

For Singapore companies searching for the best country to carry out research and development, here are the top reasons why they should consider choosing Israel for R&D partnership:

Commitment to R&D

Israel’s commitment to research and development is unquestioned. In 2018 alone, the country spent 4.2 percent of its Gross Domestic Product (GDP) on research and development — the second highest spending on R&D in the world by percentage.

Israel’s higher education system is also invested in training scientists and engineers. The government is also implementing different mechanisms to ensure the transfer of knowledge and to encourage partnerships between academic researchers and other members of the economy. The goal of universities is not only to produce graduates but for students to produce quality academic research and intellectual property.

Israel’s strong commitment to R&D is reflected on the remarkable growth of its high-tech sector, the number of its foreign-funded investments, and the achievements and accolades it has received, including the following:

• One of the top 10 countries in the 2018 Bloomberg Innovation Index outperforming the United States
• Ranked first in the world in terms of number of researchers per million population
• Ranked first in the world in terms of number of engineers per capita
• Ranked third in the world in terms of the quality of scientific research institutes
• Ranked third in the world in terms of corporate spending on research and development
• One of the highest in the world in terms of per capita rates of filed patents

 Dynamic R&D Industry

 Israel houses more than 320 R&D Centres, most of which are operated by the world’s leading players in the high-tech industry such as Google, Apple, Intel, Microsoft, HP, and eBay. As of 2018, multinational companies do about 50% of Israel’s civilian R&D, dealing largely with the most cutting-age technologies, according to The Times of Israel.

Considering the importance given to research and development by multinational companies in Israel, the productivity rates of these businesses are much higher even when compared to other developed countries like Germany, France, and England. Given this trend, Singapore companies can be assured of the same positive results if they partner with Israeli companies for their R&D activities.

 Access to Incentives and Benefits

 The government of Israel offers incentives, benefits, and even funding to encourage collaboration on research and development projects with other countries. Singapore companies keen on collaborating with Israeli companies on R&D can access grants, enjoy certain privileges, and be assured of the overall support of the Israeli government.

 Producer of World’s Top Innovations

 Ultimately, the reputation of Israel in the field of research and development can be clearly seen in their contributions to the world. Here are some of the inventions and developments that the world owes to Israel:

• USB Flash Drive
• Wide Format Printing Ink
• Waze – A GPS-based social network mobile app used for navigation
• Iron dome – a mobile all-weather air defense system
• Unmanned aerial vehicle
• PillCam – pioneering solution that features a small camera inside a capsule for an endoscopy procedure
• Portable operation room
• Solar water heating – the use of solar power to heat water
• Water desalination
• Mobileye – vision technology for autonomous driving
• Computerized irrigation system

Given the reasons mentioned above, coupled with Israel’s innovative culture as well as a stable and dynamic economy, it is evident that this country is ideal in carrying out various research and development efforts. Singapore-based companies from various fields and industries can benefit greatly if they partner with Israeli companies in their innovation and R&D efforts.

Though seemingly far apart, Israel and Singapore are “old friends” with a long history of diplomatic and commercial relations. The Singapore-Israel Chamber of Commerce commenced operation in 1990 and the Singapore-Israel Industrial Research and Development Foundation (SIIRD) was established in 1997 to promote R&D collaborations between Singapore and Israeli commercial companies.

The success of the SIIRD programme allowed it to expand beyond the commercial—Israeli companies can now work with non-commercial R&D entities and research institutes in Singapore. Joint Singapore-Israeli ventures can be provided research grants of up to US$1 million by SIIRD.

The close ties and collaborations could have been fostered by similarity. In a joint press conference with Lee Hsien Loong in 2017, Israeli Prime Minister Benjamin Netanyahu said that Israel and Singapore are “kindred spirits”, as both were “small nations that have become in many areas global powers”.

This article will further discuss the effectiveness of collaborative R&D between Israeli and Singapore, and how it would contribute to the two countries’ success.

Israel and Singapore Partnership in Research and Development

Israel ranks second in the world in terms of innovation and availability of venture capital according to the World Economic Forum. The country is known for spending a large percentage (about 4.23%) of their gross domestic product on research and development (R&D) compared with more developed countries like the United States (at 2.79%) and even the European Union (at 1.95%).

Singapore also prioritizes R&D as the country realizes its importance in renewing industries, opening new markets, and increasing productivity, particularly the small and medium enterprises. Recently, the government of Singapore allocated a record budget of 19 billion Singapore dollars to fund research, innovation and enterprise activities in the country until 2020.

Considering how important research and development is to both Israel and Singapore, an R&D partnership between the two can only result in positive things. To date, there is existing formal cooperation between the Israel Innovation Authority and the Singapore Economic Development Board to promote, facilitate, and support collaborative efforts on research and development between companies based in Israel and Singapore.  The partnership also aims to provide research funding for small and medium-sized enterprises.

The current collaboration on research and development between Israeli-based and Singapore-based companies is expected to produce the following benefits:

• Access to knowledge, techniques, skills, and facilities

Every company, including Israel-based and Singapore-based companies, have weaknesses and limitations. These inadequacies can hamper the development of advanced technology and products if the company would carry out the project on their own.

The environment is significantly changed, however, when companies from Singapore and Israel work on a project together since they can share and have access to knowledge, techniques, skills, and facilities that they never have before. As discussed above, each country has something to offer considering the investments they put in on research and development. Thus, given the availability of resources, the companies are poised to create advanced products and technology the world has yet to see.

• Creation of innovative breakthroughs to address issues in existing technology

One of the major advantages of the research and development collaboration between Israeli and Singapore companies is that it helps find solutions to problems in current technology through the creation of ground-breaking projects. The making of such revolutionary projects can only be realized by combining the technological expertise and knowledge of the companies from both countries.

One R&D project that received funding focuses on the development of scents and sensations for inclusion in games and entertainment. An Israeli start-up company involved in digital scent technology and Singapore company from the semiconductor industry teamed up to create an affordable miniature digital scent module that can be mass produced.

The digital scent module would then be integrated into mobile gaming devices, home theatre systems, computers, and similar devices. Through this innovation, users can enjoy a truly realistic/4-dimensional entertainment experience in the comfort of home.

• Creation of new products that significantly help people

While the projects to be created through the collaboration of Israel and Singapore-based companies are primarily intended to increase profit and grow the business of the companies involved, many of the products are expected to directly improve the lives of people from all over the world. For instance, one of the projects that received funding aimed to create a skin cream that would address radiation dermatitis, a skin problem caused by undergoing radiation therapy.

The team of Israeli leaders in skin treatment and a biotechnology firm in Singapore are working on the creation of the topical cream. Once the team has successfully created the skin cream, it would greatly help cancer patients from all over the world find relief from radiation dermatitis.

Another approved project, a cyberbullying detection mobile application, aims to assist parent and their children against cyberbullying. This app would have features that will update parents if their children are experiencing cyberbullying. Essentially, this technology could help parents to immediately take counter-measures so that their children would not be harmed further.

• Boost economic progress and development

One of the major factors in realizing sustainable economic growth is the development of industrial technology that will make business and operational processes more effective and efficient. Through the R&D collaboration of Singapore and Israeli-based companies, technological advancements and enhanced products can be developed and enjoyed by the market much faster. Consequently, it allows both countries to tap the hidden talents and strengths of their people which can also fuel economic growth.

• Build trust and confidence between countries

The collaboration between Israeli and Singapore companies in the area of research and development can also foster trust and cooperation between countries. While Singapore and Israel have amicable relationships now, that does not mean that it will never change. Should conflicts and tension arise in the future, the players involved in the joint R&D collaboration can be useful in restoring trust and confidence between the two nations.

Considering the items mentioned above, it is clear that the partnership between Israeli and Singapore-based companies on research and development projects will yield benefits beyond the companies and countries involved. The results of their collaboration will also positively impact people from across the world as they can use the end-products and discoveries of the Israel-Singapore collaboration.

Singapore may be a small country in Southeast Asia, but it is one of the wealthiest and most advanced nations in the world in terms of education, entertainment, technology, tourism, healthcare, transport, trade, and finance. This city-state has a lot to offer, especially to business leaders and investors who are looking for an ideal location to expand their business to this region.

Ranked by The Economist Intelligence Unit as the world’s most investor-friendly location from 2009 to 2018, Singapore has attracted multinational companies from various parts of the globe to set-up their headquarters in the Lion City with the hope of successfully establishing their mark in the global arena. Owners of Israeli companies, who intend to expand their business, should consider setting up a presence in Singapore or building partnerships with Singapore for the following reasons:

Starting a Business is a Breeze

In the Doing Business data by the World Bank in 2017, Singapore has been ranked as the second-best country to do business in the world. As long as the necessary documents are completed, it only takes a day for any business owner, local or foreigner, to start a company and operate in this state city.

Singapore’s business application process is much faster even when compared with many countries that are known internationally as business hubs. In addition to an already simple and efficient system, Singapore also offers an online application scheme wherein businesses can readily apply and submit documents through the Internet.

Remarkable Talent Pool

Singapore provides a strong, talented, multi-cultural, and highly educated workforce. Their universities and polytechnic colleges have produced and are continuously producing highly-skilled graduates of engineers and other professionals every year. Note that this city-state ranked first in the world in terms of Human Capital Index in 2018 as reported by the World Bank.

Apart from having access to Singapore’s local talent pool, Israeli companies also have the advantage of sourcing their manpower from people of different nationalities and expertise when they choose to do business here thanks to Singapore’s open immigration policy. Given that English is the main working language in the country, foreign companies can easily operate because barriers to communication would be practically non-existent.

Business-Friendly Environment

Given Singapore’s history and current environment, the country offers businesses the best of the Asian and Western worlds. Even though the city-state is in Southeast Asia, Israeli firms can readily adjust to their business climate. Since Singapore used to be under British rule, its financial structure is highly similar to what is existing in the United Kingdom and the United States.

Singapore has consistently received praises from internationally recognized economic institutions and organizations because of its favourable business condition. Such a business-friendly environment can help Israeli companies thrive and reach their fullest potential. Some of the most notable accolades obtained by the Lion City proving its worth as a prominent business centre in Asia include the following:

• Ranked first in the Asia Pacific and the world in terms of Business Environment by The Economist Intelligence Unit
• Ranked first in the world in the Human Capital Index 2018 by the World Bank
• Ranked first in Asia in the Rule of Law Index 2018 by the World Justice Project
• Ranked second in the world in the Economic Freedom Index 2018 by the Heritage Foundation
• Ranked second in the world for Global Competitiveness by the World Economic Forum
• Ranked third in the world in the IMD World Competitiveness Yearbook 2018
• Ranked 6^th in the world for having the least corrupt economy in 2017 as measured by the Transparency International

Strategic Location and Remarkable Logistics Infrastructure

Position-wise, Singapore is at the advantage as it is in the centre of Southeast Asia and relatively close to several promising markets in the region. Israeli-owned businesses in Singapore can readily reach their target countries in Asia whether by land, air or sea.

Note that over a hundred airline carriers traveling to more than 300 cities and 80 countries are being served by Singapore’s Changi International Airport. Despite the airport’s heavy load, it has managed to maintain its standing as the best airport in the world which is a testament to Singapore’s commitment to be a global leader.

Israeli companies that rely heavily on maritime trade will undoubtedly prosper in this city-state. The port of Singapore is ranked as the leading maritime capital of the world as well as the second-busiest port in the world with regard to total shipping tonnage.

Attractive Business Incentives

Unlike other countries that try to attract foreign investments but are still making business owners jump through hoops, Singapore is promoting foreign multinational companies to set-up their regional headquarters in the country by offering numerous incentives.

Israeli companies based in Singapore also have the opportunity to take advantage of the country’s network of numerous Double Taxation Avoidance Agreements as well as Singapore’s many investment guarantee and free trade agreements.

On top of that, the Singapore Israel Industrial Research and Development Foundation also offer co-funding support through government funding for SMEs.

The items above are just some of the many reasons why this wealthy state city in Southeast Asia is the ideal setting for Israeli companies and other foreign businesses to expand their businesses and grow their investments to the fullest. In a nutshell, the value of foreign direct business inflows in Singapore is steadily growing every year because the country has a long-proven record of economic growth, coupled with the right and stable business environment that are advantageous to commercial ventures targeting the global market.