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 Angel Investors Tax Deduction (AITD) scheme is suitable for angel investors who can commit a minimum of $100,000 in a qualifying startup.
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.
Angel Investors must:
- Make the investment at the individual level; hence investment made via corporations, trust, institutionalised funds and other investment vehicles are not eligible;
- Belong to one of the following three categories:
– Experienced angel investor with track record in early-stage investments; OR
– Experienced/serial entrepreneur with an entrepreneurial track record; OR
– Senior management professional/executives with corporate senior management experience
- Demonstrate the ability to nurture investee companies by having:
– Rich business experience and acumen
– Strong managerial/business capabilities to advise on growth strategies and entry into new markets
– In-depth understanding of industry trends and developments
– In-depth technical/ scientific understanding
– Strong industry networks and business contacts
For more information and application, please download and complete the AITD-Application-Form_updated-July 2018 application form with the following documents:
- Resume/ Curriculum-Vitae
- Investment track record (include details of how investor value-added to the investees), if relevant; and
- Any other relevant information to demonstrate the individual’s ability to value-add as an investor without a formal director/advisor role
Send applications and relevant documents to:
Startup & Global Innovation Alliance Division
1 Fusionopolis Walk
#01-02 South Tower, Solaris
Interested applicants of AITD may contact Enterprise Singapore via SSG_Investor_AITD@enterprisesg.gov.sg.
For more information on AITD, please refer to the following AITD FAQ_May 2018.
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:
- Gains arising from the divestment of approved portfolio holdings and;
- Dividend income from approved foreign portfolio companies and;
- 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:
- Management fees arrived from an approved venture capital fund and;
- 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 minimally fulfil the following conditions:
- The funds should be incorporated and based in Singapore and;
- 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 Enterprise Singapore via SSG_Investor_S13H@enterprisesg.gov.sg.