By now, most businesses based in SG should have felt the sting from the slowing economy, and would have adopted cost cutting measures to ride through the doldrums. Projects in the pipeline are probably halted to avoid unnecessary risks. But is it all doom and gloom? Are business activities slated to be put on ice?
On the contrary, the SG government is taking a proactive approach, opening the coffers for eligible companies to 1) improve themselves (Capability Development), and 2) expand overseas through purchased growth (Mergers & Acquisitions).
Grants, tax allowances and more are being rolled out and administered by SPRING Singapore (“SPRING”), IE Singapore (“IE”) and IRAS to achieve those goals, but are they applicable to YOU?
For companies keen to improve their operations, productivity, service/quality standards, now would be a great time to pursue these initiatives. SPRING is leading this charge to assist companies to improve their operations in 10 business areas, encompassing productivity, business processes, R&D and market access creation functions.
SMEs are now able to obtain government assistance (up to 70% in subsidies on the cost of the improvement) to stay competitive.
Do take note applicants to the grant will be subjected to a certain level of scrutiny(and there are certain requirements to be eligible), so bona fide eligible companies applying for the grant should be prepared to assign managerial staff to oversee the change process full time.
Mergers and Acquisitions (“M&A”)
Domestic market share has stagnated and the only way to gain market share and achieve economies of scale is to “buy out” competition? Now would be the opportune time to engage in M&A deals.
If your first thought on M&A deals is the lack of funds, fret not, as the Internationalisation Finance Scheme (via IE) is here to help. Partnering with “lender” financial institutions, IE co-shares the risk with the lender, enticing them to “extend a helping hand”.
Coupled with the enhancement (i.e increase in tax savings on taxable income) of the M&A tax allowance scheme (via IRAS) during Budget 2016, companies are encouraged to expand overseas and position themselves in emerging markets. The message is clear, go forth and venture!
These schemes translate to added “funds” in your M&A war chest when your company is out looking for strategic acquisition targets to invest. As always, check your company’s eligibility for the schemes prior to a corporate buying spree!
The grants and allowances mentioned above are just some of the more interesting “investments” which the SG government is keen to place in our local SMEs, assisting us to position ourselves for the eventual upturn in the global economy.
There are certainly more public funds made available to assist our SMEs to go forth, so if you would like to find out more, do contact us for a “no obligations” chat on how to improve your company’s operations and ride through the doldrums.