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Enterprise Investment Incentive (Technopreneur) Scheme |
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EDB will share the risk of technology-based ventures with investors via the Enterprise Investment Incentive (Technopreneur) Scheme - EII (Technopreneur). This scheme gives qualifying technopreneur startups loss insurance for their investments.
With EII (Technopreneur) status, a startup can issue certificates to its investors for investments of up to S$3 million. Investors with these certificates can deduct any investment loss from their taxable income.
To qualify, a startup must:
- Be an unlisted company in its initial years of existence with a paid-up capital of at least S$10,000
- Primarily be in the initial stage of developing or exploiting a new technology in relation to a specific product, process or service in a high-growth sector
- Be incorporated in Singapore, though there is no restriction on the ownership profile of the company
- Conduct the startup activity wholly or mainly in Singapore.
Overseas startups may qualify for the scheme if there is scope for Singapore to enjoy the economic spin-offs arising from the activity. The tax deduction will apply to investors who are Singapore citizens/permanent residents and foreigners with Singapore tax liabilities.
Companies will enjoy the approved status for a maximum of five years. During this period, it must continue to satisfy the qualifying conditions. There will be no renewal or extension of the status. If a company wishes to start on a new qualifying enterprise, it must set up a new entity.
Investments must meet the following criteria:
- Be in the form of a purchase of new ordinary share capital in the qualifying entrepreneurial startup and NOT replacement capital or debt instruments (such as convertible loans)
- No condition in the shares that would eliminate the investor's risk
- Shares must be issued and acquired by the investor during the time of the startup's approved status
- A loss will be recognised under this scheme provided that the sale of the qualified shares is between the start of the second and end of the sixth year from the date of purchase of the shares
- Each investment must be at least S$1,000.
- An investor can be an individual or a company. "Individual" includes the entrepreneur who founded the startup, and relatives and employees who purchase shares from the startup at market price (this excludes share allocations to employees and shares obtained by exercising employee stock options).
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Apply for EII (Technopreneur) status
You will need to send a full business plan, CVs of the management and a copy of Bizfile certificate, together with the complete form. You may be asked to present the business plan of the proposed new business. No application fee is needed.
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Please mail application form to:
Singapore Economic Development Board
T&VC - Enterprise Ecosystem Development
250 North Bridge Road
#28-00 Raffles City Tower
Singapore 179101
Attn: Application for EII (Technopreneur) |
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