Angel Investors Tax Deduction Scheme

We have been awaiting more details on the 50% tax break for angel investors scheme since it was first announced in Singapore Budget 2010.

Now, SPRING Singapore has released details on the Angel Investors Tax Deduction Scheme.

“Under the scheme, an approved angel investor who commits a minimum of $100,000 of equity investment in a qualifying start-up within a given year shall enjoy a tax deduction at the end of a two-year holding period based on 50% of his investment costs, subject to a cap of $500,000 of investments in each Year of Assessment (YA).”

For Angels

Criteria

A key thing that an eligible angel investor must be able to do is to “demonstrate the ability to nurture investee companies”. To help judge this, one must be either one of these three:

(1) Experienced angel investor with at least 3 years of experience in early-stage investments; OR
(2) Experienced/serial entrepreneur with at least 5 years of entrepreneurial track record; OR
(3) Senior management professional/executives with at least 8 years of corporate senior management experience

An approved investor will be given the approval status for at least 12 months, following which, the status will have to be renewed.

Reporting

The angel investor must:

– Update SPRING every half-yearly for investments made during the qualifying period
– Submit Annual Reports of investment activities to SPRING in such template and timeline as may be required by SPRING.

Investee Company-related Criteria

Eligible Investee Companies