How to avoid these 6 mistakes when applying for grants in Singapore

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Mathias is a TIA Star Contributor and publishes exclusive, high-value content that serves the Asian tech community. Read more from TIA Star Contributors here.

Rated number one in the world by the World Bank for ease of doing business, Singapore provides a variety of grants. In its most recent budget, the city-state’s government amplified its support toward the tech sector through a number of publicly funded schemes.

Still, many tech companies are currently missing out on the opportunity to benefit from these grants. We take a look at some of the main slip-ups.

1. Targeting the wrong grant

The main grant people think of when looking for funding is the Productivity and Innovation Credit Scheme (PIC). It provides tax deductions or cash payouts for Singapore-registered businesses that have already invested in any activity along the innovation value chain.

But the PIC scheme is coming to an end, and companies often think that it’s no longer an option. However, many companies can still submit claims for expenses incurred in their financial year 2017 up until December 15, 2018, a valuable opportunity to secure funding.

The Capability Development Grant (CDG) is primarily for SMEs with a proven business model and revenue stream, as opposed to startups who are looking for initial funding. Many wrongly assume that CDG is “the new PIC,” but the two are not comparable.

CDG is for upcoming projects usually carried out by external parties that have already been certified by SPRING Singapore. In the latest budget, the government revealed plans to merge CDG with another grant to create the new Enterprise Development Grant (EDG). The aim is to provide a framework that helps businesses to innovate and expand overseas.

In addition to SPRING, there are a number of agencies that also provide sector-specific grants, such as the Monetary Authority of Singapore (MAS), National Environment Agency (NEA), Building and Construction Authority (BCA), and Cyber Security Agency of Singapore (CSA). Grant applications can be lengthy and time-consuming, so understand at the outset which grants are available and most suited for your business.

2. Misunderstanding PIC’s definition of R&D

Many tech companies choose to apply under the generic-sounding R&D section of the PIC. However, the term comprises of three categories according to the Inland Revenue Authority of Singapore (IRAS):

• Basic research
• Applied research
• Experimental development

General R&D in the broader sense of product development does not fall within this scope, except for projects that are conducted to solve a scientific or technological limitation.

A good approach is to assess the “prior art” (the state of knowledge prior to the project) by listing the patents, academic papers, industry releases, and associated information related to the project’s purpose in order to demonstrate its novelty.

Many businesses focus on their main product when applying. However, in many cases, it is a technological or scientific aspect of their project that qualifies as R&D under IRAS guidelines. So, it’s worth looking into where the true “newness” of the business lies.

3. Forgetting about funding

4. Failing to claim staff costs under the PIC

5. Mixing up “technology innovation” with “service innovation”

6. Pitching it wrong