Not long ago, the economic community and policymakers in Singapore were complaining about the scarcity of businesses, so much so that the leaders of large companies shook hands to find the next a Sim Wong Hoo for Singapore. Sim Wong Hoo is the founder and chairman of Creative Technology. He is regarded as a hero by Singaporeans.
In 2002, the US working group of the Singapore Overseas Network sent a series of petitions to the Singapore Economic Commission, which proposed breaking the concept of “iron rice bowl” (job security) in the civilian field by firing underperforming people, cutting civil servants’ salaries so that potential business people no longer have the incentive to stay on the team. Those proposals were not accepted, but since then, Singapore’s business and investment environment have progressed with leaps and bounds.
According to the recently released World Bank 2016 Business Report, Singapore tops the group of countries most friendly to start-ups and runs businesses. This is also the 10th consecutive year that Singapore holds this position. To rise to that position, Singapore was determined and determined the right strategy.
The Singaporean government and related organisations consider business development a top priority in their program of activities, thereby creating an enabling environment for those who want to start and do business here.
Identifying a lack of money as a major difficulty for entrepreneurs, the Singapore Government has implemented many initiatives to help them access capital. These include cash supply, capital financing, business incubators, loans and tax incentives.
- Convert capital for shares
The Singaporean government and related organizations consider business development a top priority in their program of activities, thereby creating an enabling environment for those who want to start and do business here.
Investors can lend startups a loan in exchange for a stake in a newly established company. This type of funding is ideal for start-ups that need to add more capital, especially in the early stages of development.
In addition to private equity, there are also joint investment programs implemented by the Singaporean government to create the catalyst for private equity funding for newly established businesses. In other words, the government and a third-party investor poured money for start-ups. Government-funded equity financing programs include the following:
Spring Seeds Program is an equity investment program in which Spring Seeds Capital (under the Government of Singapore) and an independent third-party investor contribute capital to commercial start-ups based in Singapore, on a one to one basis, with a maximum investment of S $ 1 million (S $). The first investment is usually limited to S $ 300,000. Spring Seeds Capital and third-party investors often take a stake in the company in proportion to the amount of money they pour in.
The Business Angels (BAS) Program: Spring Seeds Capital and business angels (approved) invest in start-ups that are oriented towards growth and creativity, on a one-to-one basis, at a rate of The maximum investment amount is S $ 1.5 million. Spring Seeds Capital and it’s business angel group will hold shares in proportion to their contributed capital.
Early venture capital investment program (EVF): managed by the National Research Foundation (NRF), in which venture finance companies can mobilize at least S $ 10 million from side investors 3rd and will receive a 1-1 ratio of investment from NRF, with a maximum amount of S $ 10 million to invest in technology enterprises in the early stages. Qualified technology businesses can directly access venture capital firms to raise up to S $ 3 million.
2. The government finances startups money
One of the advantages of starting a business in Singapore is that business aspirators can access grants disbursed by various government agencies to support start-ups.
Each of these grants comes with terms and conditions, including quality criteria and disbursement methods. Typically, sponsorships account for only a certain percentage of the capital that businesses need.
Business owners will have to rotate the remaining capital. Most start-up grants are designed in a way that encourages innovation, research and development or social service. Those interested in starting a business must consider the funding terms before applying to the respective government agency.
3. Establish a start-up incubator.
This is a very useful source of investment for start-up entrepreneurs who are not only looking for money but also want to teach and learn business secrets. In general, business incubators create a real space for new businesses to operate and access shared services at cost savings, operational guidance and financial support during the board development phase. head.
This model is ideal for start-ups who want regular support, advice, funding and low-cost connectivity. There are at least 4 incubator programs in operation in Singapore. For example, under the NRF Technology Incubator Program, 15 technology nurseries were selected to nurture Singapore’s high-tech startups by consulting and funding them.
NRF will provide up to 85 per cent of the co-investment for each start-up in the nursery, with a maximum of S $ 500,000. The nursery will have to invest the remaining amount of at least 15 per cent. The NRF and the nursery will hold shares in the company in proportion to the amount of money invested.
4. Support startup loans
This is a reliable investment option for startups who want to raise capital without having to share their profits. The disadvantage of this program is that businesses pay their debts on time and pay them back even when the business is at a loss.
The loan guarantee program (LIS) guarantees loans from the risk of business bankruptcy. The government will share the premiums with start-ups. LIS supports both domestic and foreign businesses and businesses and does not set a maximum loan limit. The rate of premium, interest rate and loan term are determined by the insurer based on the borrower’s risk profile. The government supports up to 50 per cent of insurance. The structure of debt repayment and collateral requirements will be decided by the participating financial institutions.
In addition, one of the most remarkable initiatives of the Singapore government is for startups with many tax incentives. The tax reduction act became the driving force for entrepreneurs to start a company and create more jobs for the economy.
Universities and colleges also play a significant role in nurturing the entrepreneurial spirit of students and faculty, as well as creating the basis for them to turn business ideas into reality. From 2011 to the end of 2015, Nanyang Technological University alone supported 163 start-ups.
Thanks to such efforts, the number of startups in Singapore increased by more than 90 per cent from about 2,800 enterprises in 2004 to 5,400 in 2014. Young businesses created about 345,000 more jobs during this period.
Start-up businesses are defined as businesses with less than 5 years of age, employing at least 1 employee. These businesses often provide innovative products, services or processes related to the internet such as eCommerce Solutions, computers, telecommunications or automation. Startups can also design or apply innovative processes for developing, investigating, and researching target markets.
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