Encouraging companies and firms to internationalise has always been one of the key focus for Singapore. This is due to fact that the domestic market is too small for enterprising companies to reach their growth potential. There are existing grants and tax incentives to help businesses to take their first step in venturing overseas. In this year’s Budget, two existing schemes have been enhanced to accelerate the internationalisation of businesses as detailed below:
Market Readiness Assistance (MRA) Grant
The MRA grant is a broad-based enterprise grant scheme that provides support to companies venturing overseas for the first time. This grant scheme supports pre-scoped activities to help Small and Medium Enterprises set up overseas, identify business partners, and promote their products and services.
As announced in this year’s Budget, the MRA grant scheme will be enhanced as follows:
- Expand the scope of supportable activities to include Free Trade Agreement (FTA) consultancy services to support companies in better leveraging FTAs and in-market business development;
- Increase the grant cap from $20,000 per year to $100,000 per new market per company over the enhancement period of Financial Year (FY) 2020 to FY 2022; and
- Extend 70% support level for another three years until 31 March 2023.
Double Tax Deduction Scheme for Internationalisation (DTDi)
DTDi aims to encourage Singapore businesses to expand overseas by providing a double tax deduction on qualifying expenses incurred for international market expansion and investment development activities.
To continue encouraging internationalisation, the DTDi scheme will be extended till 31 December 2025. In addition, the scope of the DTDi scheme will be enhanced to cover the following:
- Third-party consultancy costs relating to new overseas business development to identify suitable talent and build up business network; and
- New categories of expenses incurred for overseas business missions (i.e. fees incurred on speaking spots to pitch products/services at overseas business and trade conferences, transporting materials/samples used during the business missions, and third-party consultancy costs to arrange business networking events to promote products/services).
The expanded scope will take effect for expenses incurred on or after 1 April 2020.