Blog

1 INTRODUCTION

The Government has announced Supplementary Budget Support Packages for both self-employed individuals and companies, which are badly affected during the Covid-19 and the continuous economic contraction. The economic growth forecast for 2020 is reduced to -4% to -1%. The details of the relief packages amounting to 54.6 billion dollars, including announced in the Budget 2020 for companies and self-employed individuals, are as follows:

• Self-employed persons’ income relief

Self-Employed Person Income Relief Scheme, which will disburse $1,000 a month for nine months and cash payments of $3,000 in May, July and October this year to help them in this time of economic uncertainty.

• Self-employed include taxi and private-hire car drivers, real estate agents, media and art freelancers, and sports coaches.
• Lower-wage workers, including self-employed ones, will get a $3,000 cash payout under the Workfare Income Supplement scheme. To qualify for the scheme, citizens must be 35 and older and earn a gross monthly income of not more than $2,300 among other criteria.
• The Self-Employed Person Income Relief Scheme (Sirs), will be open to those who earn a net trade income of no more than $100,000, live in a property with an annual value of no more than $13,000 and do not own two or more properties. They must also have started self-employment on or before March 25 and must not earn any income as employees. If they are married, they and their spouse together must not own two or more properties, and the spouse’s assessable income must not exceed $70,000.

• Lost Jobs or Income can apply for aid from April 1, 2020

• Those who have been financially affected by the Coronavirus outbreak through losing jobs or income will be able to apply for a one-time cash assistance of $500 from April 1.
• From May 1, those who are eligible will receive $800 a month for three months, if they commit to receiving employment and training support from Workforce Singapore and the Employment and Employability Institute (e2i).
• Those who are already receiving ComCare Assistance, will not be able to apply for either the temporary relief fund or the Covid-19 support grant.

• Temporary Bridging Loan Programme

The temporary bridging loan programme will be available for enterprises across all sectors from April 1.

1.3. Temporary Bridging Loan Programme (Cont’d)

Businesses can take a loan of up to $5 million under the programme, an increase from the previous $ 1 million cap. All eligible enterprises can apply for the programme till March 31 next year.

• SME Working Capital Loan

The SME Working Capital Loan, helps small and medium-sized enterprises (SMEs) in all industries access financing for cash flow. The maximum loan quantum has been raised to $1 million, up from the $600,000 cap. The Government will work with participating financial institutions to defer principal payments for one year on loans under these two schemes, if businesses ask for it.

• Enterprise Financing Scheme

The Enterprise Financing Scheme – Trade Loan, which supports enterprises in areas like the financing of short-term import and export needs, will be enhanced for one year from April 1. The maximum loan quantum is doubled to $10 million and the Government’s risk-share has been increased to 80 per cent. Interest rates for loans taken under the programmes are subject to assessments by participating financial institutions. Monetary Authority of Singapore is working with banks and insurers to see how they can help businesses and individuals facing cash flow problems with their loan obligations and insurance premium payments. Details will be announced by the central bank and the industry at a later date.

• Tax Payments deferred

Businesses and self-employed people will be granted a three-month deferment on income tax payments to ease their immediate cash flow concerns. All companies with corporate income tax payments due in April, May and June will have them deferred automatically for three months. Payments will be collected from July. This move is in addition to the 25 percent income tax rebate, capped at $15,000, announced for companies, for Year of Assessment 2020 that was announced last month in Budget 2020.

• Wage Credit Scheme

The Wage Credit Scheme, enhanced in last month’s Budget, co-funds wage increases for Singaporean employees earning a gross monthly wage of up to $5,000 – an increase from the previous ceiling of $4,000. The Government is funding 20 per cent and 15 per cent for 2019 and 2020 qualifying wage increases, respectively. Businesses will receive two schemes by October this year.

• Job Support Scheme – Wage subsidies

The basic cash grant of 25 percent of wages under the Jobs Support Scheme applies to all Singaporean and Permanent Resident employees.

1.8. Job Support Scheme – Wage subsidies (Cont’d)

Firms in the food service sector, including hawker stalls, will receive higher support, at 50 per cent of wages. Firms in the aviation and tourism sectors – which are the worst hit by the Covid-19 outbreak – will receive 75 per cent of wages. The support will apply to the first $4,600 of gross monthly wages per local employee, which is the median wage in Singapore. Gross monthly wages include employee contributions to the Central Provident Fund (CPF). Employers will receive payouts in three tranches, at the end of May, July and October. This help also last for nine months, until the end of this year. They do not need to apply for the scheme, as it will be computed based on their CPF contribution data.

• Skills Future training support to be extended to all sectors

From May, all employers who send their workers for selected training programmes can receive additional support from Skills Future Singapore funding. They will receive enhanced absentee payroll support at 90 per cent of hourly basic salary, capped at $10 per hour.

• Student Loan

The Government will freeze all government fees and charges for one year, starting from next month and ending March 31 next year. It will also suspend all loan repayment and interest charges for graduates who have taken government loans for university and polytechnic studies, starting from June and ending May next year.

• Private Bus Operators

Private Bus Operators will be granted a one-year road tax rebate. Operators will also be granted a nine-month waiver of the Class 2 Bus Service Licence fee. Those who have paid the fee for this year will get refunds of about $750 each. A six-month waiver of parking charges at government-managed parking facilities will be granted. Self-employed operators can apply for an income relief scheme. Those eligible will receive $1,000 a month for nine months.

• Enhanced Property Tax Rebates

Non-residential properties will be granted an enhanced rebate for property tax payable for the period Jan 1, 2020 to Dec 31, 2020. These properties include:

1.12. Enhanced Property Tax Rebates (Cont’d)

• 1.13. Making Companies/Firms more resilient

• Up to 80% of the cost of investing in technology like automation will be covered for firms under the productivity solutions grant.
• Up to 90% under the enterprise development grant, which help firms upgrade, innovate or venture overseas.

These two enhancements will last till the end of the year.

• 1.14. Individuals, firms can defer payment of property and business loans

MAS and the banking industry aim to offer relief to households and firms that may find themselves tight on cash during the downturn.

• House owners can apply to their bank or finance companies to defer repayments for their property loan until 31^st Dec 2020.
• Individuals can also apply for their insurers to temporarily stop paying premiums in their life and health insurance plans for six months.
• SMEs, subject to conditions, can apply to their lenders to defer principal amounts on secured term loans until Dec 31, 2020. SMEs can also apply to their insurers to pay in instalments their Company’s general insurance premiums (e.g. property, trade credit, vehicles).

Monetary authority of Singapore in short form called MAS regulates and issue licenses for financial activities business in Singapore. Various forms of licenses are issued for companies engaged in fund management, investment, securities, debts, research and development of financial products, and raising capital as venture capital companies.

Crypto currencies are not regulated by the Monetary authority of Singapore (MAS) as they are not legal tender. Crypto exchange, crypto custodian services are seeing growth. Beijing’s support for block chain technology and Facebook’s upcoming move into financial services with its proposed Libra currency have shown interest in the token economy. Bitcoin is the world’s most valuable crypto currency are there are more than 3000 types of cryptocurrencies in the market.

There are digital tokens and utility tokens in circulation. Utility tokens can be used to purchase products or services offered by the companies that issued them. Parliament in Singapore has passed a new law during Jan 19 that will put more payment services, such as digital payment tokens and merchant acquisition under the ambit of the MAS and comes under the payment services Act, which will come into force early 2020.

FININANCIAL INSTITUTION DIRECTORY: BANKING ACT, INSURANCE ACT, SECURITIES AND FUTURE ACT, FINANCIAL ADVISERS ACT, PAYMENT SYSTEM (OVERSIGHT) ACT and PAYMENT AND SETTLEMENT SYSTEMS (FINALITY AND NETTING) ACT are the main acts to regulate all the financial services industry in Singapore. Before you set up a co., to carry out any financial services you are going to engage make the appropriate application to seek the approval and to obtain license from MAS. The license issued by MAS will carry all the required conditions to carry out your business in Singapore.

Financial Institutions Directory- a list of financial institutions regulated by the Monetary Authority of Singapore (MAS) and the activities they are authorized to provide- are listed in the directory. You can visit the website. https://eservices.mas.gov.sg/fid

REGISTER OF REPRESENTATIVES: a list of individuals who conduct activities regulated by MAS. The list is available on the MAS website – https://www.mas.gov.sg

INVESTORS ALERT LIST: MAS started the alert list during the year 2004 to help consumers assess investment opportunities, so that they could make more informed decisions. Consumers perceive wrongly that these entities or people are licensed or regulated by MAS and there are safeguards in place. MAS will also de list after an unregulated person or entity has obtained the requisite license. MAS receives information about unregulated people or entities based here or overseas that offer investment opportunities targeting local customers.

A list of persons and entities that are unregulated and may have been wrongly perceived as licensed authority by MAS- The list is available on the MAS website https://www.mas.gov.sg/ial

Source: Business Times
Article Date: 21 May 2020
Author: Liu Hern Kuan & Vincent Ooi

Some professionals have been incorporating one or more companies in an attempt to gain tax advantages.

For the past few years, high-earning professionals such as doctors and dentists have been in the spotlight as the Inland Revenue Authority of Singapore (IRAS) intensified its investigations to uncover tax avoidance attempts.

In 2018, two articles in The Straits Times described how some professionals were incorporating one or more companies in an attempt to gain tax advantages. The issue was the difference between the highest personal income tax rate of 22 per cent and the corporate tax rate of 17 per cent, which provided an opportunity for tax arbitrage. The Start-Up Tax Exemption Scheme and Partial Tax Exemption and the availability of corporate tax rebates (typically announced during the Budget) also contributed to making incorporating one or more companies more attractive.

Since the articles were published, many professionals have attempted to justify their structures and arrangements to the IRAS, arguing that they were not engaged in tax avoidance. An article in BT (“Shining a light on tax avoidance,” Nov 17, 2018) expressed our views on when an arrangement may be regarded as tax avoidance. While the IRAS has helpfully provided guidance to medical professionals on this, many questions regarding the law in this area remained. The line between permissible tax planning and tax avoidance was arguably unclear; and in many cases, it was no easy task to determine whether there had in fact been tax avoidance.

In the recent case of GCL v Comptroller of Income Tax, the Income Tax Board of Review (ITBR) laid down several principles that may help clarify the legal position here. The case is a very significant one as it addresses head-on several important questions about professionals incorporating companies and tax avoidance. We caution that none of our comments is intended to be taken as legal advice and that, especially in the context of tax avoidance, cases often turn on very specific facts. Nevertheless, it may be useful to look at the GCL case.

INCORPORATED A COMPANY

The salient facts of the case are as follows. In GCL the taxpayer, a dentist, was employed by Yco, an orthodontic clinic, and was paid a market rate salary for dental services rendered by him. He incorporated a company, XCo with himself as sole director and shareholder. He then resigned his employment with YCo; and in his place, XCo entered into a service agreement with YCo, where dental services were provided by XCo to YCo. The services were in fact provided by the taxpayer, who treated patients at YCo’s premises. YCo would pay service fees to XCo. X Co would then pay dividends and a salary to the taxpayer.

The Comptroller of Income Tax (CIT) regarded the income earned by XCo to be that of the taxpayer’s and imposed tax on the taxpayer on an individual tax basis. The CIT’s view was that the taxpayer, by incorporating and providing services through XCo, was involved in tax avoidance.

The ITBR ruled that the setting up of a company to provide services and receive service income was not by itself, tax avoidance. However the remuneration received by the taxpayer from XCo was significantly low and constituted tax avoidance.

The reasoning of the ITBR is important: the ITBR accepted that the test for tax avoidance may, very generally, be broken down into two parts. It is first necessary for the CIT to first establish that there is an arrangement that would produce a tax advantage. In this first part, the predication principle must be applied. If, applying the predication principle there is tax avoidance, then the analysis proceeds to the second part: the taxpayer must show that the arrangement was carried out for bona fide commercial reasons and did not have, as one of its main purposes, the avoidance or reduction of tax. Crucially, the first part of the test is objective in nature (in that the actual motives of the relevant persons are generally not to be considered) and the second part, subjective.

For the first part, the “predication principle” states that if an arrangement is objectively capable of explanation by reference to ordinary business or family dealing, without necessarily being labelled as a means to avoid tax, then it is not a case of tax avoidance. The significance of GCL is this: Professionals may be relieved to know that the ITBR held that the use of a company to carry out a dental practice is a common and widely used set-up, not inherently a tax avoidance arrangement. Thus, incorporation of a professional practice to carry out a profession is not, in itself, capable of constituting tax avoidance.

In GCL, as the ITBR found on the first part of the test alone that there was no tax avoidance, strictly speaking, it did not need to consider the second part of the test. However, it helpfully provided guidance on this issue, stating that it found that the taxpayer’s reasons for incorporation (facilitating future expansion of the business, the potential ease in obtaining financing and the limitation of business risk and liabilities) are natural benefits of operating a business in an incorporated entity and would constitute bona fide commercial reasons. It is noted that the test here is a subjective one, and depends on the intentions of the particular taxpayer at the point of incorporation.

While incorporation alone may not be sufficient to constitute tax avoidance, the ITBR held that the lower salary paid to the taxpayer after incorporation was tax avoidance. The taxpayer’s work was largely the same before and after incorporation. (It will be recalled that before incorporation he provided dental services under his employment with YCo; after incorporation, he provided services through XCo).

However, on the level of remuneration received by the taxpayer from XCo, the taxpayer conceded that his remuneration was based on his personal upkeep and maintenance requirements. The lower salary after incorporation thus effectively reduced his tax liability. The ITBR therefore ruled that this arrangement could not be explained by reference to ordinary business or commercial basis, and the taxpayer was unable to establish that the lower salary had been paid for bona fide commercial reasons.

ARM’S LENGTH TRANSACTION

The ITBR noted that as the taxpayer was the sole director and shareholder of the company he incorporated, section 34D of the Income Tax Act would require that he was to be paid an arm’s length salary by the company. “Transactions not at arm’s length” are those made between related parties whose terms differ from those which would have been made had the parties not been related. In such cases, the “arm’s length” price may be used to recalculate the taxable profits. So in GCL, the arrangement to pay the taxpayer a lower salary constituted tax avoidance. The same arrangement would have also fallen foul of the arm’s length principle, had the CIT chosen to invoke that provision.

The CIT also argued that the “personal exertion principle” originating from New Zealand law would apply to tax the income received by XCo in the hands of the taxpayer. The “personal exertion principle” provides that income from personal exertion should accrue to the natural person and cannot be assigned or diverted to another person, such as a company. The ITBR made it clear that this principle has no basis in Singapore tax law, and should not be applied in Singapore as well.

In summary, the GCL case has provided some much needed clarity on what constitutes tax avoidance. Professionals will now be better able to ensure that their business operations are structured in a manner that does not constitute unacceptable tax avoidance. Specifically, while professionals can incorporate companies with which to conduct their businesses, they must be careful not to pay themselves an artificially low salary.

The writers are from Tan Peng Chin LLC. Liu Hern Kuan is head of tax at the law firm; he was previously the chief legal officer of the Inland Revenue Authority of Singapore for 10 years. Vincent Ooi is an associate at the firm and a lecturer at the Singapore Management University (SMU) School of Law. The views are the writers’, and do not represent those of Tan Peng Chin LLC or SMU.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

INTRODUCTION – PAYMENT SERVICES ACT

The Payment Services Act 2019 (“PS Act”’) which repeals the Payment Services (Oversight) Act (“PSOA”) and the Money-Changing and Remittance Business Act (“MCRBA”), was brought into force on 28 Jan 2020. MAS has also published guidelines on Licensing for Payment Service providers and a frequently asked questions (FAQs) on the act.

Regulators today recognize the integral role of non-banks. In the old days only banks were the only institutions offering financial services. Regulators wanted the act to change the fundamental thinking by introducing activity based regulations. In Europe if they want to lend money out in mortgages only reserved by the banks to do. The rest of the financial services can be performed by companies that meet relevant regulatory requirements. The acts limits on e-wallet for individuals at $5000/- cap on balances and $30,000 cap on annual outflows. The cap do not apply to banks.

Besides, Monetary Authority of Singapore Act (Cap. 186), the following acts are also monitored, regulated and licensed by Monetary Authority of Singapore. Banking Act (Cap. 19) Insurance Act (Cap. 142)

Securities and Futures Act (Cap. 289) Payment Services Act Financial Advisors Act (Cap. 110) Variable Capital Companies Act Trust Companies Act

MAS has provided the useful online resources and the information for the common public to be aware. A list of finance institutions regulated by the MAS and the activities they are authorised to provide can be accessed and verified in their website (eservices.mas.gov.sg).

A list of individuals who conduct activities regulated by MAS and who are issued the licenses can be accessed (www.mas.gov.sg).

A list of persons and entities that are unregulated and may have been wrongly perceived as being licensed or authorised by MAS and the list is available and can be accessed (www.mas.gov.sg/IAL). More than 450 list of companies are in the investor alert list for cautioning the public.

DIGITAL BANKING LICENSES

Digital Banking licenses are going to be issued during the middle of the year 2020, the digital banks which are prevalent in other jurisdictions in the world offer banking services through email, online chat, mobile app, and phone calls and are not having physical branches. A guideline has been issued by MAS under the Banking Ordinance for the licensing requirements and will be issued during the middle of the year, to commence their operations during the next year.

Digital Wallet:
A digital wallet also known as “e-Wallet” refers to an electronic device or online service that allows an individual to make electronic transactions. This can include purchasing items on-line with a computer or using a smartphone to purchase something at a store. Money can be deposited in the digital wallet prior to any transactions or, in other cases, an individual’s bank account can be linked to the digital wallet. Users might also have their driver’s license, health card, loyalty card(s) and other ID documents stored within the wallet. The credentials can be passed to a merchant’s terminal wirelessly via near field communication (NFC). Increasingly, digital wallets are being made not just for basic financial transactions but to also authenticate the holder’s credentials. For example, a digital wallet could verify the age of the buyer to the store while purchasing alcohol. The famous top 10 payment gateway are: Samsung pay, Ali pay, We chat pay, Amazon pay, Google pay, Union pay, Paynow (Singapore).

Type of License:

There are 3 types of licenses issued under the act and they are Money changing license, Standard Payment Institution license (SPI) and Major Payment Institution (MPI). Under the payment services act the following 7 activity types are defined and licenses shall be issued by MAS for carrying out the operations in Singapore. The seven activity types of license are grouped under SPI and MPI and they are Account issuance service, Domestic money transfer service, cross border money transfer service, merchant acquisition service, e-money issuance service, digital payment token service, and money changing service.

Base Capital and Security Capital Requirements:

The base capital requirement under the act for SPI license is $100,000 and for MPI license is $250,000. There are security deposit requirement before obtaining a license and for a MPI license applicant must provide security either in the form of cash or bank guarantee of $100,000 if the average, over a calendar year, of the total value of all payment transactions in one month does not exceed S$6 million for any one payment service and for all other cases $200,000.

Exemption from Applying a License:

A bank licensed under the Banking act, a merchant bank approved as a Financial Institution, a Finance Company licensed under the Finance Companies Act, a person licensed to carry on the business of issuing credit cards or charge cards and any other person or class of persons prescribed by the act are exempted under Sec. 13 of the act from the requirement of a payment service license.

Letter of Responsibility and/or Letter of Undertaking:

Where appropriate, MAS may require applicants to procure a Letter of Responsibility and/or Letter of Undertaking from the applicant’s majority shareholders, parent company and/or related company.

Anti-Money Laundering and Countering the Financing of Terrorism (“AML/CFT”) Requirements:

A license must comply with the AML/CFT requirements as set out in the Notices on the Prevention of Money Laundering and Countering the Financing of Terrorism [PSN01 and/or PSN02] and Notice on Reporting of Suspicious Activities & Incidents of Fraud [PSN03].

Annual Audit Requirements:

A licensee must, on an annual basis, appoint an auditor to carry out an audit of its accounts and transactions, and compliance with regulations and requirements. The licensee must ensure that the auditor submits a report to MAS in Form 4. The applicant must have in place plans to meet the annual audit requirements as set out in section 37 of the PS Act. The auditor must be appointed at the applicant’s own expense to carry out an audit of its accounts and transactions, and compliance with the relevant regulations and requirements.

Applying MAS Guidelines:

Licenses should also understand and apply the relevant MAS Guidelines such as the Guidelines on Technology Risk Management and E-payments User Protection Guidelines, and keep abreast of regulatory changes.

Control of Share Holding in Licensee:

A person must not become a 20% controller of a Licensee without first applying for and obtaining the approval of the authority. The authority will look into the persons’ ability to conduct its business prudently and comply with the provisions of the act, any other written law administered by the authority and is in the public interest. The authority has powers to remove any person for non-compliance or for misconduct under the act.

Approval of CEO, Director or Partner of Licensee:

A licensee incorporated in Singapore must not appoint an individual as its CEO or director or partner unless an application has been made and obtained the approval of the authority. The authority may refuse an application of an applicant if he has been convicted whether in Singapore or elsewhere, an offence involving fraud or dishonesty, has had execution against the individual in respect of a judgement debt or entered into a compromise or scheme of arrangement that is still in operation, has in force against the individual a prohibition order issued while he was a director in a institution that is being wound up by a court or their licenses cancelled or withdrawn by the authority.

Obligation of Operator or Settlement Institution to have place of Business Registered Office:

An operator of a designated payment system and a settlement institution, must establish a permanent place of business or Registered Office in Singapore. The Company, must appoint a person to be present on such days and such hours, to address any queries or complaints from any customer. In the permanent place of business or registered office, the license must keep or cause to be kept books of all the transactions of the business. It is also the duty of the license to inform the change of address to the authority. Section 48 elaborates various circumstances and events if it takes in the company, place must notify the authority as soon as practicable after the occurrence.

Periodic Returns:

A licensee must submit periodic regulatory returns in relation to its payment service activities and are clearly defined in the MAS Notices:

1 INTRODUCTION

The government has taken initiatives to provide grants on various schemes to SMEs to promote innovation, globalization, digitization, automation and productivity improvements. The government departments namely Enterprise Singapore (ESG), Monetary Authority of Singapore (MAS), InfoComm Development Authority (IDA) have jointly provided various schemes to promote the above objectives.

SME centers attached to all the trade associations, with the help and support from the government, extend the above grants to reach all the SMEs in Singapore. You can also visit the above mentioned government departments’ websites to understand in detail the various schemes and the grants available. First we look into the definition of SME in Singapore.

1.1. Definition of SME

The Companies which are incorporated in Singapore enjoy all the tax benefits and incentives offered. When it comes to Enterprise Singapore, Government grants and incentives are concerned, the Company should be a SME to enjoy the benefit.
The definition of SME is as follows:

1. Registered and operating in Singapore
2. Having minimum 30% local shareholding (Singapore citizens and Singapore Permanent Residents) AND
3. (i) Company’s group annual sales turnover not more than SGD 100 Million OR 
(ii) Company’s group employment size not more than 200 staff.

A Company’s Group comprises:
Its direct and indirect [1] holding company [2], traced to the ultimate holding company

[3] and its direct and indirect subsidiaries [4].

[1] – Indirect shareholding refers to the shareholding that is held through another corporation.

• [2]  – Refers to the corporation which holds >50% shareholding of the company.
• [3]  – Refers to the holding company which is not itself a subsidiary of any corporation.
• [4]  – Refers to the corporation with >50% of its shareholding held by the company.

1.1.1. SMEs to get more help on remote working solutions healthcare and education sectors

Those in healthcare, education sectors can get subsidies of upto 80% for adopting approved digital solutions from the productivity solutions grant. The scheme will run until 31st Dec 2020 under IDA and ESG.

1.1.1. SMEs to get more help on remote working solutions healthcare and education sectors

(Cont’ d)

The available solutions include platforms which let healthcare providers conduct video consultations and organize delivering of medicine to patients and leaving management systems which facilitate the creation and delivering of online content. Eligible SMEs that want to adopt to these solutions can apply for subsidies at www.businessgrants.gov.sg

1.1.2. $6M Grant to support Singapore FinTech Firms

MAS, FAS and investment banking firm AMTD have jointly initiated the grant. There are 2 components to the grant and application will open on 18th May 2020 and close on 31st Dec 2021. The first is a business sustenance grant for eligible firms to get upto $20,000 to pay for salaries, rent and daily capital expenditure for the short term. The second is business growth grant which will hand out $40,000 for firm that show proof of concept which demonstrates a plan is workable with financial institutions on the API exchange (APIX) platform. With each subsequent proof of concept a firm will get $10,000 capped at $80,000.

1.2. Temporary Bridging Loan Programme

The temporary bridging loan programme will be available for enterprises across all sectors from April 1. Businesses can take a loan of up to $5 million under the programme, an increase from the previous $ 1 million cap. All eligible enterprises can apply for the programme till March 31 next year.

1.3. SME Working Capital Loan

The SME Working Capital Loan, helps small and medium-sized enterprises (SMEs) in all industries access financing for cash flow. The maximum loan quantum has been raised to $1 million, up from the $600,000 cap.

The Government will work with participating financial institutions to defer principal payments for one year on loans under these two schemes, if businesses ask for it.

1.4. Enterprise Financing Scheme

The Enterprise Financing Scheme – Trade Loan, which supports enterprises in areas like the financing of short-term import and export needs, will be enhanced for one year from April 1. The maximum loan quantum is doubled to $10 million and the Government’s risk- share has been increased to 90 per cent (from 8 April 2020 till 31 Mar 2021, under the Temporary Bridging Loan Programme, Enterprise Financing Scheme – Working Capital Loan, and Enterprise Financing Scheme – Trade Loan). 
The interest rates for loans taken under the programmes are subject to assessments by participating financial institutions. Monetary Authority of Singapore is working with banks and insurers to see how they can help businesses and individuals facing cash flow problems with their loan obligations and insurance premium payments. Details will be announced by the central bank and the industry at a later date.

1.5. Making Companies/Firms more resilient

• Up to 80% of the cost of investing in technology like automation will be covered for firms under the productivity solutions grant.
• Up to 90% under the enterprise development grant, which help firms upgrade, innovate or venture overseas. 
These two enhancements will last till the end of the year.

1.6. SME retailers to start selling online (E-Commerce Booster Package)

• The E-Commerce Booster Package was launched to help small and medium- sized enterprise (SME) retailers which are new to, or have little experience in, e- commerce to diversify their revenue streams beyond the traditional bricks-and- mortar model.
• Retailers can sign up with one of four e-commerce platforms – Amazon, Lazada Singapore, Qoo10 or Shopee – and have 90 per cent of qualifying costs waived.
• The one-time support is capped at $9,000 and the e-commerce platforms will offset their fees directly.
• Qualifying costs refer to the services provided by the platforms, including content development services, product listing and advertising.
• The platform providers will work with retailers to curate and list products for up to six months, participate in promotional campaigns, fulfil orders and analyse sales data.
• Those looking to expand their reach overseas can also tap ESG’s existing Multichannel E- 
Commerce Platform Programme and list their products on overseas marketplaces with 
more qualifying costs covered.
• The ESG booster package will also help SME retailers with their manpower costs. It will 
support 90 per cent of the salary costs of three of their employees for three months.
• New hires and existing employees who are Singaporeans and permanent residents can
• Retailers can sign up for the E-Commerce Booster Package directly with the e- commerce

platforms and solutions providers from now until Sept 30.

1.7.  Work-Life grant 
Work life grant to help firms implement work from home and staggered hours arrangements. Companies can get $2,000/- per worker on daily work from home arrangement for at least a month with a cap of $70,000/- (up to 35 employees you can apply).

1.8.  Self-employment person Income Relief Scheme (SIRS) 
People eligible for SIRS will receive 3 quarterly payouts of $3,000 each with the next two payments in July and Oct 2020. People who do not receive a notification by the end of May 2020 are not automatically eligible and should submit their applications to NTUC. You will get a reply from NTUC within one month and will receive all 3 payments.

1.9.  TR76 – E-commerce transactions – National Standard 
The launch of the new standard Technical Reference 76 (TR 76) will help built trust and transparency in online transactions (Enterprise Singapore and the Singapore Standard Council – both developed it). Businesses can use the guidelines as check list to develop e-commerce policies and communicate clearly to the customers. The guidelines include details on what information merchants need to state regarding their products or services, return and refund policies, as well as payment and shipping policies.