Enterprise Investment Incentive Scheme (EII) and EII (Technopreneur)

Qualifying companies:

• For EII, a qualifying company must primarily be engaged in innovative and high growth activities with substantial development content for a specific product, process or service
• For EII (Technopreneur), a qualifying company must primarily be in the initial state of developing or exploiting a new technology in relation to a specific product, process or service in a high growth sector
• Must be a newly set up entity that has not previously been entitled to the scheme (for both EDB or SPRING)
• Must be unlisted in its initial years of existence with a paid-capital of at least S$10,000
• Must be incorporated in Singapore (but no restriction of ownership composition)
• Start-up activities must be wholly or mainly conducted in Singapore
• Overseas start-ups may also qualify if there is scope for Singapore to benefit from the economic spin-offs arising from the activity (however, the tax deduction only applies to Singapore citizens, PR or foreigners with Singapore tax liabilities)

Qualifying investments:

• Must be in the form of new ordinary share capital in the start-up and not replacement capital or debt instruments (such as convertible loans)
• Must not have any conditions attached to the shares, which eliminate the investors’ risk
• Shares must have been issued and acquired during the time of the start-up’s approved status
• “Loss” is only recognised if the sale of the share is between the start of the second and end of the sixth year from the date of the purchase of the shares
• Each investment must be at least S$1,000
• An investor can be a company or an individual (includes the entrepreneur who founded the start-up and relatives or employees who purchased shares from the company at market price, excluding shares allocated to employees by exercising of employee share options or otherwise)