SPRING Singapore, the government’s SME and startup support initiative, has followed through on a budget promise to implement a 50% tax deduction for angel investors. The 5-year Angel Investors Tax Deduction Scheme (AITD) will cover investments made from 1 March 2010 to 31 March 2015. Approved angel investors will get a deduction based on 50% of investment costs for a S$100,000 2-year minimum holding (capped at S$500,000).
Naturally there are critera to be met for both investors and companies: Investors must be individuals (corporations and trusts are ineligible) and have a track record in angel investing, entrepreneurship or senior management. Target companies must (among other things) be unlisted Singapore based and operating companies of no more than three years, have at least 50% of their total share capital in the hands of 20 or fewer investors, and must not engage in illegal or otherwise unapproved activities (including investment & real estate) as a core business. Perhaps needless to say, investors and beneficiary companies cannot be family relatives. Approved investors have that status for limited times, and must re-apply at the end of each period.
Full details on the scheme, eligibility and an application form are on the SPRING Singapore site.