Tax Deduction Scheme for Angel Investors in Singapore

Updated on Sunday 25th March 2018

Foreing investors interested in setting up a hedge fund startup in Singapore or another type of investment vehicle can benefit from tax deductions or exemptions, depending on the investment fund they will register. One of the ways to qualify for a tax deduction is by investing in Singapore under the Angel Investors Tax Deduction Scheme (AITD), an incentive scheme which is open up to 31st March, 2020


AITD in Singapore 

The investment scheme is provided in Singapore by the SPRING Start-up Enterprise Development Scheme (SEEDS) and Business Angel Scheme (BAS) and it is addressed to individuals or fund management companies performing investments in this country. 
To qualify as an Angel Investor, the applicant has to respect several requirements, as presented below:
invest at an individual level, and not through other investment funds;
have an in-depth experience in the field of investments, entrepreneurship or be a senior management professional;
demonstrate the ability to invest in local companies in Singapore

Tax deduction requirements in Singapore 

Tax deductions are available for most of the investors starting a hedge fund in Singapore, but in the case of the Angel Investor scheme, the following conditions should be met: 
invest minimum $100,000 in a qualifying start-up company within one year since the investment was started;
invest the same amount for the next two years, on a continuous basis. 
The investors can obtain the tax deduction for each year, and it is applicable at the rate of 50% of the cost of the qualifying investment. The maximum tax deduction that can be obtained through this scheme is of $250,000 and in order to qualify under the program, the investors will need to apply and receive an approval from SEEDS.
The application process will include an application form, in which the investors should provide the following data: 
investment track record;
other relevant information that can demonstrate investor’s abilities
Investors who are interested in applying to the AITD program are invited to contact our team of affiliates in Singapore for professional consultancy services.