Pioneer Certificate Incentive and Development and Expansion Incentive

Governments worldwide strive to create favorable conditions for investments and economic growth. In Singapore, the government has introduced the Pioneer Certificate Incentive (PC) and Development and Expansion Incentive (DEI) programs to drive innovation, attract investments, and facilitate the expansion of Singapore companies. This article aims to provide an overview of this incentive, highlight its benefits, outline the eligibility criteria, and explain the application stages.

Topics To Be Discussed

Key Facts about the PC and DEI

Benefits of the PC and DEI

Eligibility Criteria for the PC and DEI

How to Apply for the PC and DEI

Key Facts about the PC&DEI Incentive

The Pioneer Certificate Incentive and Development and Expansion Incentive (PC&DEI) is a government initiative aimed at encouraging companies to engage in new or expanded economic activities in Singapore. It is administered by the Economic Development Board (EDB), an agency playing a crucial role in driving Singapore's economic development by attracting foreign investments, promoting local businesses, and supporting the growth of key industries.

PC&DEI target companies involved in high value-added services, manufacturing, research and development. It is also open to companies managing global or regional headquarters activities. An approved company under the PC or DEI is entitled to significant tax benefits, including a corporate tax exemption or a concessionary tax rate on income generated from qualifying activities. By reducing the tax burden for eligible companies, this incentive encourages them to invest in strategic sectors, conduct research and development, and drive economic growth in Singapore.

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Tax Credit Amount

Tax exemption or a concessionary tax rate of 5% or 10%.

Timeline

The duration of the application process can vary depending on various factors, but it typically takes several months.

Key Requirements

1. Company registered in Singapore and operating here;

2. Introduce technology, skill sets, or knowhow that are substantially more advanced than the average prevailing in Singapore; OR

3. Developing capabilities and expanding activities in Singapore; OR

4. Conducting HQ activities.

Benefits of the PC&DEI Tax Incentive

An approved company under the PC&DEI is entitled to the tax exemption or a concessionary tax rate of 5% or 10% on income derived from qualifying activities.
The incentive period is typically limited to five years. However, companies have the opportunity to apply for an extension of the incentive period if they demonstrate a commitment to undertake further expansion plans during this time.
To ensure transparency and compliance, the company is required to maintain a separate account specifically for any non-qualifying activities carried out during the incentive period. Income generated from these non-qualifying activities will not be eligible for the tax incentive.

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Eligibility Criteria for the PC&DEI Tax Incentive

The application for the PC&DEI is open to Singapore companies willing to make significant investments that contribute to the economy or advance capabilities towards globally leading industries. The concept of "significant investments" is evaluated on a case-by-case basis by the Economic Development Board.

To qualify for the incentive, companies are required to meet certain requirements:

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Manufacturing projects must commit to fixed asset investments in plant, building, or equipment.

The company should create employment opportunities.

Business expenditures should generate positive spin-offs to the economy.

Companies should commit to growing capabilities, such as technology, skill sets, and know-how, within Singapore.

PC&DEI is currently open for three types of activities: Manufacturing, Services, and Headquarters (HQ) activities.

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How to Apply for the PC&DEI Incentive

Typically, the application process for the PC&DEI involves several stages, and the time taken to complete each stage may differ based on the complexity of the application and the responsiveness of the company. On average, the entire process may take several months to complete. Here's a general overview of the stages involved in the application process:

Once the company confirms its eligibility, it can proceed with submitting a formal application. The application typically requires filing two forms:

Core Form: The Core Form is a critical part of the application and requires the entity to provide essential information related to the projected incremental investment in terms of employment, fixed asset investments, and total business expenditure. This information helps the Economic Development Board (EDB) assess the scale and potential impact of the proposed activities.
Sub Form: The Sub Form complements the Core Form and seeks additional information on skilled employment, headquarters activities, products to be manufactured, etc.

How We Can Help with the PC&DEI Tax Incentive

At CorporateServices.com, we understand the importance of navigating the grant application process effectively and maximizing the benefits of the Pioneer Certificate Incentive and Development and Expansion Incentive. Our dedicated team is here to provide comprehensive assistance and support to ensure a seamless application experience. We will assist you in preparing and organizing all the necessary documentation and information required for a successful PSG application. We can help streamline the process, saving you time and effort. Discover more about our Incentives services and how they can benefit your business.

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This series of articles regarding Singapore government incentives was prepared by CorporateServices.com, a leading Singapore-based corporate service provider. We offer a range of services for private limited companies in Singapore. Our team of experienced experts provides Singapore company registration and other incorporation-related services through our cutting-edge online platform.

Contact us if you need assistance with setting up a new Singapore company or would like to transfer the administration of your existing company to us.