Angels to bless start-up entrepreneurs

SPRING Singapore will administer the Angel Investors Deduction Scheme to help seed and nurture innovative start-ups.

The aptly named scheme provides tax incentives to individuals with entrepreneurial and business expertise to bring their investments, expertise and networks to start-ups to help them grow, according to a Spring Singapore report.

Under the scheme which was announced in February, approved angel investors who make equity investments of at least $100,000 in eligible start-ups in a given year will qualify for a 50% tax deduction of the investment on their incomes.

To benefit, the angel investor must demonstrate the ability to nurture investee companies, through his entrepreneurial or business experience. He should also be prepared to contribute as a board member or an advisor to the start-up.

The tax deduction would be given at the end of a two-year holding period and is subject to a cap of $500,000 of investments in each year of assessment. The scheme is valid for investments made from 1 March 2010 to 31 March 2015.

"Many start-ups begin with lean operations and find it difficult to engage business talent to help them develop the right strategies or connect to the right markets. Angel investors play a critical role in bridging this gap by bringing along their business skills, industry expertise, and business contacts that are invaluable to help in the start-ups’ growth," said Mr Tan Kai Hoe, Deputy Chief Executive, SPRING Singapore.

There are more than 100 angel investors in Singapore today and they typically invest some $30,000 to $500,000 in promising start-ups.

SPRING aims to catalyse some $600 million worth of angel investments in Singapore over the next five years, and increase the angels’ involvement in the start-up landscape through this scheme.