SkING S|ngapore's New SML Def|n|t|on and

Incent|ves Cr|ter|a
1
The previous SME Definition is as follows:
Companys fixed assets investment (net book value) not more than
S$15 million AND employment size not more than 200 workers
(services sector)
New SME Definition
2
With effect from 1 April 2011, the new SME Definition will be as follows:
Companys annual sales turnover of not more than S$100 million OR
employment size not more than 200 workers
Previous criteria:
Minimum 30%local equity; AND
Companys Group FAI (net book value) not more than S$15 million;
AND
Companys Group employment size not more than 200 workers
(Services)
New SME Incentives Criteria
3
With effect from 1 April 2011, the new SME Incentives Criteria will be as
follows:
Minimum 30%local shareholding AND
Companys Group annual sales turnover not more than S$100 million;
OR
Companys Group employment size not more than 200 workers
Lx|st|ng
Group Tracing
Current Group tracing:
Up to 3 levels for corporate shareholder(s) holding 20% of total
shareholding
1 level down for subsidiary(s) where applicant holds >50% of total
shareholding
4
New Group tracing:
All levels up for corporate shareholder(s) holding >50% of total
shareholding of the applicant company and any subsequent
corporate parents
All levels down for subsidiary(s)
X Level Up Individual Shareholders
2nd Level Up Corporate Parent 2
n2%
1st Level Up Corporate Parent 1
n1%
Applicant Company
m1% m2%
-Corporate parents, a|| |eve|s above App||cant, w||| be
|nc|uded w|th|n Group |f n > S0
- Subs|d|ar|es, a|| |eve|s be|ow App||cant, w||| be
|nc|uded w|th|n Group |f m > S0
- k and are not sub[ect to a max|mum no.
New Group Tracing
1st Level Down Subsidiary 1 Subsidiary 2
m3%
2nd Level Down Subsidiary 3
m4%
Y Level Down Subsidiary 4
5
Group 1]C:
Croup ConsolldaLed 1/C of ulLlmaLe CorporaLe arenL, whlch refers Lo CorporaLe arenL 2
(lncludes 1/C of CorporaLe arenL 1, AppllcanL and Subsldlarles 1 - 4)
Group Lmp|oyment S|ze:
SummaLlon of LmploymenL slze of AppllcanL Company, CorporaLe arenL 1 - 2 and Subsldlarles 1 - 4
Ior the |||ustrated examp|e, assum|ng m and n >S0,
the Group w||| |nc|ude:
App||cant company, Corporate arent 1 - 2 and
Subs|d|ar|es 1 - 4
Group |nc|udes:
App||cant company A and
Example 1
2nd Level Up Individual shareholders Individual shareholders
100% 100%
1st Level Up
Company B
No. of staff: 10
Company C
No. of staff: 25
50% 50%
Applicant company A
Group sales: $50 mil
No. of staff: 50
100%
1st Level Down
Company D
No. of staff: 20
6
Group 1]C:
Croup ConsolldaLed 1/C of Company A = $30 mll
(lncludes 1/C of App||cant A and Subsldlarles D, L and I)
Group Lmp|oyment S|ze:
SummaLlon of L.S of App||cant and Subsldlarles D, L and I = 30 + 20 + 13 + 10 = 93
App||cant company A and
Subs|d|ar|es D, L and I
1st Level Down No. of staff: 20
70%
2nd Level Down
Company E
No. of staff: 15
80%
3rd Level Down
Company F
No. of staff: 10
Example 2
Individual shareholders
100%
4th Level Up
Company G
Group Sales: $95 mil
No. of staff: 10
Individual shareholders
100% 100%
3rd Level Up
Company E
No. of staff: 10
Company F
No. of staff: 5
80% 20%
2nd Level Up Individual shareholders
Company D
No. of staff: 10
100% 55%
7
Group 1]C:
Croup ConsolldaLed 1/C of Company G = $93 mll
(lncludes 1/C of CorporaLe arenLs C, D, L, App||cant and Subsldlarles n and I)
Group Lmp|oyment S|ze:
SummaLlon of L.S of CorporaLe arenLs C, D, L, G, App||cant and Subsldlarles n and I
= 20 + 10 + 10 + 10 + 23 + 3 + 13 = 93
Group |nc|udes:
App||cant company A, Corporate
parents C, D, L, G and
Subs|d|ar|es n and I
1st Level Up
Company B
No. of staff: 10
Company C
No. of staff 20
35% 65%
Applicant company A
No. of staff: 25
100% 100%
1st Level Down
Company H
No. of staff: 5
Company I
No. of staff: 15
Verification of Group annual sales
S/No. Applicant's Corporate Structure What to verify?
1
- No corporate shareholder holding
>50% shareholding
- No subsidiaries
Latest company sales of
Applicant
8
- No subsidiaries
2
- Has corporate shareholder holding
>50% shareholding
Latest Group sales of
Applicant's Ultimate Parent
3
- No corporate shareholder holding
>50% shareholding
- Has subsidiaries
Latest Group sales of
Applicant
1. Companies exempted from financial statements consolidation must
submit their individual financial statements and provide a
declaration and breakdown of its Group annual sales turnover.
Other points to note
9
10
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