Tax-Deduction Scheme for Angel Investors

Tax-Deduction Scheme for Angel Investors

Photo by Steve Keys at http://www.flickr.com/photos/stevekeys/

This article on Tax-Deduction Scheme for Angel Investors was taken from The Straits Times as written by Francis Chan on 29 June 2010.

Read the following text on Tax-Deduction Scheme for Angel Investors:



ANGEL investments, a common and critical source of funds for local start-ups, are now tax-deductible.

Under a new initiative, individuals who make equity investments in fledgling firms can get a 50 per cent tax deduction on the amount after two years.

The Government hopes the new Angel Investors Tax Deduction Scheme, as the programme is called, will help generate $600 million worth of angel investments over the next five years.

'We hope that with the incentive, more angel investors will be encouraged to invest in innovative start-ups,' said Spring Singapore deputy chief executive Tan Kai Hoe.


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Investments Singapore

Venture Capital Investments Singapore

Venture Capital Investments Singapore

Investing Like An Angel - photo by ketutita at http://www.flickr.com/photos/ketutita

Venture capitalists or ‘angel’ investors are the high net worth individuals (loaded with cash, cash equivalent or unlimited credit lines) with the business acumen and financial circle connections who handle venture capital investments.

What are venture capital investments? According to wikipedia, venture capital (also known as VC or Venture) is provided as seed funding to early-stage, high-potential, growth companies and more often after the seed funding round as growth funding round (also referred as series A round) in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company.

To put it simply, let us illustrate it with the setting up a bubble tea stall as a simple analogy. As a venture capitalist looking to dominate the bubble tea market, you are the person with spare cash to burn, and high hopes of bringing your bubble tea empire to an initial public offering (IPO). Your venture capitalist instinct tells you to seek out a person (who lacks the capital but comes with the right passion, mindset, skills and knowledge of bubble tea-making technology) to set up bubble tea stalls, expand the brand throughout the country and bring in the financial returns, under your expert guidance and assistance of course. Sounds easy, isn’t it?

In reality, venture capital investments are much harder to source, and even harder to succeed. But when it does, the pay off can be extremely rewarding.

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