WORLD TRADE  
ORGANIZATION  G/SCM/Q2/SGP/11 
27 April 2006 
 (06-1995) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
  
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1
 
of the GATT 1994 and Article 25 of the Agreement on  
Subsidies and Countervailing Measures  
 
Questions Posed by the UNITED STATES  
Regarding the Notification of SINGAPORE1 
 
  The following communication, dated 26 April 2006,  is being circulated at the request of the 
Delegation of the United States.  
_______________ 
 
 
General Comment  
 Singapore's notification states that it does not grant or maintain subsidies as defined in 
paragraph 1 of Article 1 which are specific within  the meaning of Article 2 of the Agreement on 
Subsidies and Countervailing Measures" ("Subsidies Agreement").  Publicly available information, 
however, indicates that Singapore maintains cer tain support programmes for which we request 
additional information.  
 Local Enterprise and Associati on Development Programme (LEAD
) 
 
 According to a publicly available report2, the LEAD programme will support up to 70 per 
cent of eligible costs for qualifying projects.  The support will be provided to SME's, which must have 
good export potential.   
 1. Could Singapore please explain how this pr ogramme is consistent with its obligations 
under Article 3.1(a) of the Subsidies Agreement? 
  2. Could Singapore explain why this progra m should not be subject to the notification 
obligations under Article 25 of the Subsid ies Agreement?  If this programme does 
meet the notification requirements, we ask that Singapore notify it in accordance with 
the provisions of Article 25 of the Subsidies Agreement. 
 
                                                     
 
1 G/SCM/N/123/SGP 
2 http://www.spring.gov.sg/porta l/products/assist/lead/lead.html  G/SCM/Q2/SGP/11 
Page 2  
 
  Double Tax Deduction For Market Development (DTD)
 
 
  According to a publicly available document3, the DTD scheme allows for approved companies 
to deduct against their taxable income twice the e ligible expenses incurred for approved projects and 
this incentive is targeted at companies whose prim ary purpose is to promote the trading of goods and 
aims to encourage Singapore companies to expand overseas markets.4 
  3. Could Singapore please clarify if this pr ogramme is contingent upon exportation?  If 
so, please explain how this programme is c onsistent with Singapore's obligations 
under Article 3.1(a) of the Subsidies Agreement? 
 
 4. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 
 5. Please explain whether this is the same  programme as the Double Tax Deduction for 
Local Trade Exhibition.  This programme encourages Singapore companies to expand 
their markets by participating in interna tional trade-oriented exhibitions held in 
Singapore.
5  If this is a different programme then please also answer questions 3 and 
4 above, for the Double Tax Deduction for Local Trade Exhibition.  
 
Major Exporter Scheme (MES)  
  It appears that under the MES program, GST registered businesses which export a majority of their goods ( i.e. major exporters
6) are not required to pay Goods and Service tax (GST) on imported 
goods at the point of importation. 
  6. Could Singapore please explain whether this GST exemption only applies to imports 
that are consumed in the productio n of the final exported product? 
  7. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 Regionalization Finance Scheme (RFS)
 
 
 According to publicly available information7, RFS is a fixed-cost financing programme 
designed to assist Singapore-based companies establish operations overseas.  Through the 
programme, the Government hopes to assist Singapore-based enterprises globalize their operations, sell in the global market place and leverage on global  resources to grow.  Furthermore, the overseas 
operations must complement the activities of the Singapore operations and result in economic spin-
offs to Singapore.
8   
  8. Could Singapore please provide the terms of the loans being offered? 
                                                     
 
3 http://www.business.gov.sg/incentives/dtd-mkt.htm  
4 www.a-star.edu.sg/astar/sciengr/action/sciengr_programme_get_up.do  
5 www.business.gov.sg/incentives/dtd-lte.htm 
6 export over 51 percent 
 7 http://www.iesingapore.gov.sg/events/index.jsp? vert=BZ&secfield=2&catfield=9&subfield=142  
 8 http://www.iesingapore.gov.sg/events/index.jsp? vert=BZ&secfield=2&catfield=9&subfield=64   G/SCM/Q2/SGP/11 
 Page 3 
 
 
   
 9. Could Singapore define the statement that the overseas operations must result in 
"economic spin-offs" to Singapore?  Please explain whether one of the economic spin-offs to Singapore would include incr eased exports of Singapore-made products. 
 
 10. Please clarify if this programme is conti ngent upon exportation?  If so, please explain 
how this programme is consis tent with Singapore's obligati ons under Article 3.1(a) of 
the Subsidies Agreement? 
  11. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 Enhanced Capability Development Scheme (ECADS)
 
  
 According to publicly available information9, this programme caters to the more complex and 
extensive development needs of Singapore enterprise s that are growing rapidly and seeking to break 
into new overseas markets.   12. Because this programme refers to Singapore companies breaking into new overseas 
markets, could Singapore please clarify if this programme is contingent upon 
exportation?  If so, please explain how this  program is consiste nt with Singapore's 
obligations under Article 3.1(a)  of the Subsidies Agreement? 
  13. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 Assistance to Biotechnology Industry 
 
 
 According to publicly available resources, the Government of Singapore will spend about 
12 billion Singapore dollars (US$7 billion) on the bi otechnology industry in the next five years and 
that it spent five billion dollars during the years 200 1 through 2005.  Singapore also built a research 
park at an estimated $300 million to promote the biotechnology industry.10  In addition, the 
government has also encouraged the growth of ne w local enterprises through programmes such as the 
Biomedical Sciences Innovate >N Create Scheme (BMS INC) whic h was launched in 2002.  Under 
this programme, companies can receive up to US$1. 1 million in seed capital toward the execution of 
their business plans.11    
 
 14. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in 
accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 
                                                      
 9 http://english.sccci.org .sg/index.cfm?GPID=363  
 10 "Singapore's Biotechnology Push" by Chan Sue Ling, International Herald Tribune, 
20 September 2005  
 11 "Realizing Potential: The State of Asian Bioentrepreneurship" from Nature Magazine, 21 April 2003 
and found at www.biomed-singapore.com\bms/sg/en_uk/index.  G/SCM/Q2/SGP/11 
Page 4  
 
  Initiatives in New Technology (INTECH)
 
 
 According to publicly available information, the Government of Singapore provides grants to 
companies to offset the costs of developing or introducing new capabilities in Singapore.  To qualify for grants under this programme, activities must le ad to the development or introduction of new 
capabilities including new technologies.
12 
  15. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in 
accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 Pioneer Incentive
 
  According to publicly available sources, th e pioneer incentive provides a tax exemption on 
qualifying profits for up to 15 years for eligible co mpanies.  The purpose of this programme is to 
encourage the introduction and growth of new and bette r industry technologies.  To be eligible for this 
program, the project must result in the creation of new or strategically expand existing industries in 
Singapore.
13   It appears that pioneer status is usua lly given to high-tech companies that introduce 
high-tech skills to the Singapore economy.14  
 
 16. Could Singapore please explain whether or not the pioneer incentive is usually 
provided to high-tech companies?  What percentage of companies qualifying for assistance under this programme during the notification period were high-tech companies. 
 
 17. Please explain the criteria used by Singa pore to determine eligibility for pioneer tax 
exemptions.  Please explain the criteria used by Singapore to determine the number of 
years of tax exemptions to provide to individual qualifying applicants. 
  18. Could Singapore explain why this progra m should not be subject to the notification 
obligations under Article 25 of the Subsid ies Agreement?  If this programme does 
meet the notification requirements, we ask that Singapore notify it in accordance with 
the provisions of Article 25 of the Subsidies Agreement. 
 Research Incentive Scheme for Companies (RISC)
 
 
 According to publicly available sources, the Research and Incentive Scheme for Companies 
provides partial grant support for qualifying costs re sulting from R&D projects.  The scheme aims to 
encourage companies to develop R&D capabilities in  strategic technology areas, and to support the 
company in increasing its industrial competitiveness over the long term.15 
  19. Could Singapore explain the eligibility criteria for this programme and what 
constitutes strategic technology areas? 
  20. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
                                                     
 
 12 www.sedb.com/edbcorp/sg/en_uk/startups/assistant_schemes  
 13 Id. 
 14 www.lowtex.net/lowtax/html/offon/singapore/sinsmi.html  
 15 www.biomed-singapore.com/bms/sg/en_uk/index/financial_support/grants/r_d_grant s   G/SCM/Q2/SGP/11 
 Page 5 
 
 
  programme does meet the notification requirements, we ask that Singapore notify it in 
accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
  Investment Allowance
 
 
 According to publicly available sources, eligib le companies may receive a capital allowance 
on qualifying equipment costs.  The qualifying equi pment must contribute to greater efficiency or 
introduce new technology to a Singapore industry.16    
  21. Could Singapore explain the eligibility cr iteria for this programme and explain what 
constitutes new technology? 
  22. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in 
accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 Development & Expansion Incentive (DEI)
 
  According to publicly available sources, e ligible companies may receive preferential 
corporate tax rates on all qualifying profit above a pre- determined base, for a set period.  In order to 
qualify for this programme, the project must gene rate significant economic spinoffs for Singapore.
17  
  23. Could Singapore explain the eligibility cr iteria for this program and define significant 
economic spinoffs for Singapore?  Also please explain whether significant economic spinoffs would possibly include increased export sales from Singapore. 
 
 24. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 
Startup Enterprise Development Scheme (SEEDS)
 
  According to publicly available sources, SEEDS provides equity financing for start-ups in the 
seed stage of enterprise formation.  Its objective is  to foster entrepreneurship and innovative activities 
in Singapore through matching financing by the government.
18  This support is provided to innovative 
enterprises.  To be eligible for assistance the pr oject should engage in the development of new or 
better processes that are innovative and have potential for global markets.19  
  25. It appears that qualifying projects must have potential for global markets; could 
Singapore please explain this requirement  for assistance under this programme?  
Please explain whether potential for global markets anticipates that only companies 
that will be exporting will be receiving assistance under this programme. 
  26. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
                                                     
 
 16 www.edb.gov.sg/edb/sg/en_uk/index/our_services/investors  
17 Id. 
18 www.business.gov.sg/incentives/fin-start.htm 
19 www.edb.gov.sg/edb/sg/en_uk/index/our_services/investors G/SCM/Q2/SGP/11 
Page 6  
 
  programme does meet the notification requirements, we ask that Singapore notify it in 
accordance with the provisions of Artic le 25 of the Subsidies Agreement.  
 Overseas Investment Allowance
 
 
 According to publicly available sources, th e purpose of the overseas investment allowance 
should be but is not limited to (1) the establishment of new marketing channels or the acquisition of 
existing marketing channels so as to increase production, export sales and services from Singapore 
and (2) invest in new technologies to enhance the company's Singapore operations.20 
 
 27. It appear that one of the reasons a co mpany will qualify for the overseas investment 
allowance is that the overseas investment  will establish new marketing channels in 
order to increase export sales from Singapore.  Please explain how this programme is consistent with Singapore's obligations  under Article 3.1(a) of the Subsidies 
Agreement? 
 
 28. Could Singapore explain why this pr ogramme should not be subject to the 
notification obligations under Article 25 of  the Subsidies Agreement?  If this 
programme does meet the notification requirements, we ask that Singapore notify it in accordance with the provisions of Artic le 25 of the Subsidies Agreement. 
 
__________ 
 
 
                                                     
 
20 www.iesingapore.gov.sg/events/index. jsp?vert=BZ&secfield=3&catfield=37