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Singapore Plugs Its Credentials As Asian IP Hub

by Mary Swire, Tax-News.com, Hong Kong

16 July 2012


In a speech to a seminar in Singapore, also attended by Francis Gurry, Director-General of the World Intellectual Property Organisation, Singapore’s Minister for Trade and Industry Lim Hng Kiang emphasized its qualities as an Asian intellectual property (IP) hub, particularly the tax benefits provided through the Productivity and Innovation Credit (PIC).

The Minister pointed out that, between 2001 and 2011, the number of patent filings increased by 20%, while trademark filings soared by 72%. Royalty and license fee payments in Singapore also grew from USD9bn in 2006 to USD15.6bn in 2010 – almost doubling despite the economic downturn in 2009. In the Asia Pacific region, Singapore is ranked third, after Japan and China, in such fees.

He stressed that innovation is an important part of Singapore’s economic strategy, to stay ahead of global competition. Prime Minister Lee Hsien Loong has announced that Singapore will be investing SGD16.1bn (USD12.7bn) to support research, innovation and enterprise activities between 2011 and 2015 - a 20% increase over the budget allocated for 2006 to 2010.

The government has put in place programmes to help businesses better leverage their IP for increased competitive advantage and to develop new products, services and revenue streams. The IP programme for small and medium-sized enterprises (SMEs) was launched in 2007 to help SMEs develop IP strategies that would increase their business competitiveness under the guidance of IP consultants. To date, that programme has supported more than 400 projects with a projected economic value-add of more than SGD780m.

To further assist businesses, the IP for Internationalization Programme has been developed to help Singapore-based companies develop IP management strategies as they expand overseas.

In particular, he added, the government has introduced tax benefit schemes to support companies in their IP management efforts. In particular, the PIC allows businesses to be eligible for tax deductions to offset expenses incurred for IP registration and acquisitions.

In the 2012/13 Budget announced in February this year, the PIC has also been enhanced to provide a 60% cash pay-out for up to SGD100,000 of firms’ PIC expenditures. This means a SGD60,000 pay-out from the government, compared with the SGD30,000 given previously. It will be especially useful to companies with limited taxable income, which would not be able to benefit fully from the existing PIC tax deduction.

Businesses are also able to obtain their cash pay-outs faster to help with their cash flow, as, from July 1, 2012, they have been available on a quarterly basis, rather than annually; and PIC benefits will be granted for annual in-house training costs of up to SGD10,000, which will cover the majority of training initiatives by smaller companies.

The Minister noted that Singapore’s reputation for a robust IP regime has not only facilitated the growth of local businesses, but also given global IP firms the confidence to choose Singapore as their base for long-term investments in research and innovation activities. These firms include Procter & Gamble, Rolls-Royce, Bayer and Thomson Reuters.

As a consequence, the World Economic Forum's Global Competitiveness Report 2011/2012 ranked Singapore second in the world and top in Asia in terms of IP protection. The Political & Economic Risk Consultancy Report 2011, as well as the International Property Rights Index 2012 has similarly ranked Singapore top in Asia for its IP protection efforts.

Together with developments in its patent regime and IP dispute resolution capabilities, Singapore, he concluded, aims to build on this good foundation and develop Singapore as an IP hub of Asia.

To further that end, an IP Steering Committee has been set up to look into growing Singapore as a marketplace to transact and commercialize IP, with world-class IP capabilities and infrastructure. The Committee comprises members from both the private and public sectors with expertise in IP, and he looked forward to their recommendations by early 2013.

TAGS: tax | business | trademarks | patents | royalties | training | law | intellectual property | budget | Singapore | fees | tax credits | small and medium-sized enterprises (SME) | trade | services

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