Singapore government has introduced several schemes to defray key insurance costs associated with operating a business. These insurance schemes act as a form of risk mitigation measure for the companies.
These schemes include:
- Loan Insurance Scheme (LIS)
- Political Risk Insurance Scheme (PRIS)
- Trade Credit Insurance Scheme (TCIS)
Loan Insurance Scheme (LIS)
The LIS supports companies via short-term trade loans. The loans are underwritten by commercial insurers, while a portion of the insurance premium is supported by the Government. This insures the creditors against the insolvency risks of the borrowers. The short-term trade loans could be made in the following categories:
- Inventory/stock financing facility
- Structured pre-delivery working capital
- Factoring/bill or invoice or accounts receivable discounting with recourse
Eligibility:
Companies should meet the following criteria:
- Registered and operating in Singapore
- At least 30% local shareholding
- Group annual sales of up to S$100 million or group employment size of not more than 200
Political Risk Insurance Scheme (PRIS)
The PRIS support companies venturing overseas with a 50% subsidy on political risk insurance premiums. The subsidy is up to S$500,000 per company. With PRIS, it reduces the credit risk and uncertainty over the outcome of the overseas project.
A typical PRI policy covers risks such as:
- Expropriation
- Currency inconvertibility and transfer restrictions
- Political violence
- Breach of contract by the host government
- Non-honouring of sovereign financial obligations
Eligibility:
Companies should meet the following criteria:
- Global HQ anchored in Singapore
- At least three strategic business functions in Singapore
- Annual sales turnover not exceeding S$500 million
- Annual total business spending of at least S$250,000 in Singapore for each of the past three years
- A minimum paid-up capital of S$50,000
Trade Credit Insurance Scheme (TCIS)
The TCIS insures the eligible company against counterparty risk such as non-payment by your buyers. The cost of insurance is defrayed with Enterprise Singapore supporting up to 50% of the minimum insurance premium for TCI policies provided commercially by Singapore-registered credit insurers. The lifetime support for each company is capped S$100,000.
Eligibility:
Companies should meet the following criteria:
- Global headquarters anchored in Singapore
- Turnover of Applicant Company and its subsidiaries should not exceed S$100 million
- A minimum paid-up capital of S$50,000
Interested businesses can approach a Singapore-registered TCIS insurer to structure and purchase their TCI policy. The insurer will assist the company in the submission of your application for TCIS premium support to Enterprise Singapore.