Enterprise Innovation Scheme (EIS): A Complete Guide for Singapore Businesses
The Enterprise Innovation Scheme (EIS) helps Singapore businesses innovate, grow and reduce costs tied to capability-building and strategic investments. Introduced in Singapore’s Budget 2023, this initiative allows eligible companies to claim enhanced tax deductions or convert qualifying expenses into a cash payout — boosting innovation without straining cash flow.
What Is the Enterprise Innovation Scheme?
The EIS is a government incentive that encourages companies to spend on activities that build innovation and competitiveness. Instead of offering a single fixed benefit, EIS gives businesses flexibility:
- Up to 400% tax deductions on qualifying expenditures
- Option to convert spend into cash payout of up to $20,000 per Year of Assessment (YA)
- Applicable for YA 2024 through YA 2028
Eligible activities include research and development, workforce training, intellectual property (IP), and collaborative innovation projects with educational or research institutions.
Who Can Apply?
EIS is available to businesses registered and actively trading in Singapore, including:
- Companies
- Sole proprietorships
- Partnerships
- Registered branches or subsidiaries of foreign firms
To qualify for the cash payout, additional conditions include maintaining CPF contributions for a minimum number of local full-time employees.
Qualifying Activities Under EIS
The scheme supports five types of expenditure:
- Research & Development (R&D) – Local R&D activities aimed at improving products, processes, or services.
- IP Registration – Costs associated with registering patents, trademarks, or designs.
- IP Acquisition & Licensing – For eligible businesses acquiring or licensing IP rights (subject to eligibility criteria).
- Training Programmes – Business-related upskilling courses approved by SkillsFuture Singapore and aligned with the Skills Framework.
- Innovation Projects with Institutions – Collaborative projects with local institutions, such as polytechnics or Institutes of Technical Education (ITE).
Tax Deductions vs Cash Payout
Tax Deductions
Businesses can claim up to 400% tax deduction on qualifying expenses per activity — effectively lowering taxable income for that year.
Cash Payout
If your company doesn’t have sufficient taxable income, you may convert qualifying spend into a non-taxable cash payout of 20% on up to $100,000 of eligible expenses (maximum $20,000 per YA).
You must choose either the enhanced tax deduction or cash payout for each expense — the same cost can’t be claimed twice.
How to Apply for EIS
To claim benefits under EIS:
- Organise supporting documents such as invoices, contracts, training attendance records, and CPF contributions.
- Declare your eligible expenditure during your income tax submission.
- Submit claims through the IRAS myTax Portal for either tax deductions or the cash payout option.
- Only one consolidated claim per Year of Assessment is allowed, so ensure you include all qualifying items.
Best Practices to Maximise Your Claim
- Track spending separately by activity category to stay within annual caps.
- Exclude amounts subsidised by other grants (e.g., SkillsFuture Enterprise Credit) before claiming under EIS.
- Keep accurate supporting documentation for potential review by IRAS.
- Plan training and R&D budgets ahead of time to ensure eligibility.
Training Providers That Qualify for EIS
One of the most accessible ways to benefit from EIS is through qualifying workforce training programmes. Courses must be:
- Approved by SkillsFuture Singapore
- Aligned with the Skills Framework
- Relevant to your business operations
Training partner you may consider:
- WLP Academy – Offers industry-aligned courses that can help your team build practical digital accounting skills in Xero, leadership, tax and financial/accounting skills while meeting EIS training eligibility.
Investing in training not only upskills your workforce but also helps you maximise claims under the EIS.
Final Thoughts
The Enterprise Innovation Scheme is an invaluable tool for Singapore businesses aiming to accelerate growth, improve capabilities, and manage costs tied to innovation. Whether through enhanced tax deductions or an immediate cash payout, EIS makes strategic investments more affordable.
To unlock these benefits, carefully plan your qualifying activities — especially training — and work with trusted providers like WLP Academy to ensure your programmes meet EIS criteria.