Venturing a new market in Vietnam can be risky and costly. Thus, it is advisable for Singaporean enterprises to make optimum use of Market Readiness Assistance (MRA Grant) or Market Research grant to grow their businesses. This article provides you with an overview of MRA or Market Research, the requirements, and the advantages of using the MRA. Let’s check this out!
Overview of Market Readiness Assistance (MRA) or Market Research
In the globalization era, it is inevitable to expand your business to the overseas market, and we all know that venturing into a new foreign market can be daunting and costly.
Thus, Enterprise Singapore (ESG), a governmental agency under the purview of the Ministry of Trade and Industry, has introduced the MRA or Market Research grant to provide funding and financial support, also information for local enterprises, especially SMEs who wish to internationalize and grow their businesses.
Before getting into deep, we need to know first, what MRA is. Market Readiness Assistance or we can say MRA is a funding program offered by Enterprise Singapore to help Singapore incorporated companies to enter the overseas markets by providing financial assistance. This includes support for the overseas market set-up, overseas business development, and overseas marketing promotion.
If your business is SME, you can get an international boost with the MRA grant to help take your business overseas.
Up to 70% of eligible costs, capped at S$100.000 per company per new market, from 1 April 2020 to 31 March 2023 that covers:
- Overseas market promotion (capped at S$20.000)
- Overseas business development (capped at S$50.000)
- Overseas market set-up (capped at S$30.000)
Each application is limited to one activity in a single overseas market, for example, market entry, or participation in a trade fair.
The Requirements of Getting MRA Grant for Singaporean Investors
To get MRA for Singaporean enterprises, your business should meet these criteria:
- Business entity is registered or incorporated in Singapore.
- New market entry criteria, for example, target overseas countries whereby the applicant has not exceeded S$100.000 in overseas sales in each of the last three preceding years.
- At least 30% local shareholding.
- Group Annual Sales Turnover of not more than S$100 million, or Company’s Group Employment Size is not more than 200 employees.
The eligible employers who meet the criteria can also qualify for additional subsidies under the SkillsFuture Enterprise Credits (SFEC) scheme:
- Have contributed at least S$750 Skills Development Levy over the qualifying period.
- Have employed at least three Singapore Citizens or Permanent Residents every month over the same period.
- Have not been qualified for SFEC at any of the earlier periods.
To apply for the MRA, you also need to follow the application steps:
- Cost Quotations
Firstly, the applicant should request quotations for all the qualifying activities that they are considering to adopt from a third-party vendor, such as a business consultancy company or PR agency.
- Business Grant Portal
After having the estimated costs for the activities, your company can submit the application along with the quotation through the Business Grant Portal, a platform for businesses to apply for government grants.
The MRA grant can only be distributed on a reimbursement basis. All claims can only be done after the applicant received an offer letter from ESG. The timeline for the claims is limited within three months of the project end date.
However, a company that wishes to apply for the grant cannot engage in any agreement, make initial payment or deposit as well as initiate a project with the third-party consultant at the point of the application. The claiming project also can be done through the Business Grant Portal.
The Benefits of Singapore’s MRA Grant for Singaporean Investors to Venture in Vietnam
In February 2020, Singapore announced the additional budget for the MRA grant, also its extended timelines and upgraded grant schemes. It is good timing for Singaporean investors who want to venture a business internationally, especially in Vietnam.
Since the government poured more budget, there are clearly some benefits for Singaporean investors for MRA grants.
The newly implemented incentives are:
1. Enhanced Financial Support
Under the latest MRA grant, a few financial incentives are boosted to better support local companies in their overseas ventures. In fact, the limitation of the MRA grant application has been lifted. The companies are now allowed to submit more than two applications in a year. However, the rule of each grant remains the same, and each application can only cover one activity. Additionally, the unused grant cannot be carried forward to the following year.
Besides the elimination of the application quota, the monetary support level for projects and expansion activities remains at 70%, and the deadline for this incentive has been extended by three more years to March 31, 2023. The maximum grant for this financial support has also been increased from S$20.000 each year, to S$100.000 per new market over the three years.
Hopefully, these upgraded incentives will largely reduce the financial issues of local companies setting up businesses in Vietnam.
2. Wider Coverage of Activities
The targeted activities can be categorized into four key areas.
- Business set-up in the overseas market.
It expenses related to market entry assessment, such as advisory, legal and documentation costs.
- The third-party costs incurred
It identifies overseas business partners through business matching.
- The overseas market promotion
The activities such as marketing, PR, trade show space rentals, and forth, are also considered as qualifying activities under the MRA grant.
- Consultancy services namely in-depth Free Trade Agreement (FTA)
It helps companies to have better leverage for FTAs in target markets and in-market business development consultancy services. In addition, it identifies and deploys suitable employees to hold business expansion activities in the target market, and it has been included in the list of supportable activities as well.
Singaporean investors should not be too worried about venturing into a new market to Vietnam, as long as they prepare for everything. In conclusion, with this MRA grant, you do not need to worry much about the financial, and can expand your business into the overseas market.