VCFI and Startup SG Tech are both part of the StartupSG ecosystem but serve opposite ends of the investment chain. This guide clarifies which scheme applies to your situation.
Read This First
- VCFI is for investors: VC fund managers seeking tax benefits on fund income
- Startup SG Tech is for founders: Tech startups seeking funding for technology development
- They work together: VCFI-approved funds often invest in Startup SG Tech recipients
- Different applications: Apply to VCFI through Enterprise Singapore, Startup SG Tech through accredited partners
Quick Decision Matrix
| VCFI | Startup SG Tech | |
|---|---|---|
| I manage a VC fund | ✓ | — |
| I founded a tech startup | — | ✓ |
| I want tax exemption on investment gains | ✓ | — |
| I need funding for PoC/PoV | — | ✓ |
| I have S$10M+ committed capital | ✓ | — |
| I have proprietary technology | — | ✓ |
| I want to invest in SG startups | ✓ | — |
| I need to validate my technology | — | ✓ |
| I have a MAS license | ✓ | — |
| I own IP/IA for my product | — | ✓ |
Legend: ✓ = Applicable | — = Not applicable
At a Glance
| VCFI | Startup SG Tech | |
|---|---|---|
| Target audience | VC fund managers | Tech startup founders |
| Benefit type | Tax exemption | Grant funding |
| Amount | Tax exempt (up to 15 years) | Up to S$500K |
| Minimum threshold | S$10M committed capital | No minimum capital |
| Key requirement | LBS + SG investment % | Proprietary technology |
| Duration | Fund life (max 15 years) | Project-based milestones |
| Administering body | Enterprise Singapore | Accredited partners |
| Application timing | Before fund final close | Early development stage |
How VCFI and Startup SG Tech Connect
| Who Benefits | Scheme | |
|---|---|---|
| 1 | VC fund raises capital | VCFI |
| 2 | Startup develops technology | Startup SG Tech |
| 3 | VC invests in startup | Both benefit |
| 4 | Startup scales, VC exits | VCFI tax exemption |
Key insight: VCFI-approved funds are incentivized to invest in Singapore startups. Startups that graduate from Startup SG Tech become attractive investment targets for these funds.
Decision Flow
Step 1: Are you an investor or a startup?
What's your primary role in the startup ecosystem?
Step 2: What do you need?
VCFI
Tax benefits on fund returns
Tax exemption on qualifying income for up to 15 years
- VC fund launching in Singapore
- Existing fund seeking tax optimization
- Fund manager with MAS license
Startup SG Tech
Funding to validate technology
Milestone-based funding for PoC and PoV development
- Deep tech prototype development
- AI/ML product validation
- Biotech feasibility studies
Different entities apply separately
Both investment and technology support
Your fund applies for VCFI; your portfolio company applies for Startup SG Tech
- Fund invests in Startup SG Tech recipient
- Portfolio company seeks additional grant support
Eligibility Requirements
VCFI Requirements
| Requirement | Details |
|---|---|
| Entity type | VC fund (LP, Company, or VCC structure) |
| Minimum fund size | S$10M committed capital at application |
| Local Business Spending | S$100,000 × incentive tenure (cumulative) |
| Investment mandate | % into unlisted Singapore-based companies by year 5 |
| Application timing | Before final close of fund |
| MAS license | Required for fund management |
Startup SG Tech Requirements
| Requirement | Details |
|---|---|
| Entity type | Singapore-registered startup |
| Shareholding | At least 30% local shareholding |
| Technology | Proprietary technology with commercial potential |
| Stage | Early-stage (PoC or PoV development) |
| IP ownership | IP/IA should be owned by the startup |
| Business model | Technology-driven |
Common Scenarios
- “I’m raising a VC fund to invest in Singapore startups” — Apply for VCFI before your fund’s final close. Tax exemption applies to qualifying income for up to 15 years.
- “I’m building an AI product and need funding for prototyping” — Apply for Startup SG Tech through an accredited partner. Funding is milestone-based.
- “My fund already invested in a Singapore startup” — If you have VCFI, gains from Singapore startup investments may qualify for tax exemption.
- “I’m a startup founder looking for VC investment” — Use Startup SG Tech for product development. VCFI funds are incentivized to invest in you.
- “I’m both an investor and a founder” — Your fund entity applies for VCFI; your startup entity applies for Startup SG Tech. Keep them separate.
Funding Comparison
| VCFI | Startup SG Tech | |
|---|---|---|
| What you receive | Tax exemption | Grant funding |
| Cash impact | Reduced tax liability | Direct cash for project |
| Timing | At exit/distribution | Milestone completion |
| Repayment | No (tax benefit) | No (grant, not loan) |
| Compliance | LBS, investment % | Project milestones |
Before You Apply
For VCFI:
- Ensure S$10M committed capital before application
- Structure fund as LP, Company, or VCC
- Plan Local Business Spending commitment
- Define Singapore startup investment strategy
- Apply before final close of fund
- Contact SSG_Investor_VCFI@enterprisesg.gov.sg
For Startup SG Tech:
- Confirm proprietary technology ownership (IP/IA)
- Ensure 30% local shareholding
- Define clear PoC or PoV milestones
- Prepare technology documentation
- Contact an accredited Startup SG partner
- Apply during early development stage
Related Guides
- FMI vs VCFI Decision Matrix — Fund manager tax vs fund tax incentives
- EDBI vs VCFI Decision Matrix — Direct investment vs fund incentives
- Startup SG Decision Matrix — Overview of all Startup SG programmes
- Grant Pitfalls Guide — Common mistakes to avoid
- Singapore Grants Glossary — Key terms explained
- Venture Capital Fund Incentive — Full VCFI scheme details
- Startup SG Tech — Full Startup SG Tech scheme details
Official Links
- VCFI/FMI: StartupSG — VCFI official information
- Startup SG Tech: Enterprise Singapore — Startup SG Tech official page
- StartupSG — Singapore startup ecosystem portal
- Enterprise Singapore — Administering agency
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