Business Finance

Business Finance
The tax deduction scheme for Angel Investors is a tax incentive scheme to encourage more investments from Angel investors. The scheme is effective for all the investments made from March 1^st 2010 to March 31^st 2015. Angel investors now get a 50% tax deduction on the total amount of investment after two years of making the investment.

There is however a lot of conditions to be pre qualified to gain such benefits of tax deduction. Firstly, the minimum amount of investment needed would be $100,000 to be a qualifying start-up. Secondly, the angel investments are to be met at an individual level compulsorily. This effectively means that investments cannot be made by corporate houses, institutions and other entities. These are not considered as eligible investments.

One can even offset the previous liabilities against the taxable income, but not against tax payable. An approved investor may have to wait for as long as 12 months before his status would be renewed. The interested investors could always apply afresh at the entrepreneurship development division of angel investors and get stared. Some documents may be needed to be submitted for approval, after which all the applications would be scrutinized and approved.

There are some other conditions which have to be fulfilled, to be eligible for the tax incentive scheme. Default in any of the guidelines would automatically disqualify the investor, for example: conditions for the investee company, mandatory board seat and advisory role, investment qualifications, holding period, reporting by the approved investor, etc. are some of the areas to be looked into and followed strictly.

Where can you find businesses to invest in? One resource of promising start-ups can be found from contacting participating partners of the Incubator Development Program. Or click here to enquire.

Original Article: 29 Jun 2010, Straits Times: Tax Deduction Scheme for Angel Investors