Most founders treat a Singapore government grant as won the moment they receive the Letter of Offer (LOO). That’s a mistake. Getting the grant approved is roughly 40% of the work. The other 60% — submitting claims, hitting milestones, complying with audit requirements, and avoiding clawback — is where most companies stumble. Late or incorrect claims are a common reason businesses end up funding what should have been a subsidised project entirely out of their own pocket.
This guide walks through everything that happens after the LOO arrives: claims submission, post-grant compliance, audit preparation, and the realistic risks that founders need to manage.
The Letter of Offer: Read It Twice, Then Read It Again
The Letter of Offer is a legally binding contract. Before signing and accepting, you must understand exactly what you’ve signed up for:
- Supportable Project Costs (SPC). The categories of cost that qualify — manpower, third-party services, software, equipment, IP rights. Anything outside the SPC list is not claimable.
- Funding rate. Typically 50% for SMEs under EDG, up to 70% for PSG, varying by programme.
- Maximum grant quantum. A cap regardless of project spend.
- Project milestones and timeline. Almost always 12 months from project start.
- Disbursement schedule. Some grants pay in tranches against milestones; others reimburse only after project completion.
- Claw-back conditions. What happens if you fail to deliver — partial or full repayment, sometimes with interest.
If the LOO terms surprise you, do not sign yet. Request clarifications in writing from the Enterprise Singapore (or relevant agency) officer.
For a refresher on which grant suits which project, see our guide on EDG vs PSG vs MRA.
Phase 1: Project Commencement
The clock starts ticking on the project start date stated in the LOO. From day one:
1. Set Up Project Cost Tracking
Every dollar you intend to claim must be:
- Incurred within the approved project period (no pre-project expenses)
- Paid (not just invoiced) before the claim submission
- Supported by a tax invoice, receipt, and proof of payment (bank transaction)
- Categorised against an approved Supportable Project Cost line item
Set up a dedicated project cost code in your accounting system from day one. Retro-fitting cost tracking three months later is painful and error-prone.
2. Engage Approved Vendors Only
For PSG grants, only pre-approved vendors and their pre-approved solutions are claimable. If you’ve signed an LOO for a CRM solution from a specific vendor, switching to a different CRM mid-project disqualifies the spend.
For EDG grants, vendors must be approved separately if not already in the eligible list — typically via a “Vendor Endorsement” before engagement.
3. Maintain a Project Log
Keep a chronological log of project activities, deliverables, and stakeholder meetings. This becomes critical during the final claim review.
Phase 2: Submitting Claims
Most grants operate on a reimbursement basis. You spend first, then claim. The standard claim submission flow is:
Step 1 — Submit via the Business Grants Portal (BGP)
Most Enterprise Singapore grants run through the Business Grants Portal at bgp.gov.sg. Log in with CorpPass.
Step 2 — Prepare the Claim Documentation
For each cost line item, you need:
- Tax invoice from the vendor
- Proof of payment — bank statement entry, GIRO confirmation, or cleared cheque
- Project deliverable evidence — software access screenshots, equipment photos with project labels, deliverable reports
- For manpower costs: employment contracts, payslips, CPF statements, and time-tracking logs if claiming partial time
Step 3 — Submit Within the Claim Window
Most grants give 6 months from project end to submit the final claim. Some allow interim claims. Missing the claim window is fatal — the grant lapses and is not recoverable.
Step 4 — Respond to Queries
The claim officer will typically come back with queries: missing evidence, classification disputes, or eligibility questions. Respond within the stated window (usually 7–14 days). Failure to respond is treated as withdrawal.
Phase 3: Audit and Verification
For claims above a certain threshold (typically S$100,000 in grant amount), an independent auditor must verify the claim before payment. The audit covers:
- Verification that costs were incurred within the project period
- Cross-checking invoices against bank statements
- Confirmation that deliverables match the approved project scope
- Manpower allocation — were employees actually working on the grant project the % of time claimed?
- Vendor independence — vendors must not be related parties
The auditor’s report goes to the agency along with the claim. Audit fees are typically not claimable under the grant itself — budget S$2,000–S$5,000 for the audit out of pocket.
Phase 4: Post-Disbursement Compliance
Once the grant is disbursed, you’re not done. Most grants include post-project obligations:
- Outcome reporting. Annual reporting of how the grant outcome (revenue, productivity, new markets) has materialised — typically for 2–3 years post-project.
- Asset retention. Equipment or IP acquired with grant funding cannot be sold or transferred for a stipulated period.
- Continued operations. Your business must remain operational and Singapore-domiciled.
Selling the business, moving it offshore, or shutting down within the stipulated period can trigger partial or full grant clawback.
The Most Common Reasons Claims Are Reduced or Rejected
- Expenses outside the project period — pre-project planning costs, post-deadline payments.
- Incorrect supplier — used a different vendor than the one in the LOO without a vendor amendment.
- Missing proof of payment — invoice exists but no bank statement showing settlement.
- Manpower over-claim — claimed 100% of an employee’s time when the employee was clearly working on other projects too.
- Related-party transactions — paid an invoice to a company you also own.
- GST inclusion — claimed the GST portion of a cost when the grant only covers GST-exclusive amounts.
- Deliverable not matching scope — built a different feature than what was approved.
Multi-Grant Stacking: Compliance Multiplied
If you are stacking multiple grants (e.g. EDG + SFEC + PSG), you must avoid double-claiming the same cost. The same dollar of vendor spend can only be claimed once. Set up clear cost-coding and reconcile claims across grants before submitting.
For a deeper dive on stacking, see our multi-grant strategy guide.
Tax Treatment of Grants
Singapore grants are not automatically tax-exempt. Their treatment depends on the grant’s nature:
- Operating expense grants (e.g. wage support, training subsidies) — generally taxable as income, but the corresponding expense is deductible, so net effect is neutral.
- Capital grants for equipment — typically not taxable but reduce the capital allowance base.
- R&D grants — specific treatment under the R&D tax framework.
For tax filing implications, see our Form C-S vs Form C guide.
How Raffles Corporate Services Helps
We support our clients through the full grant lifecycle:
- Pre-claim documentation review — making sure the evidence file is complete before submission
- Claim preparation and BGP submission
- Coordination with the independent claim auditor
- Outcome reporting and post-disbursement compliance reminders
- Tax treatment advice for the grant in your annual corporate tax return
The official grant portal is at enterprisesg.gov.sg with claim submissions via businessgrants.gov.sg. For complementary content on Singapore business operations, see our sister site Singapore Secretary Services.
— The Editorial Team, Raffles Corporate Services