Employees of qualifying start-up companies will enjoy a 75 percent tax exemption on gains from stock options or share ownership plans under the Equity Remuneration Incentive Scheme (ERIS). ERIS will be available between February 16, 2008 and February 15, 2013.
The main provisions of ERIS are as follows:
- Exemptions will be capped at SGD 10 million (USD 7.1 million) of qualifying gains over a period of 10 years.
- A qualifying employee is one who works for at least 30 hours a week and does not own more than 25 percent of the shares of the company.
To qualify, companies need to:
- Be incorporated and conducting business in Singapore.
- Have gross assets with a market value of SGD 100 million (USD 71 million) or less.
- Have a maximum of 20 individual shareholders, one of whom owns 10 percent or more of the company’s issued ordinary shares.
- Have offered stock options or share ownership plans to their employees within three years of incorporation.