Detailed Introduction to the Intellectual Property Development Incentive (IDI) (Singapore Incentive Policy)

The Intellectual Property Development Incentive (IDI) is an incentive measure launched by the Singapore Economic Development Board (EDB), aimed at encouraging enterprises to use and commercialize intellectual property (IP) generated from research and development (R&D) activities. Through this scheme, enterprises can obtain preferential corporate income tax rates, reducing the tax burden associated with IP development and commercialization, thereby promoting the market application of innovative results and technology transfer.

1. Background and Objectives of the IDI Scheme

With intensifying global economic competition, intellectual property has become an important asset for enterprises to maintain competitive advantages and drive technological innovation. The IDI scheme enhances corporate competitiveness in the global market and promotes Singapore's transformation toward a knowledge-based economy by encouraging enterprises to manage, use, and commercialize IP generated from R&D in Singapore. This scheme not only supports corporate technological innovation but also incentivizes enterprises to engage in long-term IP development and utilization.

2. Content of Preferential Policies

Tax Incentives:
Qualifying enterprises can enjoy preferential corporate income tax rates on income from specific intellectual property arising from R&D activities. Depending on the scale and level of technological innovation of the project, the tax rate is typically 5% or lower, far below Singapore's standard 17% corporate income tax rate. Covered IP income includes:

Royalties and licensing income generated from intellectual property in the form of patents, copyrights, and industrial design rights.
Technical service fees or licensing fees related to intellectual property.
Revenue from the sale and commercialization of intellectual property.

Policy Scope:
The IDI scheme applies to enterprises across various industries, especially high-tech companies with strong R&D foundations. Covered IP types include but are not limited to patents, copyrights, industrial design rights, and trademarks.

3. Application Requirements

Enterprises applying for the IDI scheme must meet the following conditions:

The intellectual property must be generated from R&D activities conducted by the enterprise in Singapore, or existing intellectual property that has been significantly improved and developed by the enterprise.
The enterprise must conduct IP management and commercialization activities in Singapore, such as production, licensing, or technical services.
The enterprise must submit a detailed commercialization plan, explaining how the IP will be applied and the expected economic benefits.
Income related to the intellectual property must meet the value-added conditions specified by IDI policy, such as contributions to the local economy or technology transfer effects.

4. Advantages of the IDI Scheme and Enterprise Benefits

Through the IDI scheme, enterprises can obtain the following benefits:

Reduced tax burden: Enjoying preferential tax rates on IP-related income helps alleviate the financial pressure on enterprises and increases investment in innovation and technology development.
Promoting technology transfer and commercialization: The IDI scheme encourages enterprises to transform R&D results into marketable technologies or products, enhancing commercial value.
Enhancing global competitiveness: Through effective management and commercialization of innovative results, enterprises can occupy more favorable positions in international markets and expand their business footprint.

5. IDI's Role in Promoting Singapore's IP Development

The IDI scheme not only supports enterprises in commercializing intellectual property but also plays an important role in building Singapore's overall innovation ecosystem:

Promoting sustainable development of R&D and innovation: By encouraging enterprises to commercialize R&D results, the IDI scheme helps accelerate technological innovation and the market introduction of new products.
Enhancing Singapore's position as an IP management center: The IDI scheme has attracted more enterprises to establish IP management and commercialization centers in Singapore, strengthening Singapore's influence in the global IP management field.
Supporting the development of high value-added industries: Particularly in biomedicine, information and communication technology, advanced manufacturing, and green technology sectors, IDI helps accelerate the application of technological innovation and promotes industrial upgrading.

6. Application Process

The steps for enterprises to apply for the IDI scheme typically include the following aspects:

Submit preliminary application: Enterprises submit a preliminary application regarding intellectual property to the Singapore Economic Development Board (EDB), including IP type, source, and expected commercialization returns.
Prepare detailed commercialization plan: Enterprises need to provide a commercialization plan outlining how to manage and apply the IP, as well as the planned value-added effects.
EDB evaluation and review: The Singapore Economic Development Board will review the enterprise's application, evaluating the project's level of innovation, commercialization potential, and contribution to Singapore's economy.
Sign agreement and implement plan: Once approved, the enterprise will sign an agreement with EDB and proceed with IP management and commercialization according to the plan.

The Intellectual Property Development Incentive (IDI) is an important incentive policy in Singapore to encourage enterprises to promote technological innovation and IP commercialization. By providing tax incentives to qualifying enterprises, IDI lowers the threshold for commercializing innovative results and motivates enterprises to increase investment in R&D and technology development. This scheme not only enhances corporate competitiveness but also promotes the development of Singapore's overall knowledge-based economy, providing strong support for the growth of high value-added industries. Enterprises can leverage the IDI policy to transform innovative results into market competitiveness, helping them achieve greater breakthroughs in international markets.