What Is the Enterprise Innovation Scheme (EIS) and How Does It Work?

The Enterprise Innovation Scheme is giving Singapore businesses a new way to stay competitive and get rewarded for it. Singapore moves fast. Your competitors move fast, and your customers change their expectations even faster.

So if you’ve been thinking about building new capabilities, improving how your teams work, or upgrading the skills in your business, you’re not alone. The real question is, how do you do it without blowing your budget?

That’s where the Enterprise Innovation Scheme (EIS) comes in. It’s built to support businesses that invest in key areas like training, Research and Development (R&D), and intellectual property. If you understand how to claim it properly, you can reduce the cost of moving forward and make smarter bets on what your business needs next.

Let’s break down how it works and why getting it right could reshape how your business grows over the next few years.

Quick Takeaways

• The Enterprise Innovation Scheme offers 400% tax deductions or a $20,000 annual cash payout.
• Eligible activities include R&D, IP registration, training, licensing, and institutional innovation projects.
• Businesses must be tax-resident in Singapore and actively carrying on trade to qualify.
• Cash payout requires CPF contributions for three local full-time employees for at least six months.
• Submit one complete EIS claim per Year of Assessment through IRAS with proper supporting documents.

Table of Contents

• What Is the Enterprise Innovation Scheme
• Who Qualifies for EIS
• What Activities Are Covered Under EIS
• Tax Deductions vs Cash Payout: What’s the Difference
• How to Apply for EIS
• Best Practices for Claiming EIS
• Maximise EIS Training Claims With Vertical Institute
• FAQs About the Enterprise Innovation Scheme
• Take the Next Step With Vertical Institute

What Is the Enterprise Innovation Scheme?

The Enterprise Innovation Scheme (EIS) is a government-backed initiative to help Singapore businesses strengthen their capabilities in a changing economy. Launched in Budget 2023, the scheme supports businesses investing in areas like R&D, workforce training, and intellectual property.

Rather than offering one fixed benefit, EIS gives businesses a choice: reduce taxable income through enhanced deductions or receive a partial cash payout to offset upfront costs. This flexibility benefits both established firms and those still managing tight budgets.

Here’s what the scheme offers at a glance:

• Applies to qualifying expenditure from Year of Assessment (YA) 2024 to YA 2028
  
• Covers five categories: R&D, training, IP registration, IP acquisition/licensing, and innovation projects with institutions
  
• Offers up to 400% tax deduction per category, capped at $400,000
  
• For innovation projects with institutions, the cap is $50,000
  
• Allows up to $100,000 of spending to be converted into a cash payout (20% rate), capped at $20,000 per YA
  
• Open to companies, partnerships, and sole proprietors carrying on active business in Singapore
  

These enhanced deductions come on top of existing tax benefits. With careful planning, businesses can unlock substantial savings or cash support, just by claiming what they already spend on growth.

Next, let’s look at who qualifies for EIS and what you’ll need in place before making a claim.

Who Qualifies for EIS?

The Enterprise Innovation Scheme is available to businesses operating in Singapore that incur eligible expenditure during the basis period of a qualifying Year of Assessment (YA). But eligibility also depends on whether you’re claiming enhanced tax deductions or opting for the cash payout.

You’re eligible to participate in the scheme if your business is registered in Singapore and falls under one of the following:

1. Company (including business trusts treated as companies for tax purposes)
   
2. Sole proprietorship
   
3. Partnership
   
4. Registered branch or subsidiary of a foreign entity
   

To qualify for enhanced tax deductions or allowances, you’ll need to:

• Be actively carrying on a trade or business in Singapore
  
• Incur qualifying expenditure during the relevant YA
  
• File your income tax return before the deadline
  

To qualify for the cash payout option, the business must meet additional conditions:

• Employ at least three full-time local employees (Singapore Citizens or PRs earning ≥ $1,400/month and working ≥ 35 hours/week)
  
• Make CPF contributions for these employees for at least six months during the basis period
  
• Ensure the business is still active at the time of payout disbursement
  

Some business types are excluded from receiving the EIS cash payout, such as:

• Investment holding companies
  
• Charities, clubs, and associations
  
• Entities that have ceased business (e.g. struck off or in liquidation)
  

Meeting these conditions is essential before moving forward with a claim. Once eligibility is confirmed, the next step is understanding what types of business activities are covered under EIS and how each one can benefit you.

What Activities Are Covered Under EIS?

The EIS covers five types of qualifying activities. Each one supports a different part of the innovation and capability-building process, from developing new ideas to upskilling your team.

1. Research & Development in Singapore

Eligible R&D must be carried out in Singapore and can relate to creating or improving products, services, or processes. You can claim for staff costs, consumables, and outsourced research (up to 60% of third-party fees, if substantiated). This category is capped at $400,000 per YA.

2. Registration of Intellectual Property

If you’re registering patents, trademarks, or designs, you can claim on both official and professional fees. The IP must remain legally and economically owned by the Singapore-based business. Even if the registration is unsuccessful, costs can still qualify. This activity also has a $400,000 annual cap.

3. Acquisition and Licensing of Intellectual Property Rights (IPRs)

For businesses with annual group revenue under S$500 million, licensing or acquiring IP rights (excluding software) may qualify. These rights must be used in your trade and not licensed from a related party. Deductions are capped at $400,000 per YA.

4. Qualifying Training

This is one of the most accessible categories. You can claim for course fees, assessment costs, and certification for SkillsFuture Singapore–approved training that aligns with the Skills Framework. Corporate training partners like Vertical Institute qualify, provided it’s business-related and not self-funded. Deductions are also capped at $400,000 per YA.

5. Innovation Projects with Institutions

If you collaborate directly with an institution like a polytechnic or ITE, your business may claim deductions on the fees charged for the project. The project must involve eligible activities such as research, software development, design, or IP work. This category is capped at $50,000 per YA

Across all five categories, if you opt for a cash payout instead of tax deductions, you can convert up to $100,000 of qualifying expenditure into a non-taxable cash payout of $20,000 per YA.

Now that you know what qualifies, the next decision is whether to claim tax deductions or go for the cash and how to pick the right option for your business.

Tax Deductions vs Cash Payout: What’s the Difference?

The Enterprise Innovation Scheme offers two ways for businesses to benefit, and understanding the difference can help you decide which suits your current financial goals better.

Tax Deductions

Eligible businesses may receive up to 400% tax deductions on qualifying expenses, subject to the following caps:

• $400,000 per category per Year of Assessment (YA)
  
• $50,000 for innovation projects with institutions
  

This is ideal if your company is already generating taxable income and wants to reduce its tax liability.

Cash Payout

Instead of tax deductions, businesses can choose to convert up to $100,000 of total qualifying expenditure into a non-taxable cash payout of $20,000 per YA. This helps offset costs quickly and is particularly useful for younger businesses that may not have high taxable income yet.

A Few Key Rules to Keep in Mind:

• You cannot claim both a tax deduction and a cash payout on the same expenditure
• The cash conversion cap applies across all five activity categories
• The choice is final and irrevocable once submitted
• The cash payout is not taxable and can be used freely
  

The scheme gives flexibility, but the right option depends on how your business is positioned today and where you want to invest tomorrow. For example, a profitable SME might benefit more from tax deductions, while a newer company with low taxable income may prefer the immediate support of a cash payout.

Once you’ve made that choice, the next step is knowing how to claim it and what to prepare when applying.

How to Apply for EIS

Once you’ve decided between tax deductions and the cash payout, the process to claim your EIS benefits depends on your business structure and your chosen option.

If You’re Claiming Tax Deductions

You’ll need to:

• Incur eligible expenditure within the YA
  
• Maintain complete supporting documents (e.g. invoices, contracts, training records)
  
• Declare the deduction in your income tax return
  
• Submit details through the “Submit EIS Enhanced Deduction/Allowance Records” service on IRAS myTax Portal.

If You’re Applying for the Cash Payout

You must:

• Ensure your income tax return is submitted by the required deadline
  
• Apply using the “Apply for EIS Cash Payout” service via the IRAS myTax Portal.
  
• Submit your application after filing your return, but before the filing due date
  
• Have made CPF contributions for at least three full-time local employees for at least six months during the YA

Only one application is allowed per YA, so include all qualifying expenditure in a single submission.

Depending on the activity type, you may also need to upload supporting documents. Once approved, IRAS generally disburses the payout within three months via GIRO or PayNow.

EIS Cash Payout Application Windows (YA 2026)

Business Type	Application Window for YA 2026
Partnerships	1 February – 18 April 2026
Sole Proprietorships	1 March – 18 April 2026
Companies	5 May – 30 November 2026

To avoid delays or rejections, it’s important to prepare early and file accurately. Next, we’ll share best practices to help you stay compliant and make the most of your EIS claims.

Related Article: How to Claim Government Subsidies for Corporate AI Job Training

Best Practices for Claiming EIS

Claiming benefits under the Enterprise Innovation Scheme isn’t difficult, but getting it right matters. The smoother your process, the faster you’ll receive the deduction or payout.

Here are some practical tips to keep your claim on track:

• Track spending by category: Don’t group everything under one heading. Separate your claims clearly across the five qualifying activities to stay within category caps.
  
• Exclude subsidised amounts: Government grants or subsidies, including SkillsFuture Enterprise Credit, must be deducted before applying EIS benefits.
  
• Keep supporting documents: Invoices, CPF contribution records, course enrolment details, and internal approvals may be requested by IRAS even after payout.
  
• Align spending with business operations: Claims are stronger when linked to business outcomes, especially for training and R&D.
  
• File early, not just on time: Submitting before the deadline gives you room to fix any issues or respond to IRAS queries without stress.
  
• Avoid duplicate claims: If you claim a cash payout on an expense, you can’t also apply for a tax deduction on it and vice versa. The choice is final once submitted.
  

The key is simple: stay organised, stay within scope, and stay proactive. If your business is investing in training, there’s an accessible path to maximise your claim.

Related Article: What Employers Need to Know About Absentee Payroll Funding

Maximise EIS Training Claims with Vertical Institute

Training is one of the most straightforward ways to benefit from EIS, especially when delivered by a provider that meets IRAS’s criteria.

Vertical Institute is a SkillsFuture Singapore-registered training provider, and our courses qualify under the “training” category for both 400% tax deductions and the 20% cash payout option.

Here’s why businesses use VI for EIS-eligible training:

• Courses are aligned with the Skills Framework, as required under the scheme
  
• Eligible for up to 90% funding through the SkillsFuture Enterprise Credit (SFEC)
  
• Covers in-demand areas such as Corporate Generative AI Training, Data Analytics, SEO, UI/UX Design and Data Science
  
• Trusted by over 50,000 learners, including teams from Shopee, SMU, and GovTech
  

If you’re planning to claim training-related benefits under EIS, we can help you check eligibility, subsidies, and documentation requirements.

Use our Business Subsidy Calculator to get started

FAQs About the Enterprise Innovation Scheme

Take the Next Step with Vertical Institute

If you’re claiming under the training category of the Enterprise Innovation Scheme, ensure your provider qualifies. Vertical Institute is a SkillsFuture Singapore–approved provider. Our EIS-eligible corporate training programmes build practical skills in AI, data analytics, and digital marketing. We’ll help you check eligibility, calculate subsidies, and structure your claim. 

Ready to turn your training budget into value? We’re here to help!