Political risks insurance (PRI) is an important tool for companies to safeguard their projects and/or investments in overseas markets against political uncertainties.
Companies can also use PRI to unlock access to mid to long-term financing as it gives lenders additional comfort that the impact of political uncertainties over the performance of a project or investment has been mitigated.
What is the assistance?
PRIS enables qualifying Singapore companies to receive premium support for PRI policies. International Enterprise (IE) Singapore will support 50% of the premium for up to the first three years of each PRI policy. This is subject to a maximum amount of S$500,000 per qualifying Singapore-based company.
A typical PRI policy cover risks such as:
Currency inconvertibility and transfer restrictions
Breach of contract by host government
Non-honouring of sovereign financial obligations
Who can apply?
PRIS is a financial assistance programme under IE Singapore’s Global Company Partnership (GCP) programme.
GCP is for all Singapore-based companies with:
Clear internationalisation plan
Competitive product or service
Potential economic benefits to Singapore
To qualify for PRIS1, you would also need to fulfil the following criteria:
- Global HQ2 anchored in Singapore
At least 3 strategic business functions3 in Singapore
An annual turnover not exceeding S$500 million
An annual total business spending4 of at least S$250,000 in Singapore for each of the past three years
A minimum paid-up capital of S$50,000
At least three managerial staff who are Singaporeans and PRs
1 Support under PRIS will be up to the qualifying Applicant Company’s interest in the investment or project.
2 Global HQ refers to global management control and decision making functions are based in Singapore. Indicators include global CXOs being based in Singapore; boardmeetings being held in Singapore, etc
3 Strategic business functions refer to activities such as (i) banking and financial, (ii) marketing and business planning, (iii) procurement and logistics, (iv) training and personnel management, (v) investment planning and co-ordination, (vi) R&D and design, (vii) technical support, (viii) manufacturing, and (viiii) other value-added activities.
4 Total Business Spending refers to expenses incurred by the Applicant Company such as staff costs (salary, training), finance costs (bank loans, overdrafts, interest) and other operating expenses such as advertising and promotion, audit fee, depreciation, director’s remuneration, freight charges, insurance cost, office rental, professional consultant’s fees, telecommunications, utilities. For list of exclusion examples, please refer below.
Total Business Spending excludes cost of goods sold, cost of sales, distribution and selling expense, exchange rate losses, allowance for doubtful debts, income tax expense, property tax expense
How to apply?
Approach any Singapore-registered PRI broker/insurer to structure and procure a PRI policy.
Should your company qualify for support under PRIS; the PRI broker/insurer will assist you in the submission of your application for PRIS premium support to IE Singapore.
To find out more
Call us at 1800-IESPORE (1800-437 7673) or +65 6337 6628, or
Email us here