Sun. Sep 20th, 2020

Southeast Asia COVID19 Stimulus Packages6 min read

Our team has compiled an overview of stimulus packages, subsidies, financing, and reliefs from Singapore, Indonesia, Malaysia, Vietnam, Thailand, and Philippines.

Our team has compiled an overview of stimulus packages, subsidies, financing, and reliefs from Singapore, Indonesia, Malaysia, Vietnam, Thailand, and Philippines. If you have comments regarding your experience applying for/receiving these or more resources other founders in Southeast Asia will be able to benefit from, you can comment below.

Singapore

Stimulus Package: S$48 Billion (US$33.7 Billion)

SME Financing: Loan Insurance Scheme, Enterprising Financing Scheme, Temporary Bridging Loan Programme

Tax Relief

  1. An automatic deferment of income payments for companies will be granted for 3 months
  2. Enhanced property tax rebate for non-residential property: Commercial properties badly affected by Covid-19 (Hotels, tourist attractions, shops and restaurants) will pay no property tax for 2020. A 30% rebate for 2020 will be given for all other non-residential properties (Offices, industrial property)

Wage Subsidy: Job Support Scheme

Others

  • SMEs can leverage the SMEs Go Digital Programme, the Productivity Solutions Grant (PSG) and the Enterprise Development Grant (EDG)
  • SMEs Go Digital Programme will provide support for more digital solutions, from basic remote working tools, to more advanced systems.
  • Maximum support levels for PSG and EDG raised to 80% and 90% respectively to spur transformation.

Sources 

  1. https://www.channelnewsasia.com/news/business/covid19-coronavirus-budget-5-things-heng-swee-keat-12579156?cid=h3_referral_inarticlelinks_24082018_cna
  2. https://www.gov.sg/article/4-ways-the-resilience-budget-is-helping-singapores-businesses-stay-afloat

Indonesia

Stimulus Package: 120 trillion rupiah (US$ 8.725 billion)

SME Financing

  • The rules governing loan restructuring for SMEs will be eased, allowing local banks to restructure loans regardless of ceiling limits
  • SMEs are eligible for loans of up to 10 billion rupiah (US$655,000) if they have a good credit history and have the capacity to pay back the loan

Tax Relief

The government will reduce Corporate Income Tax by 30% for businesses in 19 selected manufacturing industries for the next 6 months (Chemicals; Electrical equipment; Motor Vehicle, trailer; Pharmaceutical; Basic Metals; Transport equipment manufacturing etc)

For these 19 industries, the government will also relax VAT refunds and defer import tax payments for the next 6 months.

Import and Export Subsidies

  1. Simplify import and export activities
    • Reduce the “Restriction and Prohibition” measures that restricts/prohibits certain products from being imported or exported
    • Simplify the import process for raw materials
  2. Assist reputable traders: The government will assist quickly approve the license applications for the import and export of goods classified as restricted for ‘reputable traders’
  3. Accelerate the implementation of the National Logistics Ecosystem (NLE)
    • An electronic system established by the Directorate General of Customs and Excise to integrate the logistics community in the supply sector.
    • Through this, all logistic platforms, such as warehousing, shipping, and forwarders can access and share information. This enables importers and exporters to choose and check the price and availability of trucks, vessels, and warehouses, among others, under one application

Others

  1. SMEs can leverage the SMEs Go Digital Programme, the Productivity Solutions Grant (PSG) and the Enterprise Development Grant (EDG)
  2. SMEs Go Digital Programme will provide support for more digital solutions, from basic remote working tools, to more advanced systems.
  3. Maximum support levels for PSG and EDG raised to 80% and 90% respectively to spur transformation.

Source: https://www.aseanbriefing.com/news/indonesia-issues-second-stimulus-package-dampen-covid-19-impact/

Vietnam

Stimulus Package: 27 Trillion Dong (US$1.16 Billion)

SME Financing

  1. State Bank of Vietnam (SVB) has cut interest rates by 0.5-1 percentage points and scrapped transaction fees.
  2. Commercial banks to eliminate/cut/delay interest payments on loans to companies facing losses due to the coronavirus outbreak. PM Nguyen requested SVB to instruct banks to provide a monetary aid package in forms of simplification of lending procedures, rescheduling of debt payment, reduction and waiver of interest rates for customers affected by the pandemic.

Tax Relief: Tax breaks, delayed tax payments

Others: Reduction in land lease fees

Sources

  1. https://www.todayonline.com/world/vietnam-announces-116-billion-stimulus-package-help-virus-hit-businesses-state-media
  2. https://www.aseanbriefing.com/news/vietnam-issue-incentives-counter-covid-19-impact/
  3. https://www.aseanbriefing.com/news/asean-incentives-to-counter-covid-19-impact/

Malaysia

Stimulus Package: RM250 Billion (US$57.3 Billion)

SME Financing

  1. RM4.5 Billion of credit will be available at low interest rates to help small firms.
    • Increase funds to the Special Relief Facility (SRF) for SMEs. The maximum financing rate is now lowered from 3.75% p.a to 3.5%, and the enhanced SRF is available until Dec 31 2020.
    • Increasing the size of the All Economic Sector Facility fund to enhance access to financing for all SMEs
    • Providing additional funds under the Micro Credit Scheme that will be administered by the Bank Simpanan Nasional at 2% interest rate with no collateral. Loan eligilbility requirements are relaxed to a min of 6 months of operation.
    • Maximum financing amount is increased from RM50,000 to RM75,000 for each entrepreneur.
    • SMEs with business records of less than 4 years can leverage the BizMula-i and BizWanita-i schemes for financing of up to RM300,000 under the Credit Guarantee Malaysia Berhad (CGC)
  2. RM 5 Billion (Syarikat Jaminan Pembiayaan Perniagaan) will increase the guarantee coverage from 70% to 80% for SMEs that face difficulties in obtaining loans
  3. RM 100 Billion: in form of a 6-month loan moratorium on loan repayments on all loans for individuals and small businesses. Interest will continue to accrue during this period
  4. RM 50 Billion (Danajamin Credit Guarantee) : The government will guarantee up to 80% of loans worth at least RM20 Million to ensure that there is enough working capital for major firms

Tax Relief

  1. Postponement of income tax instalment payments of all SMEs for a period of 3 months beginning 1 Apr 2020.
  2. Banks’ income from interest or profit from loans or financing involved with the moratoriums will only be taxable when the income is received after the moratorium period

Wage Subsidy

RM 6 Billion Wage Subsidy Programme: SMEs whose revenue has dropped by at least half this year can claim up to RM600 per employee per month for 6 months, to help pay the salaries of staff earning less than RM4,000. Employers must ensure that there is no retrenchment/imposing unpaid leave/forcing a wage cut for the next 3 months after the implementation of the programme.

Others

  1. SMEs will be allowed to defer and restructure their EPF contributions, freeing up nearly RM10 Billion in cash flow.
  2. Contributions to the HR Development Fund will be waived for 6 months.

Sources

  1. https://www.straitstimes.com/asia/se-asia/malaysias-poorest-can-breathe-easier-but-jobs-still-at-stake
  2. https://www.nst.com.my/news/nation/2020/03/578956/pms-full-speech-prihatin-economic-stimulus-package

Thailand

Stimulus Package: 400 Billion Baht (US$12.7 Billion)

SME Financing

  1. Bank of Thailand will allow SMEs/bank debtors to undergo debt restructuring without any issues affecting their credit history. E.g. suspending principal repayment or reducing minimum monthly installment amounts.
  2. 150 Billion Baht Credit scheme to help small entrepreneurs with loans of 2% p.a. for 2 years. These loans are capped at 20 Million baht, and credit requests are up to 30 Dec 2020.

Tax Relief

  1. To postpone the payment of Corporate Income Tax for companies not listed on the Thailand Stock Exchange
  2. To postpone the submission of all forms of tax revenue (VAT, Specific business taxes) for affected entrepreneurs.
  3. Reduction of Withholding taxes from 3% to 1.5%
  4. Firms offered 1.5x tax deductions on interest rates and 3x tax deductions on wage expenses

Sources

  1. https://www.straitstimes.com/asia/se-asia/thailand-unveils-us127-billion-stimulus-package-to-ease-coronavirus-impact
  2. https://www.matichon.co.th/politics/politics-in-depth/news_2086268
  3. https://www.wealthythai.com/web/contents/WT200300353

Philippines

Stimulus Package: 200 Billion Pesos (US$3.93 Billion) *in preparation for their stimulus package

Source: https://www.thestar.com.my/business/business-news/2020/03/22/philippines-congress-to-prepare-us393b-stimulus-package

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