SINGAPORE: From May 1, new microbreweries will have the option of paying a pro-rated licence fee of S$2,100 per quarter in the first year of operations, instead of committing to an annual fee of S$8,400 upfront.
This was announced by the Trade and Industry Ministry (MTI) on Saturday (Feb 23), under a new framework aimed at lowering the barriers of entry.
New microbreweries can also get any “unused” licence fees refunded on a pro-rated basis, if they decide not to remain in business. This is so that they do not further incur sunk costs from licensing fees, said MTI.
Senior Minister of State for Trade and Industry Chee Hong Tat said these changes were made to grow an entrepreneurial society.
"We're looking at trying to achieve three objectives. First is to make it easier to start, second is to make it quicker to scale and third is to make it cheaper to fail,” he told Channel NewsAsia on the sidelines of a conference at the National University of Singapore.
“And I believe the combination of these three attributes, will give our entrepreneurs more confidence.”
The Pro-Enterprise Panel (PEP), which comprises members from the private sector and government agencies, had worked with Singapore Customs to implement the new framework for microbreweries.
They had received feedback on the licensing framework from the three Nanyang Technological University students behind Binjai Brew.
The engineering students, Abilash Subbaraman, Rahul Immandira and Heetesh Alwani, had experimented with brewing techniques in their hostel last year and shared their beer, only to be told by the university less than a year later that they had to stop brewing beer in their residential hall.
READ: From hostel to market: Binjai Brew makers, told to stop making beer in NTU, back with ‘legal’ launch
They have since gone on to partner a local microbrewery and are currently selling three flavours of their specialty beer.
"At that point, it was a huge thing … because we were about to graduate, and a lot of our friends were thinking, do I start-up? Or do I get a job?" Mr Alwani recalled on Saturday.
"So by lowering that barrier to trying out, people will be like, you know what? Let's not get a job yet, let's do a start-up."
Mr Subbaraman added that the change will also help young entrepreneurs cut their losses and encourage them to try again, if the business were to fail.
"At the start, you're a bit uncertain whether you would actually survive the whole one year and all the initial capital that you need to put up for this. So in a way, this new change in the pro-rated fees will actually help," he said.
In 2012, Singapore Customs introduced a lower annual licence fee of S$8,400, amid a rise in local microbrewery activities. Previously, microbreweries had to pay the same annual fee as large-scale breweries, which costs S$43,200.
Said Mr Chee: This idea of lowering entry barriers to encourage entrepreneurship can also be applied to other regulatory licences. I encourage the business community and our government agencies to work together with PEP to explore these possibilities."