Types of SMEs in Singapore: Which one fits your business?

In Singapore, small and medium-sized enterprises (SMEs) form the core of the business landscape. Representing 99% of all firms, they provide employment to around 70% of the local workforce and play a vital role by contributing close to half of the nation’s GDP. But what exactly qualifies as an SME, and how do you determine which type your business belongs to?

This guide will explore the classifications of SMEs in Singapore, why this matters, and how it can influence your eligibility for government support, grants, and strategic planning.

What Is an SME in Singapore?

The definition of an SME in Singapore is primarily governed by Enterprise Singapore. To qualify as an SME, your business must:

• Be locally incorporated.
• Have at least 30% local shareholding by Singaporeans or Permanent Residents.
• Have either an annual sales turnover of not more than S$100 million or employment size of not more than 200 employees.

ACRA (Accounting and Corporate Regulatory Authority) requires all businesses to be registered but does not provide a distinct SME definition. Therefore, when referring to "SME Singapore," we generally mean companies that fit within the above thresholds while being officially registered entities.

SMEs play a vital role in strengthening the singapore economic framework, contributing to resilience and adaptability amid global market shifts. To support this sector, the sme singapore business community can access digital transformation tools through IMDA’s SMEs Go Digital initiative, which offers tailored programs to help businesses adopt essential technologies and stay competitive.

Why Classification Matters

Correctly identifying your SME category is crucial - it influences your eligibility to schemes, grants and strategic funding options.

• Identify the right financing options.
• Choose appropriate compliance strategies.
• Benchmark growth targets.

For companies seeking structured support, JBC provides expert Business Management and Consultancy in Singapore, offering guidance tailored to your SME type and goals.

Micro, Small, and Medium Enterprises

Knowing which SME category your business falls into helps you tap into the right support and develop a tailored growth strategy. Singapore’s SME ecosystem consists of three main categories: micro, small, and medium enterprises. Each classification reflects different business scales and growth stages, helping determine the right type of support and strategy. A detailed breakdown of these categories is available on sme singapore, including revenue and manpower benchmarks that define each type.

Micro Enterprises

• Employees: Fewer than 10
• Annual Revenue: Typically below S$1 million
• Examples: Home-based businesses, freelancers, and early-stage startups

Micro enterprises often operate with lean budgets and limited resources. For these businesses, financial planning for SME in Singapore is crucial to ensure sustainability and scalability.

Small Enterprises

• Employees: 10 to 50
• Annual Revenue: Between S$1 million to under S$10 million
• Examples: Retail outlets, boutique firms, small agencies

As small enterprises grow, they typically face challenges around team expansion, digitalisation, and regulatory compliance. JBC offers Business Growth & Expansion Strategies in Singapore that help small enterprises align with industry standards and scale efficiently.

Medium Enterprises

• Employees: 51 to 200
• Annual Revenue: Up to S$100 million
• Examples: Exporters, manufacturing firms, regional service providers

Medium-sized companies often focus on cross-border expansion, R&D investment, and productivity improvements. They benefit the most from schemes like the Enterprise Development Grant (EDG) and Market Readiness Assistance (MRA).

Financial and Operational Implications

Knowing your SME type isn't just a formality—it affects how you operate:

• Micro enterprises need basic compliance, strong cash flow management, and simple accounting tools.
• Small businesses may need employment passes, industry-specific licenses, and staff management systems.
• Medium enterprises must consider corporate tax planning, regional regulations, and digital transformation tools.
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For all business sizes, adopting sound financial strategies is essential. Explore our guide on financial planning for SME in Singapore to learn how to prepare for different growth phases.

Government Schemes Available

Different grants and schemes are available depending on your SME classification:

Micro

• Startup SG
• Productivity Solutions Grant (PSG)
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Small

• Enterprise Development Grant (EDG)
• Productivity Solutions Grant (PSG)
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Medium

• Market Readiness Assistance (MRA)
• Business Improvement Fund
• Enterprise Development Grant (EDG)
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To qualify for many of these, your business must first meet the formal definition of an SME. That's why proper classification is not just administrative—it's strategic.

Challenges SMEs Face at Every Stage

Despite generous support, SMEs in Singapore still face recurring hurdles:

• High operational costs
• Hiring and retaining skilled staff
• Managing compliance with evolving regulations
• Keeping pace with digital transformation

Whether you're a micro business or scaling into medium territory, being aware of these issues is key to overcoming them. For a deeper dive, read our guide on Challenges Faced by SMEs in Singapore.

Identifying Your SME Type: A Practical Approach

Ask yourself the following:

• What is your annual revenue?
• How many full-time employees do you have?
• What’s your ownership structure?
• Are you planning to apply for grants or funding?

Knowing where you stand helps you adopt the right mindset and tools for long-term success. If you're unsure where to start, consult with our Business Management and Consultancy in Singapore team for a personalised assessment.

Conclusion: Know Your SME Type to Plan Smarter

Understanding what type of SME you are in Singapore goes beyond labels—it impacts your financial options, compliance needs, and growth strategy. Whether you're just starting or looking to expand across borders, classification is the foundation for long-term success.

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