Unlocking IP-backed financing in Singapore

• Author: Andre Toh
• Position: ASEAN Valuation, Modeling & Economics Leader, Ernst and Young LLP, Singapore

The global economy is increasingly driven by innovation and intangible assets (IA). With rapid proliferation across different technology fields, the global value of intangible assets today has risen above USD 65 trillion, according Brand Finance’s 2020 Global Intangible Finance Tracker

Intellectual property (IP) rights, such as patents, trademarks and copyright, along with data, know-how and branding, are key components of IA. As enterprise value is increasingly founded in IA and IP, the ability of businesses to raise capital from these assets is critical to unlocking business value and driving enterprise growth.

Singapore takes a holistic approach to IP financing

The Government of Singapore has stepped up efforts to support enterprises in proactively protecting, managing and commercializing their IP. To this end, in 2013, the Government launched its IP Hub Master Plan , to position Singapore as a global hub for IP activities. In 2017, in line with Singapore’s broader economic strategy, the IP Hub Master Plan was revised and updated. The updates include the expansion of IP expertise, the enhancement of IP commercialization and financing as well as greater transparency around IP-related market information.

Building on the IP Hub Master plan and its revision, in 2021, the Singapore Government launched the Singapore IP Strategy 2030 (SIPS 2030). It focuses on three key areas. First, it seeks to strengthen Singapore’s position as a global hub for IP activities and transactions; second, it aims to attract and grow innovative enterprises; and third, it strives to develop good jobs and skills in IP.

Singapore starts from a strong position. It has an internationally recognized world-class IP ecosystem that provides a robust legal and regulatory infrastructure to enable enterprises to protect, manage and commercialize their IP. This includes a financial reporting and valuation framework that is aligned with international standards. Singapore is also home to more than 36,000 startups and technology companies, and continues to grow its pool of innovative enterprises. Moreover, Singapore’s IP ecosystem consists of a comprehensive network of IP service providers, including financial institutions and private lenders, valuers, consultants, and lawyers. Public-private partnerships between relevant government agencies and industry stakeholders continue to strengthen the IP ecosystem.

Singapore offers a robust slate of financing options for IP-rich...