The Singapore Budget 2025 was presented by Prime Minister and Minister for Finance, Mr Lawrence Wong, on 18 February 2025. Against a backdrop of major geopolitical and macroeconomic uncertainties, this year’s Budget focuses on key areas such as managing rising expenses and keeping companies as well as Singapore competitive in the ever-changing global landscape.
Key highlights:
- 50% corporate tax rebate and cash grant for Year of Assessment 2025
- SG$3 billion top-up to National Productivity Fund to reduce operational costs
- New Global Founder Programme to attract international founders to Singapore
- Tax incentives for fund managers and firms to rejuvenate Singapore stock market
- More than SG$10 billion Investment in R&D and infrastructure
- New SG$150 million Initiative to support use of artificial intelligence (AI)
- New SG$1 billion Private Credit Fund for high-growth local enterprises
- SG$5 billion top up to Future Energy Fund
- Initiatives to support workforce transformation and hiring diverse workers
In this article, we provide a summary of the key measures announced and explore their implications for local businesses as well as corporations and entrepreneurs looking to expand or start a business in Singapore.
Managing business costs in Singapore
Managing a business in Singapore can be costly. To address this, Budget 2025 introduced a slew of incentives aimed at reducing business operational expenses in Singapore.
50% corporate income tax rebate and cash grant
Similar to last year’s Budget, businesses will enjoy a 50% rebate on corporate income tax (CIT) for the Year of Assessment (YA) 2025. In addition, eligible companies that have at least one local employee in 2024 will also receive a minimum cash grant of SG$2,000. The maximum benefit comprising the rebate and grant is limited to SG$40,000 per company.
This repeat measure from last year provides immediate relief by reducing tax burden and may help businesses, particularly small and medium enterprises (SMEs), retain more earnings for reinvestment or operational needs.
Enhanced progressive wage credit scheme
Additionally, the Progressive Wage Credit Scheme (PWCS) will now cover 40% of wage increases in 2025 and 20% in 2026, up from the earlier rates of 30% and 15%.
This enhanced scheme helps businesses manage rising wage costs while ensuring sustainable income growth for lower-wage workers. This can reduce operational costs for businesses and support their talent retention efforts.
Enhancing technology and innovation engines
Driving technological adoption and innovation remains a key priority for Singapore. This year’s Budget announced new initiatives in this area.
National Productivity Fund top-up
An extra SG$3 billion will be injected into the National Productivity Fund. This can equip Singapore to compete effectively in cutting-edge sectors, including AI and quantum computing, providing companies with the strategic resources they need to innovate and scale. Launched in 2010, the Fund has provided support for initiatives that improve productivity and workforce skills.
Investment in Research and Development (R&D)
An estimated SG$1 billion will strengthen the development of R&D infrastructure in Singapore. For companies in the biotech sector, a significant upgrade to the public biosciences and MedTech research infrastructure in the greater one-north area is planned. In the semiconductor field, the development of a new national semiconductor R&D fabrication facility will provide researchers and industry partners with the tools to carry out new semiconductor innovations.
New Enterprise Compute Initiative to support AI adoption
To help companies to leverage AI, an upcoming Enterprise Compute Initiative can provide the necessary support. Eligible companies will be able to work with leading cloud service providers for access to AI tools, computing power, and consultancy services.
This initiative helps businesses adopt AI by reducing cost and expertise barriers through cloud partnerships. Businesses can accelerate digital transformation, enhance efficiency, and gain a competitive edge.
Enabling enterprise growth
Supporting businesses growth locally as well as internationally remains a key focus. New enhancement measures were announced help companies scale and thrive in Singapore and overseas, be it organic growth or mergers and acquisitions (M&A).
New Global Founder Programme
Multinational firms and entrepreneurs might be keen in the upcoming Global Founder Programme (GFP) under the Singapore Economic Development Board (EDB). The programme presents a valuable opportunity for businesses looking to establish or scale their ventures in the country.
With government-backed support, entrepreneurs can benefit from a pro-business environment, access to funding networks, and a strong talent pool. Businesses considering entry may assess the programme’s incentives when applications open in April.
New Private Credit Growth Fund
Around the world, the private credit market is becoming a key source for innovative financing solutions to businesses. However, only a few of these funds cater to businesses in Singapore.
To address this gap, a new SG$1 billion Private Credit Growth Fund will be launched. This fund will broaden the range of financing options available for high-growth local enterprises. More details will be released soon.
Tax incentives to rejuvenate Singapore’s stock market
To strengthen Singapore’s capital markets, new tax incentives will encourage more corporate listings on the Singapore Exchange (SGX) while supporting fund managers investing in Singapore-listed equities.
Companies opting for a primary listing will receive a 20% CIT rebate, while those with secondary listings involving share issuance will qualify for a 10% rebate. To ensure long-term commitment, companies must remain listed for at least five years.
Rebates will be capped at SG$6 million per YA for qualifying entities with a market capitalisation of SG$1 billion or more, and SG$3 million per YA for those below this threshold.
These tax incentives make listing on SGX more attractive for businesses by reducing corporate tax burdens and supporting long-term market participation. Companies considering an initial public offering (IPO) or secondary listing can benefit from rebates, while fund managers investing in SGX-listed equities gain additional incentives.
Extension of Market Readiness Assistance (MRA) grant
Aimed at helping Singapore companies to expand into international markets, the MRA grant offsets costs related to setting up operations abroad, market promotion, and business development.
Offering up to SG$100,000 per new market, the grant will be available until 31 March 2026. It was slated to end on 31 March 2025. This ensures that SMEs in Singapore have sufficient support to consider and explore expansion overseas.
Extension of Double Tax Deduction for Internationalisation (DTDi) scheme
Under the DTDi scheme, businesses can claim a 200% tax deduction on eligible expenses incurred for market expansion and investment development. Initially scheduled to end on 31 December 2025, the scheme will now continue until 31 December 2030, providing continued support for companies venturing internationally.
Enhancements to the Enterprise Financing Scheme (EFS)
The EFS is a crucial resource that helps Singapore businesses to secure funding at every stage of development. The scheme will be enhanced to include a permanent increase in the EFS – Trade Loan cap from SG$5 million to SG$10 million. The EFS – Mergers and Acquisitions Loan will have its scope broadened to include targeted asset acquisitions, effective from 1 April 2025 to 31 March 2030.
Supporting internationalisation and M&A scheme
Originally due to end on 31 December 2025, the M&A scheme has been extended until 31 December 2030. The scheme grants an M&A allowance, written down over five years, that amounts to 25% of up to SG$40 million of qualifying acquisitions per YA. Companies may also claim a 200% tax deduction on the transaction costs incurred for these acquisitions, capped at SG$100,000 per YA.
Enhancing infrastructure and green sustainable economy
Investments in infrastructure and sustainability will support long-term economic growth. New initiatives announced in Budget 2025 will help businesses transition to greener practices while benefiting from a more resilient and efficient operating environment.
Improvements to Singapore’s air hub
Singapore’s Changi Airport remains a key gateway for businesses across various sectors to tap into other markets. The upcoming Terminal 5 is expected to increase the airport’s capacity by more than 50% upon completion. An additional SG$5 billion will be added to the Changi Airport Development Fund to support this development.
The expansion of Changi Airport with Terminal 5 will significantly enhance Singapore’s global connectivity, benefiting businesses reliant on international trade, logistics, and travel. Increased capacity can improve supply chain efficiency, reduce transit times, and open new market opportunities.
Future Energy Fund top up
This year’s Budget announced that Singapore will add SG$5 billion to its Future Energy Fund, launched in 2024, to further support its goals to secure clean power. In addition, the government will proactively study the potential development of nuclear power in Singapore.
These initiatives signal stronger government support for clean energy, creating opportunities for businesses in renewable energy, sustainability solutions, and green technology. Companies involved in energy efficiency, carbon management, or infrastructure development may benefit from upcoming initiatives. The study on nuclear power also suggests potential long-term shifts in Singapore’s energy landscape, which businesses should monitor for future investment and regulatory developments.
Coastal and Flood Protection Fund top up
In response to increasing climate risks, initiatives are underway to bolster Singapore’s defences, including reclamation efforts to produce additional land. To support the implementation of these measures, an extra SG$5 billion will be added to the Coastal and Flood Protection Fund, ensuring that the country remains resilient for the future.
New schemes to boost the use of clean heavy vehicles
To promote the transition to clean heavy vehicles, a Heavy Vehicle Zero Emissions Scheme and an Electric Heavy Vehicle Charger Grant will be rolled out. These may make the adoption of such vehicles more economically viable for businesses, facilitating a smoother shift toward sustainable operations.
Bear in mind a new Additional Flat Component (AFC) will be implemented to electric heavy goods vehicles to align their costs with those of internal combustion engine (ICE) vehicles. Businesses operating these vehicles will see an AFC of SG$250 for electric heavy goods vehicles, SG$190 for electric minibuses, and SG$550 for electric large buses. The charge will be introduced gradually over three years beginning in January 2026 and will be fully applied by January 2028.
Supporting workforce and business transformation efforts
Workforce transformations are essential to maintain a company’s growth and competitiveness, but this comes at a cost. Budget 2025 offers various government grants and other measures to defray relevant expenses.
Improvements to SkillsFuture for businesses
To boost workforce capabilities, the new and upcoming SkillsFuture Workforce Development Grant will consolidate schemes from WorkForce Singapore and SkillsFuture Singapore. This can streamline support for businesses, with the grant covering up to 70% of costs related to job redesign activities.
Additionally, the SkillsFuture Enterprise Credit (SFEC) will soon be easier to use. Companies can expect to view their credit balance and immediately use for transformation programmes. Businesses with at least three resident employees will also receive an additional SG$10,000 in redesigned credit beginning in the latter half of 2026, with current credits remaining accessible until that time.
Additional support under NTUC’s Company Training Committee (CTC) Grant
The NTUC CTC grant have played a key role in helping companies achieve their transformation goals. To build on this success, an additional SG$200 million in funding will be allocated to the grant to help companies roll out employer-led training, with potential for formal certifications.
More support for hiring seniors and former offenders
Finally, businesses hiring seniors and former offenders will benefit from extended wage offsets and support schemes:
- Senior Employment Credit (SEC) is extended until 2026, with wage offsets for hiring Singaporeans aged 60+ earning up to SG$4,000. From 18 February 2025, the highest support tier will cover those aged 69+, offering up to 7% wage support.
- Central Provident Fund (CPF) contributions for employees aged 55–65 will increase by 1.5 percentage points. The CPF Transition Offset will absorb half the additional employer costs for another year.
- Uplifting Employment Credit for hiring former offenders is extended until end-2028, supporting companies committed to inclusive hiring.
These measures help businesses manage labour costs while expanding their workforce with skilled and experienced employees.
Next steps
Overall, this year’s Budget is generous and forward-looking. It addresses immediate challenges for businesses today while laying the groundwork for a stronger and more resilient tomorrow. It sets out a clear direction for the nation as a global business hub in an unpredictable world.
If you would like to learn more about Budget 2025, how it impacts your business goals and plans, or any other matters related to incorporating and running your business in Singapore, our experienced local team of experts is here to help. Reach out to us today.
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