Singapore companies to receive funding support as part of Budget 2025

Singapore’s Budget 2025 introduced a range of measures designed to help small and medium-sized enterprises (SMEs) and startups navigate financial pressures while fostering long-term growth. The initiatives, unveiled by Prime Minister and Finance Minister Lawrence Wong, include tax rebates, wage support programs, and new funding opportunities designed to strengthen the country’s business landscape.

One key highlight is the introduction of a 50% corporate income tax rebate for the Year of Assessment 2025. Eligible companies that hired at least one local worker in 2024 will receive a minimum benefit of S$2,000, with the rebate capped at S$40,000 per company. This measure is intended to ease operational costs, particularly for smaller businesses that have faced challenges with rising inflation and global supply chain disruptions.

The government is enhancing the Progressive Wage Credit Scheme to further support lower-wage employees. In 2025, co-funding levels for wage increases will rise from 30% to 40%, and from 15% to 20% in 2026. This will encourage companies to raise salaries for lower-income workers without shouldering the entire financial burden. For SMEs that often operate with limited profits, this provides an opportunity to attract and retain talent while maintaining financial stability.

The government is launching the Enterprise Compute Initiative due to the growing need for technological advancements. Up to S$150 million has been allocated to help businesses access artificial intelligence (AI) tools and cloud-based computing services. This program will partner with eligible firms with major cloud providers, ensuring SMEs can leverage cutting-edge technology without the typically high upfront costs.

Support for workforce development will also be enforced through the new SkillsFuture Workforce Development Grant. This initiative will provide up to 70% funding for job redesign activities, allowing businesses to adapt roles and processes to evolving industry needs. A redesigned SkillsFuture Enterprise Credit scheme will also provide firms with at least three resident workers a fresh S$10,000 in credit, starting in the second half of 2026. This credit, valid for three years, can be used to fund workforce transformation initiatives and digital adoption efforts, helping businesses stay competitive in an increasingly automated and skill-intensive economy.

Tax incentives are another key aspect of the budget, particularly for fund managers who invest in Singapore’s capital markets. These incentives aim to attract more companies to list on the Singapore Exchange (SGX), strengthening market liquidity and positioning the country as a prime financial hub. A new tier has also been introduced under the Financial Sector Incentive scheme to attract financial institutions specializing in green and sustainable finance.

The government is extending the Double Tax Deduction for Internationalization (DTDi) scheme to allow companies to claim tax deductions on eligible expenses incurred when expanding into overseas markets. Additionally, the Mergers & Acquisitions (M&A) scheme has been extended, offering continued support for companies looking to grow through acquisitions.

A new tax deduction has been introduced for equity-based remuneration schemes to encourage employees to stay and motivate long-term commitment. This allows businesses to offer share-based compensation, aligning employees’ interests with company performance. For startups, which often rely on equity incentives to attract top talent without immediate cash outlays, this measure provides a compelling advantage.

Wong emphasized that while these measures will help businesses adjust to economic challenges, long-term success will depend on productivity and growth. “The best way to adjust to higher prices is to grow the economy and increase productivity so that Singaporeans can enjoy higher real incomes and better standards of living,” he said in his speech. The government is committed to taking “bold and decisive actions” to ensure that Singapore remains a top destination for businesses and investment, he added. Analysts expect further refinements to Singapore’s pro-business policies, with additional recommendations from the Equities Review Group set to be released later this month.