Singapore’s Budget 2025, presented by Prime Minister Lawrence Wong, lays out a strategic plan to strengthen the nation’s economy amid global challenges. With allocates a record S$143.1 billion — up from S$134.2 billion in 2024 — to support businesses, upskill the workforce, and foster innovation. With economic growth projected at 1.0% to 3.0% in 2025, the Budget focuses on driving inclusive and sustainable growth for enterprises and individuals.
Key Budget 2025 Measures for Businesses
1.) Managing business cost
50% Corporate Income Tax Rebate and Cash Grant
Similar to last year, businesses will receive a 50% corporate income tax (CIT) rebate for the Year of Assessment (YA) 2025. Eligible companies with at least one local employee in 2024 will also get a minimum cash grant of S$2,000. The combined rebate and grant are capped at S$40,000 per company.
Enhanced Progressive Wage Credit Scheme (PWCS)
The Progressive Wage Credit Scheme will now subsidize 40% of wage increases in 2025 and 20% in 2026, up from the previous rates of 30% and 15%.
This enhancement helps businesses manage rising labor costs while promoting sustainable wage growth for lower-income workers. It also eases operational expenses and supports talent retention efforts.
2.) Enhancing technology and innovation engines
Top-up to National Productivity Fund
Around S$3 billion has been set aside to attract high-value technology investments, boost business productivity, and upskill workers — all aimed at driving Singapore’s economic growth.
The additional funding for the National Productivity Fund will strengthen Singapore’s position in emerging fields such as artificial intelligence (AI) and quantum computing, enhancing its competitiveness on the global stage.
Investment in R&D infrastructure
A significant investment of S$1 billion will be dedicated to upgrading biotech and medtech infrastructure in the greater one-north area and establishing a new national semiconductor R&D facility. These initiatives aim to keep Singapore at the forefront of biotechnology and semiconductor research.
3.) Strengthening Enterprise Ecosystem
Extend Support for Internationalisation and M&A Scheme
The Mergers & Acquisitions (M&A) scheme has been extended from 31 December 2025 to 31 December 2030, offering a 25% allowance on qualifying acquisitions (capped at S$40 million per Year of Assessment, spread over five years) and a 200% tax deduction on transaction costs, up to S$100,000 per YA. Similarly, the Market Readiness Assistance (MRA) grant — which supports Singapore companies with up to S$100,000 per new market for overseas setup, market promotion, and business development — has been extended to 31 March 2026, providing continued support for SMEs exploring global expansion.
To enhance support for Singaporean enterprises in their internationalization and M&A efforts:
- Higher Loan Quantum: The EFS – Trade Loan’s maximum loan amount has been permanently increased from $5 million to $10 million, empowering businesses to meet rising trade financing demands and seize larger opportunities.
- Wider Coverage: The EFS M&A Loan now includes targeted asset acquisitions, recognizing that businesses may choose asset purchases as an alternative strategy to equity acquisitions.
Budget for Enterprise Compute Initiative
A budget of up to S$150 million has been allocated for the new Enterprise Compute Initiative. This program will connect eligible enterprises with leading cloud service providers, giving them access to AI tools, computing power, and expert consultancy. The goal is to help businesses harness AI more effectively in their transformation efforts.
New Private Credit Growth Fund
A S$1 billion Private Credit Growth Fund will be introduced to broaden fundraising options for high-growth local and regional enterprises, supporting their global expansion. This initiative is part of a wider strategy to strengthen Singapore’s capital market, attracting more private credit players alongside venture capitalists and private equity firms.
Tax incentives to boost and revitalize Singapore’s stock market.
To boost the local equities market, tax incentives will be introduced to attract more companies and fund managers to list on the Singapore Exchange (SGX). Companies will receive a 20% CIT rebate for primary listings and 10% for secondary listings with share issuance, provided they remain listed for at least five years.
Rebates are capped at S$6 million per YA for companies with a market cap of S$1 billion or more, and S$3 million for those below. Fund managers investing in Singapore-listed equities will also enjoy tax incentives.
Launch Global Founder Programme
Launched in April 2025, the Global Founder Programme (GFP) by EDB aims to attract multinational firms and entrepreneurs to establish or scale their ventures in Singapore. With government-backed support, it offers access to funding, talent, and a pro-business environment, reinforcing Singapore’s status as a financial hub.
4.) Investing in infrastructure
Allocation for Singapore’s Airport Development Fund
The Changi Airport Development Fund will receive a S$5 billion boost to support the development of Terminal 5. This top-up ensures Singapore’s air hub has the necessary resources to strengthen its position as a key pillar of global connectivity.
Support to Future Energy Fund
Singapore will top up its Future Energy Fund, launched in 2024, with an additional S$5 billion to advance its clean energy goals. The government will also explore the potential of nuclear power as part of its energy strategy.
These efforts highlight Singapore’s commitment to sustainable energy, opening up opportunities for businesses in renewable energy, green technology, and sustainability solutions.
The Budget outlines several initiatives aimed at fostering business growth, supporting innovation, and driving international expansion. While the measures provide a strategic framework, their real-world impact may vary for different businesses. Reflecting on these policies, I’d like to share my personal insights as a business consultant navigating this landscape.
My Reflections on Budget 2025
In my opinion, firstly the corporate tax relief of 50% and cap at $40k is the same as last year. For companies that make losses, the government still continues to provide a minimum benefit of a $2k rebate. This corporate tax relief mainly helps small businesses reduce some of their possible costs.
However, for bigger companies who need to pay taxes of more than $80k, they will only have tax relief of a maximum of $40k. Therefore, it reaches an equilibrium where the bigger companies will benefit less compared to the small and medium companies.
Secondly, the Enhanced Progressive Wage Credit Scheme (PWCS) is good because it increases the coverage from 30% to 40%. However, this is to encourage businesses to employ local/PR employees over foreigners, because the increase is purely based on CPF contribution increase which is only pertaining to local/ PR. In addition, other AI technologies can replace and reduce the need for manpower and also the option overseas outsourcing model where you can employ someone overseas for a fraction of the cost of a Singaporean employee.
Many of the options are opening to local SMEs to save cost and increase profit, which Hindle the local employment market. So as a business owner, we have to balance out what is really beneficial for you in the long run.
Thirdly, the government sees the need to upgrade ourselves and equip us with better and more advanced skill sets, such as AI and quantum computing knowledge, as well as Biotechnology and Semiconductor research knowledge. With the advancement of technology from the USA and China, Singapore needs to keep up with them fast enough.
Lastly, for the grant scheme wise, sad to say that they did not create any new grant packages for SME owners like us. What they only did was to extend the existing grant coverage for the following scheme:
- They have extended the Mergers & Acquisition (M&A) scheme for 5 years, and offer a 25% allowance on qualifying acquisitions and 200% tax deduction. This encourages more M&A deals to come by and also attracts investors and gives local business to go listing on SGX if possible changes occur.
- I am happy to share that the government has also extended the Market Readiness Assistance (MRA) grant for 1 year from 31 March 2025 to 31 March 2026– which is what Bizsquare is doing actively. Which supports Singapore companies in going overseas for business setup and business matching and business development work. This gives us more runway to help businesses expand overseas. Currently, we are focusing on countries such as Indonesia, Vietnam, Laos, Malaysia, and China as we have our own team and company over there. We are also able to do other countries such as Japan, Thailand, Dubai, Cambodia, India, Korea, Taiwan, and Australia as we have strong partners in these countries to fulfill your requirements.
- Increasing the loan quantum for our EFS trade loan is also good for many of us as we can have government-backed trade loans for a bigger limit to expand overseas.
Overall, I think the budget is not as generous to the businesses as compared to the individuals. It is a lot more swayed towards personal benefits than companies’ support. There are also doubts about whether the Enterprise Development Grant (EDG) is continuing because its due date is ending, or it will be stopped. The same for the Productivity Solution Grant (PSG), where no information was updated and if it will be ended.
At the moment, we have to assume it will end if there is no news about it.
