Singapore Budget 2026: Business Highlights

In 2026, Singapore’s corporate landscape is navigating a “new era of growth” defined by rapid AI integration and shifting global trade dynamics. Delivered against a backdrop of geopolitical fragmentation, Singapore Budget 2026 doubles down on the “Singapore Premium”, positioning the Lion City as a safe harbour and high-velocity launchpad for AI-driven enterprises and global expansion.

The centerpieces of this year’s announcement include the 40% Corporate Income Tax (CIT) Rebate for YA 2026 and a bold S$1.5 billion push into the Anchor Fund. These measures signal a clear shift from general pandemic-era recovery to targeted, high-value transformation.

For SMEs, the message from Parliament is unmistakable: the government is ready to co-invest in your internationalisation and digital capabilities, provided you are ready to leap from experimentation to scale.

In this blog, we look at the different support provided for businesses across various segments for your easy reference.

Key Takeaways

• A 40% CIT Rebate for YA 2026, capped at S$30,000, ensures businesses can remain competitive amidst rising costs.
• The MRA Grant now offers up to 70% support for eligible costs, with expanded criteria to include existing overseas markets.
• The Champions of AI Programme provides tailored support for businesses adopting AI, including workforce training and enterprise transformation.
• A S$1 billion injection into the Startup SG Equity Scheme extends support to growth-stage companies, catalysing private investment.
• The S$37 billion RIE 2030 Plan focuses on quantum technology, decarbonisation, and digital economy solutions, marking a 32% increase in funding from the previous plan.

Singapore Budget 2026 – Corporate Tax Support

40% Corporate Income Tax Rebate for YA2026

The government will provide a 40% corporate income tax rebate to enable businesses to alleviate cost pressures and remain competitive. Every company that hired at least 1 local employee in calendar year 2025 will also receive a cash rebate of S$1,500. The total benefit will be capped at S$30,000. Qualifying companies will receive this benefit from the 2nd quarter of 2026.

Extension of 250% Tax Deductions

Individuals and businesses will continue receiving 250% tax deductions for qualifying donations to Institutions of a Public Character (IPCs) until the end of 2029. This scheme, first introduced in 2009, was set to expire at the end of 2026. The continuation of this benefit encourages corporate social responsibility by offering significant tax savings.

Improvements to Support Internationalisation Schemes

Enhanced Market Readiness Assistance (MRA) Grant

The MRA grant will be bolstered to support companies in venturing to new markets and increasing activities in existing foreign markets. Currently, it provides support of up to 50% of eligible costs, capped at S$100,000 per company per new market, which will lapse after 31 March 2026.

The enhanced grant involves:

1. Increased support level from the current 50% to up to 70% of eligible costs, applicable till 31 March 2029.
2. The extension of the S$100,000 enhanced grant cap.

From the second half of 2026, the “new to target overseas market” criterion of the MRA grant will be removed. This means that local businesses will be able to obtain grant support to increase their presence in existing overseas markets. This will help businesses expand into new or existing overseas markets and is part of Enterprise Singapore’s refresh of its grant schemes.

Improved Double Tax Deduction for Internationalisation (DTDI) Scheme

Under this scheme, companies get a 200% tax deduction on qualifying expenses incurred on 16 qualifying market expansion and investment development activities. From YA 2027, the deduction cap will be increased from the previous limit of S$150,000 to S$400,000.

This improvement will encourage more internationalisation efforts since Singapore’s markets are relatively saturated, motivating companies to use Singapore as their base while expanding overseas.

The scope of claims not needing prior approval will also be widened to include all eligible expenses incurred on overseas market development trips and investment study trips, together with these qualifying activities:

• Master licensing and franchising
• Overseas business development
• Market surveys or feasibility studies
• Investment feasibility or due diligence studies
• Creation of corporate brochures for overseas distribution

Aside from this, businesses can also continue applying to Enterprise Singapore or the Singapore Tourism Board (STB) for expenses that exceed S$400,000 per YA or expenses incurred on overseas trade offices and e-commerce campaigns.

Enterprise Financing Scheme (EFS)

The EFS helps Singapore companies tap into financing more readily across all growth stages. From 1 April 2026, the maximum loan quantum under these aspects of the EFS will be enhanced:

Improvements to Internationalisation Schemes

Grant support levels for other internationalisation schemes will also be enhanced from 1 April 2026 to 31 March 2029. Local SMEs will get support of up to 70% of eligible costs, while local non-SMEs will get support of up to 50% of eligible costs.

They will apply to these grants:

1. Business Adaption Grant (till 6 October 2027)
2. Global Innovation Alliance (GIA) Schemes

Initiatives for AI Adoption

Expanded Enterprise Innovation Scheme (EIS)

Presently, the EIS provides businesses with 400% tax deductions on qualifying expenditures in activities such as R&D and innovation and capability development.

The EIS will be expanded to include AI expenditures as a qualifying activity for YA 2027 and 2028 with a cap of S$50,000 yearly. Note that the option to convert the qualifying AI expenditure into a non-taxable cash payout is not available.

Initially, the EIS was not benefiting small businesses in Singapore entirely. Its expansion to include AI will benefit businesses who are investing into AI to improve their business processes, save time and cost (manpower), so that more funds can be freed up to be reinvested into their business. This will be especially beneficial for SMEs. More details will be released in mid-2026, which will hopefully include greater benefits for these SMEs.

Strengthened Productivity Solutions Grant (PSG)

The PSG helps companies adopt digital solutions. It will be expanded to cover a wider range of digital and AI-enabled solutions.

Champions of AI Programme

This new programme will be launched to support firms aiming to AI to transform their businesses in a comprehensive manner. Support will be customised to each company and will include workforce training and enterprise transformation.

Support for Startups

Expanded Startup SG Equity Scheme

Singapore will inject S$1 billion to broaden the Startup SG Equity Scheme to include growth-stage companies and boost support beyond early-stage funding and catalysing private investment. A new work group led by Minister Chee Hong Tat will also be formed to create strategies to improve the city-state’s growth capital ecosystem.

Support for Equities

S$1.5 Billion Top Up for Anchor Fund

The Monetary Authority of Singapore (MAS) will add a second S$1.5 billion tranche into the Anchor Fund to improve Singapore’s attractiveness as a listing destination.

This is a co-investment fund between the Singapore government and Singapore’s investment company, Temasek, that was established in 2021 to back promising high-growth enterprises and market leaders in raising public funds in Singapore’s public equity market.

S$1.5 Billion Top Up for the Financial Sector Development Fund (FSDF)

The top up to the FSDF aims to boost investor participation in Singapore equities and help build Singapore’s fund management industry. This enhancement builds on Singapore’s stock market’s momentum that was driven by the Equity Market Development Programme (EQDP), a S$5 billion MAS initiative launched in July 2025.

Support for Research and Innovation

S$37 Billion Research, Innovation and Enterprise (RIE) 2030 Plan

S$37 billion will be committed over the next 5 years to fund the newest Research, Innovation and Enterprise (RIE) 2030 plan. This will be used to turn discoveries into solutions to national problems and money-making opportunities.

Areas where there is potential for Singapore to build leadership include quantum technology and decarbonisation solutions. Initially announced by Senior Minister Lee Hsien Loong in December 2025, this figure is the largest injection made by the government since 1991. It marks a 32% increase from the S$28 billion fund for the RIE 2025 plan.

The majority of the funding, 29%, or S$10.8 billion, will be used in 4 areas:

1. Human Health and Potential
2. Manufacturing, Trade and Connectivity
3. Urban Solutions and Sustainability
4. Smart Nation and the Digital Economy

Turn Support Into Opportunities With the Right Advice

Singapore Budget 2026 signals a bold shift towards high-value transformation and AI-driven growth. With the right strategies, businesses can leverage these initiatives to scale, innovate, and thrive in a competitive global landscape. At InCorp, our specialists across different services can provide the necessary guidance and help you need. Talk to us today to find out how!

About the Author

Mabel Ng

With over two decades of experience in direct and indirect taxation, Mabel has honed her expertise across a broad spectrum of environments, including the Big 4 accounting firms, mid-tier firms, and various industry roles. Her extensive background spans not only Singapore but also the wider Asia-Pacific region, reflecting a deep understanding of diverse tax landscapes and practices. She is also a member of the ISCA and FCCA, and is an SCTP Accredited Tax Practitioner.

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