Singapore Budget 2026

Executive brief for businesses

On 13 February 2026, Prime Minister and Finance Minister Lawrence Wong delivered the Singapore Budget 2026, marking the first budget of the government’s new term.

While there are immediate cash sweeteners to help with costs, the bulk of the firepower is directed at two clear horizons: Artificial Intelligence (AI) and Global Expansion. The message to companies is clear: – the government will support you, but only if you are innovating, digitising, or venturing overseas.

Here is a summary of what is available for companies and the strategy behind the numbers.

2. The Growth Engines and Strategic Pivot to Consider: Global & AI

This is where the strategic weight of the Budget lies. The government is aggressively lowering the barriers for Singaporean companies to leave the nest and pushing for deep tech adoption.

Going Global (Enhanced Support)

The government wants businesses to look beyond Singapore’s shores.

Double Tax Deduction for Internationalisation (DTDi):

Businesses are allowed a 200% deduction on eligible expenses incurred on qualifying market expansion and investment development activities. The automatic expense limit for claims without prior approval will be more than doubled, from $150,000 to $400,000 per YA starting YA 2027. Currently, the nine activities that are advertising in approved local trade publication, design of packaging for overseas markets, local trade fairs, overseas advertising and promotional campaign, overseas investment study trips, overseas market development trips, overseas trade fairs, product/service certification, and virtual trade fairs.  

The scope of claims which do not require prior approval will also be expanded to cover all eligible expenses incurred on overseas market development trips and overseas investment study trips, and the following qualifying activities:

• Investment feasibility/due diligence studies;
• Master licensing and franchising;
• Market surveys/feasibility studies;
• Overseas business development;
• Production of corporate brochures for overseas distribution.

Businesses can continue to apply to Enterprise Singapore or Singapore Tourism Board for expenses exceeding $400,000 per YA or expenses incurred on overseas trade office and e-commerce campaigns.

Strategy: If you are planning overseas marketing or set-up costs, hold off if possible. The enhanced support of 70% will kick in on 1 April 2026.

The AI Push

“AI” was the buzzword of the afternoon. The strategy is to move from using software to building AI-driven competitive advantages. The government is no longer just funding “digitisation” (e.g., buying laptops). They are funding intelligence.

• “Champions of AI” Programme: A new initiative to support firms that are comprehensively transforming their business models using AI.
• Enterprise Innovation Scheme (EIS): Expanded to include AI-related expenditures as qualifying activities for tax deductions/allowances. An additional qualifying activity will be introduced for qualifying AI expenditures. Businesses can claim tax deductions/allowances of 400% on up to $50,000 of qualifying AI expenditures incurred for each YA. The option to convert qualifying expenditure into a cash payout will not be available for this new qualifying activity. IRAS will release more details in y mid-2026.
• Capital Injection: A $1 Billion top-up to the Startup SG Equity scheme, specifically targeting deep-tech and growth-stage companies.

Strategy: Start planning for AI initiatives to take advantage of the additional 400% on the $50,000 qualifying AI expenditures as a tax planning strategy and also use this as a foundation to kickstart your planning to incorporate AI into your business operations.

3. The Challenge: Manpower Costs

The labor market remains tight, and the policy direction continues to favor a “Singaporean Core” while managing foreign workforce quality.

• Levy Increases: Foreign worker levies for basic-skilled workers in the Marine (+$100) and Process (+$150) sectors will rise.
• Qualifying Salaries: Expect increases in Employment Pass (EP) and S Pass qualifying salaries starting from 2027, giving businesses a runway to adjust.
• Senior Employment Credit: Extended to end-2027 to encourage the hiring and retention of senior workers.

Our Takeaway: If your business is purely domestic and reliant on low-cost labor, this Budget offers temporary relief but signals long-term cost pressure. If you are tech-enabled and export-oriented, the government is effectively co-paying your growth bill.

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Your Immediate Checklist

1. Pause MRA Applications: Submit from April 1, 2026 to capture the 70% support rate.

2. Tag AI Expenses: Set up a separate GL code for “AI & Innovation” to easily capture the $50k spend for the 400% tax deduction.

3. Tag Internationalisation expenses: Set up a separate GL Code for “Internationalisation – XXX” to easily capture the spend for the 200% (DTDi).

Contact us for a Budget 2026 Strategy Review

Budget 2026 introduces multiple incentives with specific implementation dates. We can help you assess eligibility, align timelines, and map the relevant grants and tax benefits directly to your P&L.

If you are planning overseas expansion into:

• Malaysia
• Hong Kong
• Australia
• Indonesia
• United Kingdom
• United States

We can evaluate potential benefits under the enhanced MRA (70%) and the 200% DTDi deduction, and structure your expansion spend accordingly.

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If you have any questions, please email to:-