Key Takeaways:

• 40% Corporate Tax Rebate for YA 2026 – Active companies with at least one local employee get a minimum S$1,500 cash grant, capped at S$30,000
• Enhanced Internationalisation Support – Market Readiness Assistance grant increases to 70% for SMEs expanding overseas (April 2026–March 2029)
• National AI Push – New Champions of AI programme and expanded grants for businesses adopting AI transformation
• Workforce Cost Relief – Progressive Wage Credit Scheme extended to 2028 with increased co-funding to 30%
• Double Tax Deduction Cap Raised – Automatic DTDi claims increase from S$150,000 to S$400,000 for overseas expansion activities
• Startup SG Equity Expansion – S$1 billion boost to support growth-stage companies, not just early-stage startups

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Prime Minister Lawrence Wong delivered Singapore’s FY2026 Budget Statement on 12 February 2026, setting the stage for how businesses will navigate an increasingly uncertain global landscape. If you’re running a business in Singapore, whether you’re a startup founder, an established SME owner, or a foreign entrepreneur expanding into the Lion City—this Budget brings targeted relief and strategic opportunities you need to know about.

The S$154.7 billion Budget 2026 Singapore announcement isn’t just about short-term handouts. It’s a deliberate roadmap for businesses to strengthen competitiveness, embrace AI transformation, expand internationally, and manage rising costs. From corporate tax rebates to enhanced business grants Singapore 2026 offers, here’s what matters most for your business.

Immediate Cash Relief: 40% Corporate Tax Rebate Singapore 2026

Let’s start with the measure that puts money back in your pocket. The Government will provide a 40% Corporate Income Tax (CIT) rebate for Year of Assessment 2026, benefiting all taxpaying companies whether you’re tax resident or not. This corporate tax rebate Singapore initiative is one of the most significant business support measures in Budget 2026.

Who qualifies?

Every active company that employed at least one local employee (Singapore Citizen or Permanent Resident) in Calendar Year 2025 receives a minimum benefit of S$1,500 as a CIT Rebate Cash Grant. The total maximum benefit—combining the rebate and cash grant—is capped at S$30,000 per company.

Here’s how it works: If your company has a tax payable of S$40,000 for YA 2026, you’ll receive a 40% rebate of S$16,000. If you employed a local worker in 2025, S$1,500 comes as a cash grant, with the remaining S$14,500 applied as a tax rebate.

What you need to do:

Nothing. IRAS will automatically compute and apply this rebate when you file your Corporate Income Tax Return (Form C/Form C-S). Eligible companies will receive benefits from the second quarter of 2026 onwards. Just ensure your records are accurate and up-to-date.

The rebate is designed as short-term relief whilst businesses continue restructuring and transformation efforts—so treat this as breathing room, not a reason to delay investing in your business capabilities.

Betting Big on AI: National AI Council Singapore and Champions Programme

Budget 2026 signals that Singapore is doubling down on artificial intelligence as a competitive advantage. PM Wong announced he will personally chair a new National AI Council to drive Singapore’s AI agenda and ensure businesses can adopt AI safely and responsibly. This represents one of the most ambitious AI initiatives Budget 2026 Singapore has ever introduced.

Champions of AI Programme

This new initiative supports firms with the ambition to use AI comprehensively to transform their businesses. Support will be tailored to each company and includes enterprise transformation and workforce training. The idea is simple: successful AI champions will set benchmarks for their industries and inspire others to follow.

Enhanced AI Grants for SMEs

The Enterprise Innovation Scheme will be expanded so AI-related spending qualifies for 400% tax deductions on qualifying costs (such as R&D and innovation) for YA 2027 and YA 2028, capped at S$50,000 per year of assessment.

Productivity Solutions Grant (PSG) Expansion

The Productivity Solutions Grant, which currently helps Singapore companies improve productivity and automate processes through IT solutions and equipment, will be significantly enhanced under Budget 2026. The Government will expand PSG to support a wider range of digital and AI-enabled solutions, making it easier for SMEs to access funding for automation and AI adoption.

This expansion is crucial for businesses that want to harness AI but find the upfront costs prohibitive. PSG now becomes a practical pathway for companies to adopt AI tools without breaking the bank—whether you’re looking at customer relationship management systems with AI capabilities, automated inventory management, or intelligent data analytics platforms.

Why this matters:

If you’ve been sitting on the fence about AI adoption—whether it’s automating routine processes, deploying chatbots for customer service, or using predictive analytics—Budget 2026 removes much of the financial friction. For professional services firms, AI can handle data preparation and routine tasks, allowing your team to focus on higher-value strategic work.

The key question isn’t whether to adopt AI, but which processes to prioritise and how to ensure you’re eligible for available grants. Navigating PSG applications, understanding eligibility criteria, and ensuring your technology investments qualify can be complex. This is where working with experienced advisers becomes invaluable. We can can help you identify which Budget 2026 grants and schemes apply to your business, ensure your financial records meet eligibility requirements, and guide you through the application process—so you capture every available benefit without the administrative headache.

Go Global: Supercharged Internationalisation Support Singapore

Singapore’s economic future depends on helping businesses expand beyond our shores. Budget 2026 delivers enhanced support for companies ready to internationalise, with some of the most generous business expansion grants Singapore has offered.

Market Readiness Assistance (MRA) Grant Enhancement 2026

From 1 April 2026 to 31 March 2029, the MRA grant support levels jump significantly:

• Local SMEs: Up to 70% of eligible costs (previously 50%)
• Local non-SMEs: Up to 50% of eligible costs

The grant remains capped at S$100,000 per company per new market and now supports both entering new markets anddeepening presence in existing markets—a crucial addition for businesses already operating overseas.

Double Tax Deduction for Internationalisation (DTDi) Expansion

Currently, companies enjoy a 200% tax deduction for selected qualifying activities, capped at S$150,000. From YA 2027, this cap increases to S$400,000, and more activities will qualify for automatic claims without prior approval, including:

• Feasibility and due diligence studies
• Overseas investment study trips
• Overseas market development trips
• Production of corporate brochures for overseas distribution
• Master licensing and franchising activities

Why this matters:

If you’ve been eyeing regional expansion—whether into Malaysia through the Johor-Singapore Special Economic Zone, Southeast Asian markets, or further afield—these enhancements significantly reduce your upfront costs and tax burden. The higher automatic approval cap means less red tape and faster execution.

Startup SG Equity Gets a S$1 Billion Boost

Previously focused on early-stage funding, Startup SG Equity will now set aside S$1 billion to support growth-stage companies ready to scale. This is a game-changer for businesses that have proven their model and need capital to expand aggressively.

Workforce Support Budget 2026: Managing Rising Labour Costs

Labour costs continue to climb, and Budget 2026 acknowledges this with targeted workforce support measures for Singapore businesses.

Progressive Wage Credit Scheme (PWCS) Extension 2026

The PWCS, which co-funds wage increases for lower-wage workers, has been extended by two years to 2028. Co-funding support increases to 30% in 2026 (up from 20%), providing tangible relief for businesses committed to raising wages.

From 2027, the minimum wage increase required to qualify for PWCS rises from S$100 to S$200, encouraging employers to make more meaningful investments in their workers.

Local Qualifying Salary (LQS) Increase – Foreign Worker Policy Changes 2026

From 1 July 2026, the LQS for full-time local employees in companies that hire foreign workers increases from S$1,600 to S$1,800. This foreign worker policy change affects your foreign worker quota calculations and levy costs under Singapore’s workforce regulations.

What you need to do:

Review your workforce composition now. If you employ foreign workers under Work Permit or S Pass schemes, recalculate your dependency ratios and budget for the LQS increase. Companies with tight margins should also explore the PWCS to offset wage increases for lower-wage local staff.

For businesses managing complex payroll and CPF obligations, working with experienced corporate secretary services ensures you remain compliant whilst maximising available government support.

What This Means for Your Business

Budget 2026 reflects Singapore’s strategy to remain competitive in a fractured global environment. The measures aren’t just about surviving current cost pressures—they’re about positioning your business to thrive through AI adoption, international expansion, and workforce development.

Immediate action steps for Singapore businesses:

1. Verify your tax position – Ensure your YA 2026 corporate tax filing is accurate to receive the full 40% CIT rebate benefit
2. Assess AI readiness – Identify processes ripe for automation or AI enhancement and explore qualifying AI grants Singapore offers through PSG and EIS
3. Map internationalisation plans – If overseas expansion is on your roadmap, take advantage of enhanced MRA grants and DTDi deductions before March 2029
4. Review workforce strategy – Calculate the impact of LQS increases on foreign worker levy Budget 2026 and explore PWCS co-funding for wage adjustments

Singapore’s Budget 2026 gives businesses the tools to navigate uncertainty with confidence. The question isn’t whether these Budget 2026 business support measures apply to you—it’s how quickly you’ll act on them.

Need help navigating Budget 2026’s compliance requirements or maximising available grants?

Grof Singapore offers comprehensive accounting and tax compliance services tailored to SMEs and growing businesses. Our expert team ensures you remain compliant whilst capturing every available benefit. Book your free consultation to discuss how Budget 2026 affects your business and what steps you should take next.

Frequently Asked Questions

1. What are the key "bottlenecks" Budget 2026 helps businesses solve?

   Budget 2026 is framed around easing several common constraints that can slow business growth. One bottleneck is the upfront cost of expansion, so measures that enhance internationalisation support—such as the Market Readiness Assistance grant and Business Adaptation Grant—are intended to lower that initial financial barrier. Another is execution capability, especially when businesses want to adopt artificial intelligence (AI) but find it difficult to integrate it into existing processes. Measures such as the broadened Productivity Solutions Grant (PSG) support, the inclusion of AI-related spending under the Enterprise Innovation Scheme (EIS), and sector-focused AI missions through the National AI Council are aimed at narrowing that gap. Cash flow pressure is also a real bottleneck for many Singapore SMEs. The 40% corporate income tax rebate for YA 2026, combined with the Progressive Wage Credit Scheme co-funding, provides tangible relief so businesses can reinvest in growth rather than just managing costs.

2. How can Grof help in aligning my 2026 roadmap with the Budget's benefits?

   We usually start by understanding what you want to achieve and then highlighting the Budget 2026 initiatives that can realistically support those moves. This can give you a clearer idea on how to pursue your 2026 plans whilst making use of the government support that is available. Ready to make Budget 2026 work for your business? Book a free consultation with Grof and let's map out your strategy for the year ahead.

3. When will I receive the 40% corporate tax rebate?

   IRAS will automatically compute and apply the 40% Corporate Income Tax rebate when they assess your Year of Assessment 2026 tax return. Eligible companies will begin receiving benefits from the second quarter of 2026 onwards—so expect to see the rebate reflected between April and June 2026.

   If your company meets the local employee condition (employed at least one CPF-contributing local worker in Calendar Year 2025), the S$1,500 cash grant component will be credited separately, whilst the remaining rebate amount will offset your tax payable. You don't need to apply for this—it's automatic once you file your Form C, Form C-S, or Form C-S (Lite).

   The key is ensuring your corporate tax filing is accurate and submitted on time.

4. Do I need to apply separately for the Market Readiness Assistance (MRA) grant?

   Yes, the MRA grant requires a formal application through Enterprise Singapore. Unlike the corporate tax rebate which is automatic, internationalisation grants like MRA need you to demonstrate your expansion plans, provide supporting documentation, and meet specific eligibility criteria.

   The application process typically involves:

   • Submitting a detailed market entry or expansion plan
   • Providing quotations for eligible expenses (marketing, business development, market set-up costs)
   • Demonstrating your company's capability to execute the expansion
   • Meeting Enterprise Singapore's assessment criteria

   The enhanced support levels (70% for SMEs, 50% for non-SMEs) apply from 1 April 2026 to 31 March 2029, so timing your application strategically can maximise your grant quantum.

5. Can I claim both the corporate tax rebate and other tax incentives?

   Yes, the 40% Corporate Income Tax rebate for YA 2026 can be claimed alongside other qualifying tax incentives and schemes. The rebate is calculated on your final tax payable after all other deductions, exemptions, and reliefs have been applied.

   For example, if your company qualifies for:

   • Partial Tax Exemption scheme (first S$10,000 at 75% exemption, next S$190,000 at 50% exemption)
   • Productivity and Innovation Credit (PIC) scheme
   • Double Tax Deduction for Internationalisation (DTDi)
   • Enterprise Innovation Scheme (EIS) deductions

   You first apply all these schemes to reduce your chargeable income and calculate your tax payable. Then, the 40% rebate applies to the resulting tax amount, subject to the S$30,000 cap.

   This layering of incentives is intentional—the Government wants businesses to benefit from both transformation support (through schemes like DTDi and EIS) and cost relief (through the tax rebate). The key is ensuring you're claiming all eligible schemes and maintaining proper documentation.