Singapore budget and MAS’s strategic boosts for asset and fund management, capital markets, SMEs, AI and Wealth

Singapore's Budget 2025, unveiled by Prime Minister Lawrence Wong, has set forth an ambitious agenda aimed at bolstering economic resilience and strengthening the nation’s core sectors. This article, part of Lighthouse Canton’s IDEAs: Views & Insights, highlights the impact of budget on small and medium-sized enterprises (SMEs), the financial sector, AI and tech infrastructure, and wealth management in Singapore.

1. SINGAPORE BUDGET TAKEAWAYS‍

1.1 STRENGTHENING SMEs

‍SMEs, the backbone of Singapore's economy, received significant support through a 50% Corporate Income Tax rebate for the Year of Assessment 2025, capped at S$40,000 per company. Additionally, a minimum cash grant of S$2,000 will be provided to active companies with at least one local employee in 2024, offering immediate financial relief amidst inflation and wage pressures.

‍The Progressive Wage Credit Scheme (PWCS) has been enhanced to cover 40% of wage increases in 2025 and 20% in 2026, up from previous rates. The Enterprise Financing Scheme’s (EFS) Trade Loan cap will permanently rise from S$5 million to S$10 million, providing businesses with greater access to working capital.

‍To support international expansion, the Market Readiness Assistance (MRA) grant, covering up to S$100,000 per new market, has been extended until March 2026. Complementing this, the SkillsFuture Enterprise Credit will allocate S$10,000 to eligible SMEs from the second half of 2026 to support workforce transformation and skills training.

1.2 FOCUS ON REVIVING SINGAPORE SECURITIES MARKET AND EXCHANGE

‍The financial sector, a cornerstone of Singapore’s economy, saw strategic interventions aimed at enhancing market vibrancy. MAS will inject SGD 5 billion into funds investing in local equities as part of the Equity Market Development Programme. This infusion aims to attract company listings and bolster liquidity on the Singapore Exchange (SGX).

‍Tax incentives are set to stimulate fund managers’ participation in the local market, focusing on driving investments into Singapore-listed equities. The Global Founder Programme, launching in April 2025, will further cement Singapore's status as a financial hub by attracting multinational firms and entrepreneurs to scale their ventures in the city-state.‍

1.3 AI AND TECH

‍Singapore continues to support the adoption of AI, quantum computing, and other emerging technologies to strengthen its Research and Development ecosystem and solidify its standing as the regional AI and technology powerhouse. The government has earmarked SGD 3 billion for the National Productivity Fund and provided tax breaks to corporates.‍

1.4 REINFORCING SINGAPORE AS A WEALTH HUB

‍Wealth management received renewed focus as the budget outlined measures to attract corporate listings and reinforce Singapore’s position as a premier investment destination. Tax incentives will apply to companies seeking primary and secondary listings on the SGX, with a 20% Corporate Income Tax rebate for primary listings and 10% for secondary listings involving share issuance, provided companies remain listed for at least five years.

‍New tax measures aim to encourage fund managers to allocate capital towards Singapore-listed equities, fostering deeper market liquidity and positioning the city-state as a magnet for global wealth and investment.‍

1.5 FOCUS ON PRIVATE CREDIT

‍The government is launching a SGD 1 billion private credit growth fund to support local companies with strong growth potential. Alongside investments from entities like Temasek's 65 Equity Partners and Heliconia Capital, this new initiative aims to address the need for longer-term financing, recognizing that some companies require extended growth timelines. The fund will offer "patient capital" to help these companies scale.

EQUITY MARKET DEVELOPMENT PROGRAM BY MAS

‍Shortly after the budget announcement, the Monetary Authority of Singapore (MAS) introduced a series of measures to revive Singapore's capital markets under the Equity Market Development Programme.

‍Singapore is rolling out key measures to boost its capital markets. The SGD 5 billion Equity Market Development Programme, led by MAS, will channel funds to asset managers with strong track records, focusing on Singapore-listed equities. The Global Investor Programme now requires single-family offices to invest at least SGD 50 million of their AUM in local equities, as part of the broader SGD 200 million requirement. Tax incentives have been introduced for fund managers listing in Singapore, as well as for both primary and secondary listings. Changes have also been made to the GEMS grant to further support the equity market. These measures aim to enhance market liquidity, grow the fund management industry, and drive more targeted investments into Singapore's capital markets.