Amid rising geopolitical tensions and a more fragmented global economy, Singapore’s Budget 2026 sets out a series of measures aimed at strengthening enterprise competitiveness, deepening research capabilities, and accelerating AI adoption across key sectors.
Prime Minister and Finance Minister Lawrence Wong delivered the Budget statement at Parliament House on February 12, outlining a refreshed economic strategy designed to secure growth in a more uncertain global environment.
“We must aim higher, move faster, and be prepared to take calculated risk,” Wong said, as he described the need to adapt to new global patterns of trade, investment, and technological change.
For enterprises operating in Singapore and across the Asia-Pacific region, the Budget signals continued investment in AI, deep-tech research, growth capital, and internationalisation support.
Many of these measures directly affect how technology-intensive firms access capital, adopt AI, expand regionally, and scale advanced capabilities.
AI as a national priority
Artificial intelligence features prominently in Budget 2026, with the government positioning its deployment as a key lever for productivity and sectoral transformation.
Singapore will launch a new set of national AI missions focused on four sectors: advanced manufacturing, connectivity and logistics, finance, and healthcare. These missions are intended to drive AI-led transformation in areas where Singapore has established industrial strengths.
For enterprises in these sectors, this could translate into coordinated regulatory sandboxes, targeted R&D support, and clearer deployment pathways for AI solutions.
To coordinate these efforts, the government will establish a new national AI council chaired by the Prime Minister, which will provide strategic direction for Singapore’s AI agenda.
Recognising that AI transformation requires more than pilot projects, the government will introduce a “Champions of AI” program. This initiative will support companies seeking to undertake end-to-end AI transformation, including enterprise systems redesign and workforce training.
In addition, the Enterprise Innovation Scheme will be expanded to include AI-related expenditures as a qualifying activity for Years of Assessment 2027 and 2028, capped at SG$50,000 per year of assessment.
This allows companies investing in AI systems, integration, and capability development to offset part of their transformation costs.
The Productivity Solutions Grant will also be broadened to support a wider range of digital and AI-enabled solutions for firms of all sizes.
To further develop the ecosystem, the government will establish a larger AI park at one-north, building on the existing Lorong AI initiative. The cluster is intended to bring together founders, researchers, and practitioners to accelerate collaboration and commercialisation.
Such clustering is intended to shorten the path from research to enterprise deployment.
Strengthening R&D and deep-tech capabilities
Budget 2026 commits SG$37 billion under the Research, Innovation and Enterprise 2030 plan, amounting to around 1% of GDP annually over the plan period.
The investments will focus on areas where Singapore has established capabilities and sees long-term potential, including advanced semiconductor packaging, decarbonisation technologies, and quantum computing.
In semiconductors, advanced packaging was highlighted as a key frontier, integrating multiple chips into a single package to deliver improved performance and energy efficiency.
On quantum technologies, the government underscored earlier investments in foundational research and noted the establishment of advanced quantum computing capabilities in Singapore, providing researchers and companies with access to cutting-edge systems.
These initiatives are intended to anchor high-value R&D activities in Singapore and support the development of new growth clusters.
For companies operating in these fields, this strengthens access to advanced manufacturing capabilities, semiconductor innovation, and emerging quantum infrastructure within the local ecosystem.
Expanding growth capital and market depth
Beyond R&D and AI, Budget 2026 places renewed emphasis on strengthening Singapore’s growth capital ecosystem.
The government will set aside SG$1 billion to enhance the Startup SG Equity scheme and expand its scope to cover growth-stage companies, addressing funding gaps faced by firms seeking to scale.
A second SG$1.5 billion tranche of the Anchor Fund will be launched, as a co-investment between the government and Temasek, to attract and anchor high-quality listings on the Singapore Exchange (SGX).
The Financial Sector Development Fund will also receive a SG$1.5 billion top-up to expand the Equity Market Development Programme, aimed at increasing investor participation and strengthening Singapore’s public equities market.
In addition, listing rules will be streamlined, and a dual-listing bridge between SGX and NASDAQ will be established, providing growth companies with additional pathways to access capital.
Together, these measures are designed to support enterprises at different stages of development, from early-stage start-ups to growth companies seeking public listings.
For technology firms in particular, improved access to growth-stage capital and public markets can influence where they anchor their regional headquarters and scaling operations.
Supporting internationalisation
As global supply chains become more selective and strategic, the government will enhance support for companies expanding overseas.
Grant support levels for internationalisation will be increased to up to 70% for SMEs and up to 50% for non-SMEs.
Under the Double Tax Deduction for Internationalisation scheme, more qualifying activities will be included, and the cap for automatic claims will be raised from SG$150,000 to SG$400,000.
The Enterprise Financing Scheme will also be enhanced by increasing the maximum loan quantum for trade and fixed asset loans, giving firms greater flexibility to finance overseas expansion.
These measures aim to help Singapore-based enterprises tap new markets, including in Southeast Asia, Latin America, Africa, and the Middle East.
This is especially relevant for technology and digital services firms seeking to export software, platforms, and advanced solutions across borders.
Workforce transformation and AI upskilling
Recognising the workforce implications of AI adoption, Budget 2026 includes measures to support skills development and job transitions.
SkillsFuture Singapore and Workforce Singapore will be merged into a new statutory board jointly overseen by the Ministry of Education and the Ministry of Manpower. The new agency will provide integrated support across skills training, career guidance, and job matching.
To strengthen AI literacy, the government will redesign the SkillsFuture website to make AI learning pathways clearer and easier to access. Singaporeans who take selected AI training courses will receive six months of free access to premium AI tools, enabling hands-on practice.
The SkillsFuture Level Up program will also be enhanced, with mid-career training allowances extended to part-time courses and coverage expanded to more industry-relevant programmes.
These initiatives are intended to support enterprises as they adopt AI-driven processes while ensuring workers can adapt to evolving job roles.
In practice, this alignment between workforce policy and enterprise transformation is intended to reduce friction in large-scale digital adoption.
A continued focus on competitiveness
Budget 2026 also includes a 40% corporate income tax rebate for Year of Assessment 2026, capped at SG$30,000 per company, providing short-term relief to businesses facing cost pressures.
While broad-based, the measure provides temporary breathing room for firms undertaking technology and capability upgrades.
At the same time, the government signalled that investment promotion efforts will be strengthened to remain competitive amid global tax changes and reshoring incentives in other economies.
Taken together, the measures outlined in Budget 2026 reinforce Singapore’s focus on AI deployment, deep-tech development, growth capital formation, and workforce transformation.
As global conditions become more uncertain, the government’s approach centres on strengthening enterprise capabilities and positioning Singapore as a hub for innovation, capital, and technology-led growth in the region.
