Prime Minister (PM) and Minister for Finance Lawrence Wong delivered Singapore’s FY2026 Budget Statement on 12 February 2026.
2025 was certainly a mixed bag from an economic standpoint, with real fears that US tariffs would trigger a global slump. But that did not happen, and Singapore’s economy performed relatively well.
Nevertheless, PM Wong acknowledged that some businesses continue to face cost pressures and operating challenges, warning that Singapore may not be as fortunate in 2026.
Given these challenges, PM Wong stated that this year’s Budget is designed to “support our businesses and help them stay competitive”.
Hiring? Access a talent pool of 500,000+ Singaporeans. Post your jobs on MyCareersFuture now.
The Singapore government’s goal is to “secure growth at the higher end of the 2% to 3% range over the next decade. But growth itself is not enough.”
“Growth must translate into good jobs and rising incomes for Singaporeans.”
Budget 2026: Singapore businesses must remain globally connected
In addition, PM Wong emphasised that globalisation has not ended.
“Economic flows are becoming more selective, partnerships more strategic, and resilience now matters as much as efficiency,” he added.
As such, local companies must adapt to these new patterns and find fresh ways to remain globally connected.
To that end, the government is establishing new forms of international cooperation to strengthen its economic resilience.
PM Wong cited recent moves, such as the launch of the Future of Investment and Trade Partnership, and the EU-Singapore Digital Trade Agreement, which has now entered into force.
A first-of-its-kind Agreement on Trade in Essential Supplies with New Zealand will be signed later in 2026 to ensure continuity of critical trade flows in times of crisis.
Singapore is also stepping up efforts to engage fast-growing markets in Latin America, Africa and the Middle East, PM Wong shared, which includes opening new embassies and boosting economic presence on the ground.
Closer to home, Singapore is working with neighbours on regional integration projects, such as the Johor-Singapore Special Economic Zone and the Batam, Bintan and Karimun Free Trade Zones in Indonesia.
Here’s a round-up of other employer-related initiatives and programmes PM Wong mentioned in his Budget Statement.
Introducing a new corporate income tax rebate
PM Wong announced a 40% Corporate Income Tax rebate in the Year of Assessment 2026.
Every active company that employed at least one local employee last year will receive a minimum benefit of S$1,500, and the total benefit for each company will be capped at S$30,000.
This aims to provide short-term relief, PM Wong said, especially for firms facing cost pressures, and will sit alongside broader efforts to restructure and transform Singapore’s economy.
Helping local firms go global
More help is on the way to support local enterprises that venture abroad, PM Wong revealed.
He announced the following:
- Enhanced support levels for grant schemes that support companies to internationalise: up to 70%for Small and Medium Enterprises (SMEs), and up to 50% for non-SMEs.
- Enhancements to the Market Readiness Assistance grant to help companies access new markets and deepen activities in existing overseas markets.
- Under the Double Tax Deduction for Internationalisation scheme, companies automatically enjoy a 200% tax deduction for selected qualifying activities, capped at S$150,000. Budget 2026 will allow more qualifying activities to be eligible for such automatic tax deduction claims and raise the cap to S$400,000.
- The maximum loan quantum for trade and fixed asset loans under the Enterprise Financing Scheme will be raised. This will give companies more flexibility to cater to their different financing needs.
Budget 2026 will also offer more support for companies pursuing significant overseas ventures that require higher capital outlay.
More details will be shared at the upcoming Committee of Supply by the Minister for Trade and Industry (MTI), said PM Wong.
New companies get boost for funding and capital in Singapore
PM Wong revealed Budget 2026 will also strengthen Singapore’s enterprise ecosystem, noting that many firms continue to face challenges at a growth stage due to the tightening of growth-stage capital – an issue that many other countries also face.
Currently, under the Startup SG Equity scheme, the government provides initial capital to catalyse and crowd in private funding for promising startups. To date, the scheme has focused mainly on early-stage funding.
PM Wong announced that the government will inject S$1billion into Startup SG Equity to support not just early-stage startups, but also growth-stage companies.
Until now, the scheme has focused on catalysing private funding for promising young firms. With this expansion, it will back a broader range of enterprises looking to scale up.
To strengthen the overall growth capital ecosystem, a new workgroup led by Minister Chee Hong Tat will be formed. It will work closely with industry players to develop strategies that position Singapore as a leading centre for growth capital.
PM Wong elaborated: “When enterprises are ready to list, we want them to see Singapore as their listing venue of choice.”
“We had earlier set up the Anchor Fund to attract and anchor high-quality public listings, and we are now seeing encouraging signs of renewed listing activity on the SGX.”
As such, the Singapore government will also launch a second S$1.5 billion tranche of the Anchor Fund to attract high-quality public listings in Singapore.
To build on positive momentum in Singapore’s equities market, the government will inject another S$1.5 billion into the Financial Sector Development Fund.
PM Wong said this follows encouraging results from the Equity Market Development Programme, which was launched in 2025 to grow Singapore’s fund management industry and boost investor participation.
So far, the Monetary Authority of Singapore (MAS) has allocated close to S$4 billion to nine asset managers under the programme.
EDB to step up efforts to attract high-growth companies to Singapore
In addition, the Singapore Economic Development Board (EDB) will introduce more measures to attract high-quality listings and support companies at every stage of growth.
Going forward, PM Wong said EDB will step up efforts to attract high-growth companies with the potential to become future industry leaders.
He believes that by anchoring such companies early, Singapore can build new engines of growth and capture greater value for our economy as they grow and expand.
Investment in AI testing, with the goal of faster and coherent workforce deployment
Speaking on artificial intelligence (AI), PM Wong said if it was harnessed well, AI would be a strategic advantage for Singapore.
“It can help us overcome our structural constraints — our limited natural resources, rapidly ageing population, and tight labour market.”
He noted that currently more than 60 firms, including Google and Microsoft, have set up AI Centres of Excellence here.
“These investments have created a growing number of good jobs for Singaporeans — in AI research, engineering, and deployment”, he added.
He shared that for AI to truly take root and bear fruit in Singapore; employers must move fast and not rely solely on isolated pilots or small-scale experiments.
To help local employers, Singapore will launch a new set of national AI Missions to transform key sectors of the economy and push the boundaries of what’s possible, said PM Wong.
It will focus on four sectors:
- advanced manufacturing
- connectivity
- finance
- healthcare
Each AI Mission will be grounded by clear objectives and tangible outcomes – from world-class factories to more efficient logistical systems.
PM Wong also observed that many firms claim to use AI, but full transformation will require big changes – by rethinking systems, processes and jobs, as well as investing in retraining.
He gave examples of leading Singapore companies like DBS and Grab that are already moving decisively on AI transformation, adding that the government’s goal is to encourage and help more to do so.
A new Champions of AI programme will be launched to support companies to “comprehensively transform” using AI.
These firms will receive tailored support for enterprise transformation and workforce training, and are expected to set benchmarks for their sectors.
Support schemes for companies to be strengthened
PM Wong also revealed the following schemes would strengthen support for all enterprises, especially SMES, to help them adopt AI and benefit from it in practical ways:
- Currently, the Enterprise Innovation Scheme provides businesses with 400% tax deductions on qualifying expenditures in activities such as research and innovation. The scheme will be expanded to add AI expenditures as a qualifying activity for the Years of Assessment 2027 and 2028, capped at S$50,000 per Year of Assessment.
- The Productivity Solutions Grant, designed to help companies adopt digital solutions, will also be expanded to support a wider range of digital and AI-enabled solutions, so companies have tools to work smarter and compete more effectively.
- Singapore will also develop a larger AI park in One-North, which expands on an existing pilot. This will bring together AI practitioners, researchers and innovators to catalyse collaborations and interactions.
Further PWM support for lower-wage Singaporean workers in Budget 2026
The Progressive Wage Model (PWM) goes beyond a simple flat minimum wage, and instead links pay increases to skills, productivity, and career progression — and it is delivering results, said PM Wong.
Training support for the scheme will be enhanced for its basic tier, and the hourly allowance for workers who upgrade their skills will be increased.
In addition, Budget 2026 will see co-funding raised under the Progressive Wage Credit Scheme (PWCS) from 20% to 30%, and extend the scheme by two years to 2028.
From 2027, firms will also need to raise the minimum wage from S$100 to S$200 to qualify for PWCS support.
Lastly, the Local Qualifying Salary(LQS) for full-time local employees will be raised from S$1,600 to S$1,800.
This salary threshold applies to firms that hire foreign workers and is part of broader efforts to strengthen support for lower-wage workers.
PM Wong concluded that the 2026 Budget is a budget to “support Singaporeans today, prepare our society for tomorrow, and enable us to navigate this changed world with confidence”.
“Together we will secure a stronger, fairer, and brighter future for all.”
To learn more about what Budget 2026 has for Singapore jobseekers and workers, click here.
Image Credits: MDDI
Follow us on LinkedIn for more expert career guidance and industry insights: Workforce Singapore on LinkedIn
Stay updated with the latest trends, job market shifts and career health advice from WSG.
