Tax Incentives for Particular Industries in Singapore

Singapore’s tax regime is an important factor that has made the country maintain its attractiveness to entrepreneurs worldwide. In addition to a low primary corporate tax rate of 17%, companies can greatly benefit from various tax incentives in the city-state.

The Singapore government provides tax incentives which means lighter and lower tax rates or even tax exemptions for companies, especially small and medium-sized companies operating in specific industries. Therefore, in this article, we have provided an overview of Singapore’s tax incentives across different sectors that you can tap into.

Some Useful Tax Incentives Aimed at Specific Industries

The following is general information about some of the most popular tax incentives in specific industries in Singapore.

Financial Services Industry

Finance and Treasury Centre (FTC) Incentive by The Singapore Economic Development Board (EDB)

The purpose of FTC is to encourage companies to grow their treasury management capabilities and use Singapore as a base to conduct strategic finance and treasury management activities.

Overview

• Approved finance and treasury center (FTC) companies are eligible for an 8% corporate tax rate reduction on income earned from qualifying FTC services and withholding tax exemption on interest payments.
• The incentive period is limited to five years. 
• To qualify for the FTC incentive, companies must establish substantive activities in Singapore and perform strategic functions.

For further information, click here.

Financial Sector Incentive (FSI) Scheme by the Monetary Authority of Singapore (MAS)

FSI is a tax incentive scheme available for financial institutions with plans to establish or expand their operations in Singapore.

Overview

• FSI applies to licensed financial institutions, from large universal banks, fund managers to capital market players.
• Eligible institutions can enjoy several concessionary tax rates for trading in loans, headquarter services (like risk management, business planning, etc.), and fund management.
• Most FSI recipients are licensed banks. Their main activities consist of a good mix of business (e.g., capital markets, treasury, corporate loan services) and corporate functions (e.g., general management, risk management, training, marketing, and other head office services).

Insurance Business Development (IBD) Scheme by MAS

IBD applies to licensed insurance players, from large composite insurers and reinsurers to specialty insurance and reinsurance companies.

Overview

• Qualified companies can receive a concessionary rate of up to 10%.
• Typical IBD recipients are licensed insurers whose business lines comprise a good mix of risks, such as Marine Cargo and Hull, Property, and Casualty.

Manufacturing and Services Industry

Pioneer Certificate Incentive (PC) and Development and Expansion Incentive (DEI)

PC and DEI are tax incentive schemes provided by EDB. Its purpose is to encourage companies to grow capabilities and conduct new or expanded activities in Singapore. 

Overview

• Approved companies under the PC or DEI are eligible for a corporate tax exemption or a concessionary tax rate of 5% or 10%, respectively, on income derived from qualifying activities. 
• The incentive period is limited to five years. 
• The criteria for applying for these schemes include the employment created (including skills, expertise, and seniority), total business expenditure, which generates spin-off to the economy, and commitment to growing the capabilities (e.g., technology, skillsets, know-how) in Singapore. In addition, manufacturing projects are also required to commit to fixed asset investment in plant, building, or equipment. 

For complete information, click here.

Trading Industry

Global Trader Programme (GTP) by Enterprise Singapore

This tax incentive is targeted at well-established companies engaged in international physical trading on a principal basis to establish their trading base in Singapore.

Overview

• The GTP provides a 5% or 10% reduced corporate tax rate on eligible trading income for three or five years.
• Eligible trading income includes income from physical trading, brokering of physical trades, derivative trading income, and income from structured commodity financing activities, treasury activities, and advisory services concerning mergers and acquisitions.
• To qualify for GTP, companies must have substantial operations in Singapore and meet strict quantitative criteria (including local employment and expenses).

For additional information, click here. 

Shipping and Maritime Industry

Approved International Shipping Enterprise Award by MPA

This award seeks to encourage international ship owners and ship operators to establish their commercial shipping operations in Singapore.

Overview

• Eligible companies will enjoy tax exemption on qualifying shipping income for either  a 10-year renewable period; or a 5-year non-renewable period, with the option of graduating to the 10-year renewable award at the end of the 5-year period,
• Applicants with a good track record and verifiable business plan regarding their shipping operations in Singapore may apply for the award.

Maritime Leasing Award by MPA

This award aims to encourage entities to use Singapore as their capital and funding base to finance their vessels or sea containers.

Overview

• Vessel or container leasing companies, business trusts, or partnerships will enjoy up to 5 years of tax concessions on eligible leasing income under this award.
• Approved managers of the asset-owning entities will be awarded a concessionary tax rate of 10% on their qualifying management income.
• Applicants with good track records and verifiable business plans regarding their ship and container financing operations in Singapore may apply for the award on or before 31 December 2026.

Shipping-related Support Services Award by MPA

The award aims to encourage additional shipping service providers’ growth and encourage shipping conglomerates to establish their corporate services function in Singapore.

Overview

• Approved companies enjoy a concessional tax rate of 10% on additional revenue earned from providing approved delivery-related support services and qualify for a renewable period of 5 years.
• Applicants with good track records and provable business plans concerning their additional shipping activities in Singapore may apply for the award on or before 31 December 2026.

For detailed information, click here.

R & D, Innovation, and Product Development Activities

Intellectual Property (IP) Development Incentive (IDI)

The IP Development Incentive (IDI) aims to encourage the use and commercialization of intellectual property rights arising from research and development (R&D) activities.

Overview

• IP developers with good track records conduct expansionary projects and meet the required economic commitments may apply for the incentive.
• Approved IDI companies are entitled to a 5% or 10% reduction in the corporate tax rate of the percentage of eligible IP income earned during the incentive period, which should not be earlier than July 1, 2018.
• The incentive period is limited to an initial period of not more than ten years.

For additional information, click here.

Tourism

Double Tax Deduction (DTD)  for Inbound Tourism Promotion by STB

This scheme aims to encourage Singaporean tourism companies to promote the provision of services for inbound tourism to Singapore through participation in STB-supported foreign trade fairs/missions.

Overview

• To qualify, a company has to be a resident company, has a permanent establishment in Singapore, and promotes Singapore​ services for inbound tourism.
• Eligible companies can claim a 200% tax deduction on the first $100,000 of qualifying expenditure incurred on STB-supported overseas fairs/missions per Year of Assessment (YA) without obtaining prior support from the Singapore Tourism Board (STB).

For further information, click here.

Double Tax Deduction (DTD) for Approved International Fair by STB

The purpose of this scheme is to motivate  Singapore companies to expand their markets by participating in international trade-oriented exhibitions held in Singapore that are accorded the Approved International Fair (AIF) status by the Singapore Exhibition and Convention BureauTM (SECB).​

Overview

• This scheme allows approved companies to deduct against their taxable income twice the qualifying expenses incurred for participating in AIF events held in Singapore.
• Qualified companies can claim a 200% tax deduction on the first $100,000 of qualifying expenditure incurred on AIF events held in Singapore per YA without obtaining prior support from STB.
• Companies can claim DTD on qualifying expenditure from the Inland Revenue Authority of Singapore (IRAS) when filing their annual income tax returns. 

For additional information, click here.

Aircraft

Aircraft Leasing Scheme

The aim of this scheme is to encourage companies to develop aircraft leasing capabilities and grow the aircraft leasing industry in Singapore. 

Overview

• Approved aircraft leasing companies are eligible for a concessionary tax rate of 8% on income derived from the leasing of aircraft or aircraft engines and withholding tax exemptions on interests and qualifying related payments. 
• The incentive period is limited to five years (can be extended depending on the company’s expansion plans on aircraft leasing activities).
• To qualify for the ALS, companies must establish substantive activities and perform strategic functions in Singapore, including identifying and acquiring aircraft/aircraft engines to be leased, negotiating the leasing terms, managing leases of aircraft/aircraft engines, etc.

For complete information, click here.

Other Tax Incentives You May Want to Apply for

Here some other tax incentive schemes that may interest you.

Mergers & Acquisitions (M&A) Scheme by IRAS

The M&A scheme seeks to encourage Singapore companies, especially small and medium enterprises (SMEs), to grow through strategic acquisitions. Under this scheme, approved companies can enjoy the following tax benefits:

• An M&A allowance on the purchase consideration;
• A stamp duty relief on the agreement for the sale of equitable interest in ordinary shares or instrument of transfer executed in connection with the qualifying share acquisition; and 
•  A double tax deduction (DTD) on transaction costs incurred in respect of the qualifying share acquisition.

For more information, click here. 

Section 13H/Fund Management Incentive (S13H/FMI) by Startup SG

These two schemes aim to encourage investments into Singapore–based businesses and startups. S13H provides a tax exemption for income from funds that meet the scheme’s requirements, while FMI offers a 5% concessional tax rate to fund management companies on income earned from managing funds approved by S13H.

For information about the qualifying criteria, click here.

Double Tax Deduction for Internationalisation (DTDi) by Enterprise Singapore

Double Tax Deduction Scheme for Internationalisation (DTDi) is aimed at companies planning to expand overseas. Approved companies can enjoy a 200% tax deduction on eligible expenses for international market expansion and investment development activities.

For information about the eligibility requirements, click here.

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