How Budget 2026 helps Singapore’s businesses invest, scale and compete

Internationalization as a strategic imperative

Even as Singapore widens its inbound aperture to attract a broader pool of high-growth firms, the outbound strategy to help local enterprises scale internationally must remain equally sharp. Budget 2026 reinforces this dual-pronged playbook by deepening support for internationalization and accelerating workforce upgrading. 

Recognizing that bolder internationalization is central to Singapore’s next phase of relevance and resilience, support levels for internationalization grant schemes will be enhanced to up to 70% for small and medium enterprises (SMEs) and up to 50% for non-SMEs. 

The Market Readiness Assistance grant — which defrays costs of overseas expansion, such as market promotion, business development and setup — will also be enhanced. Support will rise to up to 70% (from up to 50% previously) between 1 April 2026 and 31 March 2029.  

While this is a generous uplift, the S$100,000 cap per company per market remains unchanged. The encouraging news is that this cap, previously applicable until 31 March 2026, will also be extended — providing firms with a continued runway to deepen overseas efforts. 

Whether the cap — which increased fivefold from S$20,000 to S$100,000 in 2020 — will shift again before its sunset date remains a key development to watch. 

Starting the second half of 2026, the enhanced grant will support enterprises to deepen activity in existing overseas markets and not just break into new ones, acknowledging that overseas connections take time to bear fruit.  

Enhancements to the Double Tax Deduction for Internationalisation (DTDI) further sweetens internationalization efforts. While the scheme was extended in the previous Budget to 31 December 2030, the 200% deduction cap is now set to more than double from S$150,000 to S$400,000 each tax year. This sizable increase should provide a stronger impetus for companies to commit to deeper, more sustained market development rather than one-off exploratory efforts.  

The breadth of qualifying activities under the DTDI scheme will also be widened, notably to cover investment feasibility and due diligence studies, master licensing, and franchising, to name a few. This reflects the government’s agility in adapting to changing market needs of companies, similar to how e-commerce-related qualifying expenditure was included back in 2023.  

At the same time, higher loan ceilings under the Enterprise Financing Scheme give firms the financial headroom to undertake more capital-intensive, higher-risk overseas ventures. 

Future-proofing the workforce

Findings from the EY 2025 Work Reimagined Survey show that 89% of employees in Singapore already use artificial intelligence (AI), yet only 7% deploy it in advanced, transformative ways. Just 5% report receiving sufficient training, indicating a significant capability gap that must be addressed for AI-enabled productivity gains to be realized. 

With automation and AI reshaping industries faster than organizations can redesign roles, Singapore is moving decisively to stay ahead. A new National AI Council will be established alongside a suite of national AI missions to accelerate adoption and build strategic capabilities. The fact that PM Wong will personally chair this council elevates AI to a national strategic priority. 

Singapore’s competitiveness hinges on how quickly enterprises can harness AI at scale — confidently and responsibly — and how workers can upskill and transition to higher-value activities in an AI-enabled economy.

The S$400 million Enterprise Workforce Transformation Package, announced in the previous Budget and slated to roll out from 2026, demonstrates Singapore’s intent to future-proof its workforce through structured upskilling and industry-relevant capability-building. The latest announcement to strengthen AI literacy across all institutes of higher learning builds on this foundation. 

Together, these initiatives form a coherent national strategy: equipping today’s workers and tomorrow’s graduates to navigate intelligent ecosystems. This integrated approach is crucial as Singapore faces an aging, multigenerational workforce. 

Ultimately, this alignment between investment ambition and workforce transformation ensures that as Singapore courts the next generation of global companies, it also equips its own enterprises and workers to compete confidently in a higher-value, skills-based terrain.