Singapore has long been a popular destination for entrepreneurs in search of a stable and innovative business environment. In February 2025 alone, 4,383 new companies were formed in Singapore, bolstering the country’s reputation as a prime location for business registration and growth. This regulatory update outlines the latest economic and government changes in Singapore, offering valuable insights for current business owners, aspiring entrepreneurs looking to launch or expand their ventures, and investors tracking emerging opportunities.

Singapore’s Economic Outlook 2025: 5 Key Trends

Despite global uncertainties, Singapore’s economy remains resilient and poised for growth, with a projected growth rate of around 2.8%. Key sectors such as electronics, ICT, finance, and trade-related services are expected to drive expansion. A fiscal position that is better than expected not only bolsters confidence but also allows for additional support measures amid an evolving global landscape.

Five core themes are shaping this dynamic outlook. First, robust growth prospects are underpinned by manufacturing and tech innovations, including rising demand in semiconductors and AI-driven services. Second, the Johor-Singapore Special Economic Zone presents new opportunities for regional integration by leveraging complementary strengths. Third, inflation is expected to ease to pre-pandemic levels, reflecting controlled domestic cost pressures and stable global commodity prices. Fourth, a balanced fiscal policy is designed to address both long-term investments and immediate challenges, while finally, adjustments in the Singapore Dollar Nominal Effective Exchange Rate policy will help sustain the nation’s resilience against global volatility.

Budget 2025: New Business Support Initiatives

Singapore’s Budget 2025 introduces a suite of tax incentives designed to attract companies and fund managers to list on the Singapore Exchange and boost local economic activity. Under the new measures, Singapore-based companies that secure a primary listing on SGX will benefit from a 20% corporate income tax rebate, while those with secondary listings featuring share issuance will receive a 10% rebate. These incentives are available for five-year periods, with annual caps set at S$6 million for companies with a market capitalization of at least S$1 billion, and S$3 million for smaller entities. The scheme is open for applications until December 31, 2027.

For fund managers, Budget 2025 offers an enhanced Concessionary Tax Rate (CTR) of 5% on qualifying income, provided they achieve a primary listing on SGX and maintain it for five years. In addition, fund managers stand to gain a corporate tax exemption on income derived from funds that are substantially invested in Singapore-listed equities, subject to meeting specific criteria such as minimum professional headcount, assets under management, and dividend distribution requirements. These initiatives aim to reinforce Singapore’s attractiveness as a financial hub, with further details on the measures expected to be released in the coming days.

Pre-filled Tax Returns: Benefits for Over 2 Million Employees

Over 2 million employees — roughly 9 in 10 covered under the Auto-Inclusion Scheme (AIS) — will enjoy the convenience of pre-filled tax returns for the Year of Assessment 2025. This initiative, facilitated by the Inland Revenue Authority of Singapore (IRAS), requires approximately 120,000 AIS employers — including 12,500 new entrants — to electronically submit their employees’ 2024 income data by March 1, 2025. This streamlined process supports the No-Filing Service (NFS) or Direct Notice of Assessment (D-NOA) system, reducing the administrative burden for both employees and the tax authority. However, non-compliance remains a concern; in 2024, about 11,000 employers missed the AIS deadline, resulting in delayed or inaccurate assessments for 140,000 employees.

To ensure timely and accurate tax assessments, strict penalties have been imposed on non-compliant employers. Those failing to meet the deadline can be fined up to S$5,000, while key personnel may face fines of up to S$10,000 or even imprisonment for up to 12 months. Common errors include omissions of taxable benefits and under-reporting of income, which can lead to miscalculations in employees’ tax bills. The IRAS also encourages employers to promptly correct any past inaccuracies under its Voluntary Disclosure Programme, ensuring that both current and future assessments remain reliable and efficient.

Importance of Tax Compliance: Mother and Son Convicted for Misleading IRAS

In a landmark case during a Stamp Duty audit, 56-year-old Mdm Ng Chiew Yen and her 26-year-old son, Tan Kai Wen, became the first individuals to be convicted for providing false and misleading information to the Inland Revenue Authority of Singapore. The pair were charged under Section 65(2) of the Stamp Duties Act 1929 for their involvement in a two-step “99-to-1” property purchase arrangement, a scheme designed to reduce Additional Buyer’s Stamp Duty liabilities. Their actions, which included drafting multiple versions of an email and tampering with WhatsApp messages, were part of a deliberate attempt to mislead IRAS during the audit.

The case underscores the strict legal consequences of providing false information during tax audits. Both Ng and Tan received two-week prison sentences, reinforcing the message that any attempt to subvert the tax system carries significant risks. This conviction serves as a stark reminder that full transparency and cooperation with IRAS are essential, and that tampering with information not only compromises the integrity of tax assessments but also invites severe penalties.

Understanding Exchange Rates in Tax Filings

Accurate conversion of foreign currency amounts into Singapore dollars is a critical aspect of tax compliance. For each year of assessment, the average exchange rate is determined by summing the end-of-month exchange rates over the relevant basis period and dividing that total by the number of months in that period. For example, if a company is newly incorporated in March 2023 and its first basis period runs from March to December 2023, the average exchange rate for its YA 2024 tax return will be calculated by adding the end-of-month rates for those 10 months and dividing the sum by 10.

To simplify this calculation, taxpayers can use the Exchange Rate Search Function, which retrieves average exchange rates computed from data extracted from the website of the Monetary Authority of Singapore. This tool is particularly useful for companies with tax filings from YA 2021 onwards, ensuring that all foreign currency transactions are accurately converted for reporting purposes. Adhering to these guidelines helps maintain consistency and compliance in tax filings, minimizing the risk of errors in the conversion process.

MOF & ACRA Respond to NRIC Disclosure Review

In response to the Review Panel’s findings on the full NRIC number disclosure in the People Search function of ACRA’s new Bizfile portal (from 9 to 13 December 2024), ACRA has accepted the recommendations and acknowledged the shortcomings that led to the incident. The agency apologised for the oversight that caused public anxiety, noting that the Public Service did not meet its usual high standards. To address these issues, ACRA is enhancing internal communications with other agencies, ramping up staff training, and instituting more frequent system reviews to identify and mitigate data security risks. In addition, the agency is strengthening its oversight of vendors through refined management frameworks, increased performance assessments, and rigorous user testing before new system launches.

The HR and Finance Committee of the ACRA Board has also thoroughly reviewed the roles and responsibilities of the officers involved, taking steps to hold them accountable through revised performance assessments, counselling, and additional training. The Ministry of Finance (MOF), as ACRA’s parent ministry, is fully supporting these corrective actions and will share the learnings with other MOF agencies. This collaborative effort underscores a commitment to preventing such incidents in the future and restoring public trust in the integrity of Singapore’s data protection and disclosure practices.

Enhanced Verification for Mobile Wallet Users by Singapore Banks

In light of a surge in phishing scams involving the fraudulent provisioning of debit and credit cards into mobile wallets, major card-issuing banks in Singapore have updated their fraud surveillance measures. The Association of Banks in Singapore (ABS) reported that these scams, which trick customers into providing sensitive card details and one-time passwords on phishing websites, enabled fraudsters to gain unauthorized access to mobile wallets and make illicit purchases. Thanks to these enhanced measures, banks prevented S$53.9 million in losses in Q4 2024.

Looking ahead, banks will introduce additional verification requirements — such as in-app controls and digital token authentication — for provisioning cards onto mobile wallets by July 2025. Moreover, proactive steps will be taken to remove cards linked to mobile wallets if any indicators of fraudulent activity are detected. Customers are advised to set low transaction notification thresholds and immediately contact their banks upon noticing any unauthorised activity. This will further reinforce the collective effort to safeguard digital payments in Singapore.

3,000 One Passes Awarded to Top Foreign Talent in 2024

Singapore continues to enhance its global competitiveness by recognising outstanding foreign professionals. In 2024, the government awarded 3,000 One Passes to top-tier talent, reinforcing its commitment to attract high-calibre individuals who can contribute significantly to the nation’s innovation and economic growth.

This initiative not only provides recipients with long-term stay and work privileges but also signals to the international community the welcome Singapore extends to foreign expertise. By streamlining the talent acquisition process, Singapore is positioning itself as a prime destination for global professionals seeking a dynamic business environment.

Monitoring the Impact: Concerns Over the Johor-Singapore SEZ

The Johor-Singapore Special Economic Zone (SEZ) has been heralded as a key initiative to deepen regional integration and boost economic activity by leveraging the complementary strengths of Singapore and Johor. However, concerns persist regarding certain operational and regulatory challenges that could prevent it from reaching its full potential. Stakeholders worry about labour shortages, complex cross-border logistics, and the overall ease of doing business within the SEZ framework.

In response, authorities are closely monitoring the situation to ensure that these challenges are addressed promptly. Efforts are underway to enhance collaboration between the two governments, with a focus on smoothing regulatory processes and improving infrastructure, thereby safeguarding the economic benefits of the SEZ while mitigating potential risks.

DBS Survey: Most SMEs Plan to Invest in GenAI Solutions

A recent DBS SME Pulse Check Survey, engaging 110 companies from various industries, revealed that more than 70% of Singapore SMEs are gearing up to invest in generative AI solutions. According to the survey, 73% of respondents plan to inject capital into GenAI-powered solutions, while 72% are committed to improving their workforce’s skills to effectively adopt these transformative technologies. Notably, 32% of SMEs have already begun integrating GenAI tools into areas such as marketing and communications.

Respondents highlighted the need for government grants, access to affordable digital solutions, and practical guidance on the right tools to accelerate their digital transformation. Additionally, with a significant number of SMEs aiming to expand regionally, the survey underscores the critical role of innovative technologies like GenAI in enhancing competitiveness amid ongoing macroeconomic uncertainties.

How We Can Help

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