Singapore Strengthens Investment Promotion with New Tax Credit and Fund Boost
Singapore is introducing a new Refundable Investment Credit (RIC) as part of its strategy to maintain competitiveness and attract investment in high-value economic activities. Finance Minister Lawrence Wong announced the initiative in the Budget 2024 speech, emphasizing the need for global companies with the right expertise to invest in Singapore.
The RIC is designed to encourage substantial investments in key sectors, including manufacturing, digital services, innovation, research and development, and green transition activities. The tax credit comes with a refundable cash feature, allowing companies to offset corporate income tax, with any unused credits refunded within four years.
To further support this initiative, the government is adding S$2 billion to the National Productivity Fund, strengthening efforts to promote investments in productive capacity and innovation.
The Economic Development Board (EDB) and Enterprise Singapore (EnterpriseSG) will administer the RIC, providing tax credits based on qualifying expenditures, such as capital, manpower, and training costs, among others. More details will be available on the EDB and EnterpriseSG websites later this year.
This move comes at a time when global competition for investment is intensifying, with many countries offering significant subsidies. However, Wong emphasized that Singapore will not engage in a bidding war but will continue to focus on strategic investments that align with its long-term economic goals.
