Support for heartland businesses, local firms going abroad among new MTI initiatives to grow economy
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A new Vibrant Heartlands Programme for Merchants’ Associations will also be established to support placemaking activities and events in the heartland.
ST PHOTO: JASON QUAH
SINGAPORE - Singapore has built a strong economy over the last six decades, driven by its pro-business environment as well as sustained investments in infrastructure and education.
But the Republic is set to face potential headwinds from recent geopolitical developments, with the multilateral free trade system under stress and at risk of being fractured, Deputy Prime Minister Gan Kim Yong said on March 6 in the debate over the Ministry of Trade and Industry’s (MTI) 2025 budget.
DPM Gan, who is also Minister of Trade and Industry, noted that trade tariffs between the United States and its trading partners
Yet, there are opportunities for the Republic, such as in artificial intelligence (AI), digitalisation and the green economy.
These are the initiatives announced by MTI to help Singapore take advantage of those opportunities and strengthen its economy and businesses:
Support for heartland businesses
Senior Minister of State for Trade and Industry Low Yen Ling announced a new Enhanced Visual Merchandising Programme, which will help heartland shops “refresh their stores and gain visual appeal to attract more customers”.
It will also offer heartland shops support in training, consultancy and the makeover of their shopfronts.
The total qualifying cost will be raised fivefold, increasing from a maximum of $12,000 to $60,000.
A new Vibrant Heartlands Programme for Merchants’ Associations will also be established to support placemaking activities and events in the heartland.
Bite-size and pre-scoped activities would receive grant support on qualifying costs of $3,000 per application, while larger-scale customisable placemaking events would receive grant support on qualifying costs of up to $200,000 per application, said Ms Low.
The Visual Merchandising Programme was launched in 2021 to help heartland enterprises refresh their store layouts and develop capabilities in digital and visual merchandising.
Many heartland shops have seen their footfall and sales increase by 20 per cent as a result of this programme, said Ms Low.
Heartland shops have also benefited from the launch of CDC vouchers. To date, Singaporeans have spent more than $1 billion at about 23,000 heartland businesses and hawker stalls,
More funding for companies
Singapore will launch the Long Term Investment Fund and deploy more than $200 million of government capital over a longer time horizon than the typical three- to seven-year timeframe.
“This caters to enterprises with longer and more complex growth trajectories that will require more time to fully realise their potential,” said DPM Gan.
A $1 billion Private Credit Growth Fund targeted at local enterprises with strong growth potential will also be launched.
DPM Gan pointed out that unlike traditional debt, private credit has the flexibility to meet the specific needs of companies looking to scale up quickly.
Private credit also allows companies and founders to retain business ownership and control, rather than giving it up through equity.
“Some of them will require tailored financing solutions to support their unique growth strategy, such as international mergers and acquisitions or large overseas capital investments – these solutions may not be readily available in Asia through traditional financing today,” DPM Gan added.
Singapore has allocated over $1.8 billion in the past five years in equity investment funds to support enterprise growth, but there is room to boost its equity and debt financing toolkit to better support enterprises’ diverse growth strategies, he added.
Support for internationalisation
The Government will enhance support for firms seeking to internationalise.
First, the maximum loan quantum for the Enterprise Financing Scheme – Trade Loans will be permanently doubled from $5 million to $10 million.
“We have considered feedback from the business community, including the Singapore Business Federation and PwC, and would like to meet this need for financing,” said Ms Low.
Second, the Double Tax Deduction for Internationalisation will be extended for the next five years.
Ms Low said that enterprises with expansion plans can continue to benefit from a 200 per cent tax deduction on eligible expenses for overseas market expansion and investment development activities.
Third, the $100,000 Market Readiness Assistance Grant cap will be extended by one more year to March 31, 2026.
“This is in response to industry feedback that many businesses have spent the last two to three years getting back on their feet after Covid-19,” Ms Low said.
The Government will also expand the scope of the Enterprise Financing Scheme – Mergers & Acquisition to cover targeted asset acquisitions, such as intellectual properties and contracts, without a corresponding equity purchase. The pilot will last five years, from April 1, 2025 to March 31, 2030.
“This will help unlock loan financing for enterprises to acquire specific and complementary assets of a target’s business that can enhance their growth prospects without having to buy out the target business and, therefore, take on its liabilities,” said Ms Low.
She noted that Enterprise Singapore supported more than 2,300 companies in 2024,
Companies that undertook internationalisation projects saw a projected increase in annual revenue of $8.8 million per company compared with $7.7 million in 2023, she added.
More clarity, less red tape
The Government will set three Statements of Commitment to guide its efforts to increase regulatory agility and reduce compliance burden for businesses.
First, all relevant agencies will publish service standards for the processing of business regulatory applications to provide greater clarity for companies.
“We will endeavour to streamline service standards to 30 working days or less where feasible,” DPM Gan said.
Second, the Government will increase the validity period of regular business licences to at least three years where possible, with an aim of reaching five years.
This will provide greater certainty for businesses, especially for those undertaking longer-term growth plans, DPM Gan said.
Third, the Government will continue to streamline regulatory processes to facilitate concurrent rather than sequential approvals where possible. It will also streamline information requests across agencies.
The Small and Medium Enterprises Pro-Enterprise Office (SME PEO),
This comes after recommendations by the Alliance for Action on Business Competitiveness, a public-private partnership set up in February 2024, released 27 recommendations on manpower, land, and regulatory issues.
“Working with the Pro-Enterprise Panel and respective regulatory agencies, SME PEO will be the Government’s key coordination unit to aggregate business feedback and improve regulations at the systems level,” said Ms Low.
She also said existing SME centres will be enhanced to offer a wider range of business advisory services and programmes.
“Today, there are 10 SME Centres across Singapore, helmed by trade associations and chambers (TACs),” she noted.
Ms Low said that the business advisers at these centres will be armed with new tool kits to provide enhanced one-to-one business advisory services, workshops and group-based upgrading projects where multiple businesses facing similar problems can adopt a common solution.
“We will continue to partner closely with our TACs to enhance SME Centres’ offerings and extend our reach to more businesses,” she said.
She added that the Government will continue investing in and improving its digital platforms, such as the GoBusiness portal and EnterpriseSG’s Business Grants Portal.
Boosting research and innovation
The Agency for Science, Technology and Research’s (A*Star) biomedical research infrastructure will be extended to the greater one-north area.
This is an approximately $500 million effort, and is aimed at strengthening Singapore’s biomedical R&D ecosystem in two ways, said Second Minister for Trade and Industry Tan See Leng.
A*Star will be located closer to key partners like the National University Health System’s clinical community and venture builders, making it a new attraction point for industry players and talent.
It will redesign its laboratories and workspaces to promote interdisciplinary collaboration across research institutes.
A*Star will also introduce new biopharmaceutical manufacturing programmes with its partners – the Singapore Cell Therapy Advanced Manufacturing Programme 2.0, and the Process Accelerator for Cell Therapy Manufacturing – or Pactman.
Dr Tan noted that Singapore has invested $28 billion under the Research, Innovation and Enterprise 2025 plan.
Such investments enable more firms to produce cutting-edge technologies, create good jobs, and maintain Singapore’s competitiveness, he added.
Meanwhile, the Land Intensification Allowance (LIA) scheme will be extended and enhanced to unlock new industrial space.
Companies receiving LIA approval during the next five years will continue to enjoy tax allowance on the full qualifying costs over 15 years.
From 2026, the Government will make it easier for companies to qualify for LIA, so that they can optimise space and integrate operations with related businesses.
Building users and LIA recipients can be considered related if they own more than 50 per cent shareholding of each other, down from the current threshold of at least 75 per cent.
Industrial landlord JTC will also introduce four initiatives to provide greater flexibility to companies.
First, companies with new leases on greenfield industrial land will be offered additional three years of lease tenure to cover the development and building period.
Second, high-performing companies will have more flexibility to extend their leases in shorter periods, for incremental business investments.
JTC will introduce a new five-year Flexible Lease Extension Initiative, to give eligible companies on JTC’s 20-year leases the option to extend their leases by up to two tranches of five years.
Third, JTC will bring forward the lease renewal application period from the current six years, to 10 years before lease expiry.
Fourth, it will also broaden its definition of plant and machinery investments, which is a key criterion for lease renewal.
