Wooing FDI into Singapore
- Feb 8, 2024
- 1 min read
Singapore’s strategic location, political stability, and talent availability make it a prime destination for multinational enterprises.
The Singaporean government has fostered foreign direct investment (FDI) through various incentives, including tax concessions and grants. However, the upcoming implementation of the OECD's Base Erosion and Profit Shifting Pillar Two initiative, requiring multinational enterprises to pay a minimum effective tax rate of 15%, necessitates a recalibration of these incentives.
About 1,800 multinational enterprises in Singapore will be affected by Pillar Two, but current incentives will remain until at least 2028. These incentives, such as the Investment Allowance Scheme, may need to be expanded to maintain Singapore's attractiveness. New tools like Qualified Refundable Tax Credits (QRTCs) are being considered to support sustainable and innovative activities.
The government’s approach to implementing Pillar Two aims to attract FDI while supporting sectors like AI, sustainability, and healthcare. Reinforcing non-tax incentives and investing in infrastructure are also crucial. The 2024 Budget is expected to strengthen Singapore’s position as a global investment hub, ensuring economic growth and job creation.
Article by Yvaine Gan, Eugene Penafort and Andy Loo for The Business Times. Read more here or in the PDF below.
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