Singapore extends investment promotion tax incentives; raises quantum for Global Investor Programme

SINGAPORE is extending several investment promotion tax incentives for another five years, even as it prepares to implement global tax rule changes. But separately, individuals will need to invest more to become permanent residents (PRs) under the Global Investor Programme (GIP).

The Pioneer Certificate, Development and Expansion Incentive, and Investment Allowance tax incentives will all be extended till Dec 31, 2028, said Minister for Trade and Industry Gan Kim Yong during the ministry’s Committee of Supply debate on Tuesday (Feb 28).

He stressed that “investment promotion incentives which are aligned with international rules will remain relevant and important” to companies that are not subject to the global minimum effective tax rate under Pillar Two of the Base Erosion and Profit Shifting (BEPS 2.0) initiative.

Pillar Two of BEPS 2.0 introduces a minimum effective tax rate of 15 per cent for multi-national enterprise (MNE) groups with annual group revenues of at least 750 million euros. About 1,800 MNE groups in Singapore meet this criteria, with a majority having group effective tax rates below 15 per cent.

Singapore will implement a domestic top-up tax on these MNE groups from 2025, which will raise effective tax rates to 15 per cent.

Separately, individual investors seeking permanent residency via the GIP will have to invest more, said Gan. He did not specify the new amount or the timing of the change, but said that the Economic Development Board will share more details in due course.

Presently, the GIP accords PR status to eligible global investors who invest at least S$2.5 million here in a business entity, select funds, or family office with assets under management of at least S$200 million.

The investment quantum is being raised across these three options to “ensure greater contributions from these investors, and to direct more funds and resources into our local ecosystem”, Gan said.

The scope of approved GIP funds will also be adjusted to “capture more value from a wider pool of investors”, he added. As at October 2022, GIP investors have injected S$1.62 billion into such funds.