Budget 2025: Quick takes on tax incentives for companies, fund managers that list in Singapore

Protege Fund Services
Feb 18
5 min read

First Published by the Business Times on Feb 18, 2025 · 07:27 PM - Updated Wed, Feb 19, 2025 · 12:58 AM

The listing Corporate Income Tax rebate will be introduced for companies and registered business trusts that are tax residents in Singapore. PHOTO: YEN MENG JIIN, BT

TAX incentives will be introduced for Singapore-based companies and fund managers that choose to list in the city-state and grow their economic activities here, said Finance Minister Lawrence Wong in his Budget speech on Tuesday (Feb 18).

The moves are part of the first set of measures developed by the equities market review group that was set up by the Monetary Authority of Singapore and is chaired by Second Minister for Finance Chee Hong Tat.

The three tax incentives will target new corporate listings, new fund manager listings and fund managers’ qualifying income arising from funds invested substantially in Singapore-listed equities.

The listing corporate income tax rebate will be introduced for companies and registered business trusts that are tax residents in Singapore.

Here are some quick takes from analysts and observers on the latest announcement:

Jimmy Seet, capital markets partner at PwC Singapore

The initiatives announced today are a commendable first step to attract companies to list here. The tax incentives introduced will undoubtedly make the prospect of listing in Singapore more appealing by enhancing the cost-effectiveness and overall feasibility of the process.
However, while tax incentives are a crucial element, they are not the sole factor in attracting companies to list in the Republic.
A vibrant and dynamic equity market is equally essential to sustain and amplify this interest. For a listing destination to be truly attractive, it must offer a robust, liquid, and responsive market environment.
To achieve this, the Singapore Exchange (SGX) must continue to enhance its market infrastructure, regulatory framework, and investor outreach. Initiatives to improve market accessibility, encourage broader participation from retail and institutional investors, and ensure a transparent and fair regulatory environment will be pivotal in attracting companies to list here.

Andrew Thompson, partner and head of private equity at KPMG Asia-Pacific

Growing the liquidity and scale of the Singapore public capital markets is a key part of boosting the Republic’s relevance as a global and regional financial hub. We welcome this initiative that may support this goal and also support the success of home-grown businesses.

Ooi Chee Keong, partner and head of capital markets at Forvis Mazars in Singapore

The tax incentives and income tax rebates can serve as a motivating factor for companies to pursue a public listing.
However, what matters most to investors is their ability to exit with a profit. Market liquidity is a far more critical factor for investors than mere incentives and grants.
While the measures introduced in Singapore’s Budget 2025 may provide a short-term boost to the number of initial public offerings (IPOs), sustaining long-term market growth requires more than just financial incentives.
To ensure a vibrant and liquid market, we need strong institutional investors, market makers, and a robust ecosystem that facilitates active trading. Without sufficient liquidity, even well-incentivised listings may struggle to attract investor interest and long-term capital commitment.
Additionally, competition from regional markets such as Malaysia’s Bursa, the Stock Exchange of Hong Kong, and emerging exchanges in South-east Asia poses a serious challenge. These markets are actively positioning themselves as attractive IPO destinations, offering deep investor pools, vibrant trading ecosystems, and access to a broader base of institutional and retail investors. Singapore must differentiate itself by fostering a more dynamic market, attracting high-growth companies, and enhancing investor participation.
To ensure long-term sustainability, the city-state needs to strengthen market-making mechanisms, encourage broader institutional engagement, and attract innovative, high-growth sectors that appeal to both local and international investors. Without these structural improvements, the impact of short-term incentives may be limited, and SGX may continue to face headwinds in retaining its competitive edge.

Evelyn Lim, executive director of tax advisory at BDO Singapore

With the suite of tax measures to encourage listing, I am certainly hopeful that the Singapore equities market will be revitalised.
While any tax incentives available are good, measures such as grants to defray cost in the listing process would be more impactful and effective in enticing companies to list on the local bourse.

David Sandison, head of tax at Grant Thornton Singapore

A large chunk of the entities listed on the SGX are Singapore companies either acting as holding companies for Singapore subsidiaries or overseas businesses, and whose income (in the form of dividends) will be largely exempt from Singapore tax anyway.
It is therefore not clear how much of a spur (the incentives) will be to encourage businesses to list in Singapore. The most important feature of a stock exchange usually is facility of raising capital, which in turn is a function of liquidity.
Although not a quick fix, continuing to refine and renegotiate Singapore’s tax treaties to make them more competitive particularly in relation to new frontier markets could be of assistance.
As for the Budget initiatives announced, it is not clear how much they will move the dial. They can only be part of a package of improvements that overall are moving in the right direction. There would appear to be no silver bullet that will hit the target in the near term. This looks like a re-building rather than refurbishment.

Ajay Kumar Sanganeria, partner and head of tax at KPMG in Singapore

The tax incentives introduced to encourage listings on SGX represent a commendable step towards bolstering Singapore’s equity market. However, to truly attract a substantial influx of companies and fund managers, further measures are essential.
Addressing existing concerns, such as improving liquidity, trading volume and enhancing stock valuations, will be critical to establishing SGX as a more competitive and attractive listing venue.
Achieving improved liquidity and trading volume on SGX demands a combination of targeted regulatory and market-driven actions.
Potential measures may include reducing transaction costs for trading Singapore-listed shares, providing clarity on the non-taxation of gains derived from such trades, and incentivising active participation from institutional investors, including pension funds, mutual funds and hedge funds.
While some benefits of these initiatives may emerge in the near term, their full impact on market depth and vibrancy will likely materialise over the medium to long term as these changes gain traction and market confidence grows.
One of the main challenges confronting the SGX is the strong allure of US stock exchanges which hold a significant share of global capital. Many companies perceive a US listing as the ultimate milestone, driven by the larger investor base, higher liquidity and valuation premiums typically associated with these markets.
The introduction of tax rebates for companies listing in Singapore is a promising step towards enhancing the short-to-medium-term appeal of the local equities market. However, the key question remains whether these incentives will generate sustainable momentum over the long term.
To truly revitalise the Singapore equities market, additional efforts may be required to address broader structural issues, such as enhancing market depth, fostering investor interest, and showcasing the long-term benefits of a Singapore listing.