Singapore Tax Incentives for Fintech, AI, and Tech Startups
Singapore has long been recognized as a global hub for innovation, offering a conducive environment for fintech, artificial intelligence (AI), and tech startups.
A significant part of this ecosystem’s appeal lies in the array of tax incentives designed to support and accelerate business growth.
In this article, we’ll explore the key Singapore tax incentives available to startups in these sectors, and how they can be leveraged to maximize growth potential — with guidance from a trusted audit firm in Singapore.
A significant part of this ecosystem’s appeal lies in the array of tax incentives designed to support and accelerate business growth.
In this article, we’ll explore the key Singapore tax incentives available to startups in these sectors, and how they can be leveraged to maximize growth potential — with guidance from a trusted audit firm in Singapore.
1. Startup Tax Exemption Scheme
To encourage entrepreneurship, Singapore offers a Startup Tax Exemption (SUTE) scheme for qualifying new companies:
- 75% exemption on the first S$100,000 of normal chargeable income
- 50% exemption on the next S$100,000
This applies for the first three years of assessment, significantly reducing tax burdens during the startup phase.
Note: Investment holding and property development companies are excluded.
Note: Investment holding and property development companies are excluded.
2. Enterprise Innovation Scheme (EIS)
Introduced in Budget 2023, the Enterprise Innovation Scheme (EIS) encourages R&D and IP development.
Startups can benefit from:
Startups can benefit from:
- 400% tax deductions on the first S$400,000 of qualifying expenses
- 400% deduction on up to S$50,000 for collaborations with polytechnics or ITE
- Option to convert up to S$100,000 of expenditure into a non-taxable cash payout
This is ideal for tech firms investing in AI, machine learning, and software IP.
3. Refundable Investment Credit (RIC)
Launched in Budget 2024, the Refundable Investment Credit supports strategic economic sectors, including fintech and AI.
Key benefits:
Key benefits:
- Up to 50% support on eligible manpower, IP, capital, and professional costs
- Refundable in cash if not fully utilized against income tax
- Available over 10 years, with a four-year refund guarantee
The TY Teoh tax team can guide you through qualifying criteria and claim procedures.
4. Financial Sector Incentive (FSI)
Tech startups that operate within Singapore’s financial services sector may qualify for the Financial Sector Incentive (FSI), offering:
- 10% or 13.5% tax rates on qualifying income
- 5% tax rate for selected high-value activities like derivatives trading and fund management
If your fintech business delivers innovation in payment processing, lending, or investment platforms, this could apply.
5. Finance and Treasury Centre (FTC) Incentive
For companies centralizing treasury operations in Singapore, the FTC Incentive offers:
- Reduced tax rates (as low as 8%)
- Withholding tax exemptions for qualifying overseas interest payments
This supports growth-stage fintech or tech firms looking to optimize cash flow and capital structures from a regional HQ in Singapore.
6. Intellectual Property Development Incentive (IDI)
The Intellectual Property Development Incentive (IDI) encourages R&D commercialization:
- 5% or 10% tax rates on income from developed IP
- Focused on AI, biotech, and software-based innovations
This aligns well with startups investing in proprietary algorithms or platforms.
7. Development and Expansion Incentive (DEI)
The Development and Expansion Incentive supports firms scaling up in Singapore:
- 5% or 10% tax rates on incremental qualifying income
- Valid for up to 10 years
- Aimed at businesses generating significant economic value
Read more in our article on business tax incentives in Singapore.
8. Double Tax Deduction for Internationalization (DTDi)
The DTDi provides:
- 200% tax deduction for qualifying expenses incurred in overseas expansion
- Includes marketing, business development, and trade show participation
Perfect for tech and fintech firms going global — especially regional Southeast Asia plays.
9. Enterprise Financing Scheme (EFS)
While not a direct tax break, the Enterprise Financing Scheme (EFS) offers crucial financial support via:
- Working capital loans
- Venture debt
- Trade and project financing
Startups can use this financing to invest in innovation that qualifies under the EIS, IDI, or DEI — combining financial strength with tax savings.
How to Leverage Tax Incentives Effectively
Here’s how fintech, AI, and tech startups can make the most of these tax schemes:
1. Perform a Tax Incentive Feasibility StudyCommon Examples of Digitization:
Consult an audit and tax advisory firm in Singapore to assess eligibility and build a compliance-ready roadmap.
2. Align Incentives with Growth Strategy
Plan innovation, hiring, and market expansion activities around qualifying incentive schemes. Our digital advisory team helps integrate your tech roadmap with financial planning.
3. Maintain Proper Documentation
Prepare audit-ready records to support claims under EIS, RIC, IDI, and other schemes. TY Teoh’s audit team ensures documentation aligns with IRAS standards.
Why TY Teoh Is the Right Partner for Tech Startups
As a multi-disciplinary audit and advisory firm in Singapore, we specialize in guiding early-stage and scaling businesses through:
- Strategic tax planning
- R&D and IP incentives
- Corporate structuring for growth and investment
- Cross-border compliance and digital transformation
Explore our full suite of services:
- Audit & Assurance
- Tax & GST Advisory
- Digital Advisory
- Business Valuation
Final Thoughts
Singapore’s tax incentives make it one of the world’s most innovation-friendly markets — especially for fintech, AI, and tech startups. But to unlock their full potential, you need more than eligibility — you need strategy, structure, and execution.
At TY Teoh International, we help you move from awareness to action, ensuring you meet compliance requirements while maximising value.
Contact us today to find out which tax schemes your startup qualifies for — and how to take advantage of them effectively.
At TY Teoh International, we help you move from awareness to action, ensuring you meet compliance requirements while maximising value.
Contact us today to find out which tax schemes your startup qualifies for — and how to take advantage of them effectively.
