The tax incentives introduced by the Singapore government to boost its stock market is a step in the right direction towards strengthening Singapore’s position as a global financial hub, industry experts say.
Neil Synnott, chief commercial officer for Asia at investor services firm IQ-EQ, says the new incentives have the potential to attract more fund managers to expand into Singapore.
“These incentives make Singapore an attractive destination for businesses looking to grow and innovate,” he tells Asia Asset Management.
On February 18, Lawrence Wong, Singapore’s prime minister and finance minister, announced the measures in the 2025 budget to help boost the attractiveness of its stock market.
Singapore-based companies seeking a primary listing will be given a 20% rebate on corporate tax, while those seeking a secondary listing will get a 10% rebate.
The rebates will be capped at S$6 million (US$4.47 million) a year for qualifying companies with a market capitalisation of at least S$1 billion. The company must stay listed for five years and the incentive will be offered until 2027.
Meanwhile, fund management firms will be given a concessionary tax rate of 5% on their qualifying income until 2028 if they or their holding companies acquire a primary listing on the Singapore Exchange and remain listed for five years.
Singapore’s central bank, the Monetary Authority of Singapore also announced plans to launch a S$5 billion equity market development programme (EQDP) to help boost stock market liquidity and support the local fund management industry ecosystem.
The EQDP will be launched by MAS and its Financial Sector Development Fund. It will see MAS and the fund “invest with select fund managers that have the capabilities to implement investment mandates with a strong focus on Singapore stocks”.
Lock Mun Yee, an analyst from CGS International, says the measures will likely benefit Singapore Exchange in the short-to-medium term, potentially raising net new money inflows, local market trading turnover, liquidity, and overall regional interest in the Singapore market.
However, Synnott believes that market liquidity, the regulatory environment, investor confidence and global market conditions will play important roles in attracting investors to Singapore. “If these elements are favourable, the tax incentives could indeed attract new listings and capital,” he says.
As of end-February, there were 614 listed securities on the Singapore Exchange, down from 648 listed securities two years ago. While the number of listed securities has reduced over the past two years, daily average trades have increased from S$1.21 billion in February 2023 to S$1.48 billion in February 2025.
Synnott says the EQDP is likely to encourage fund managers who are already familiar with Singapore’s market and tax regime. However, he adds that to drive more fund managers to invest in Singapore stocks, it may need to be part of a broader strategy that addresses market development, investor relations and “the deepening of the local equity market’s attractiveness in terms of size and liquidity”.