Singapore’s Path to Net Zero: Incentives and Ecosystem for Green Enterprises

Singapore’s Path to Net Zero: Incentives and Ecosystem for Green Enterprises


Share on facebook
Share on twitter
Share on linkedin
Share on email


Share on facebook
Share on twitter
Share on linkedin
Share on email

With the climate change crisis intensifying all around the globe, different countries are committing to ambitious sustainable targets. Singapore, one of the global business hubs, stands out with its initiative to achieve net zero emissions by 2050. This is a formidable goal for a small island nation with limited land and natural resources.

The government has developed its Singapore Green Plan 2030, which defines the blueprint of concrete sustainability targets for the next decade. According to this plan, by 2026, the country aims to reduce the amount of waste sent to landfill per capita each day by 20%. The plan also seeks to increase the output of solar energy, while Singapore is likely to turn 80% of its buildings by 2030. Enterprises bracing up for Singapore company formation, therefore, need to align their strategies to these sustainability goals. Over the years, Singapore has turned into an attractive destination for eco-friendly businesses. For enterprises incorporated in Singapore, it’s essential to seek professional support from experts to ensure compliance.

Creating a Sustainable Ecosystem in Singapore

Singapore, popularly referred to as the ‘Green City’, offers a robust commercial infrastructure that supports eco-conscious businesses. Currently, the country is prioritizing the development of green buildings, reducing waste, and adopting clean energy solutions. With most of its buildings turning green by 2030, Singapore eyes an 80% improvement in energy efficiency compared to the levels in 2005. Eco-friendly businesses operating in the country have the privilege to choose from a wide range of green options.

Green Tech Industry in Singapore

Singapore has put in consistent efforts to achieve peak energy efficiency, incorporating green technologies. While the country has limited natural resources, the Research, Innovation, and Enterprise Plan (RIE2025) of the Singapore government supports enterprises embracing sustainable practices. Businesses minimizing waste by switching to additive manufacturing can qualify for certain privileges. Moreover, businesses developing sustainable solutions can access abundant resources in Singapore, thanks to its government initiatives. Enterprises can also collaborate with the government, academic institutions, and other businesses to spearhead the green tech industry in the country.

Singapore’s Talent Pool Driving its Green Economy

As a leader in sustainable development in the region, Singapore recognizes the importance of a skilled workforce for a sustainable future. In this country, academic institutions are offering sustainability courses, so that graduates with adequate skills can tap for green jobs. Working adults can also undergo training through sustainability-related programs to acquire transferable green skills. Thus, they can gain competence in crucial aspects like green finance, green engineering solutions, and managing carbon footprint. In Singapore, eco-friendly businesses have access to a pool of talented professionals having proper knowledge and skillsets. Thus, the thriving green economy continues to consolidate in the country, with its reliable pool of talent.

Green Projects Incentives from the Government

The government in Singapore is leaving no stone unturned as the country aims to achieve its net zero emissions target. To make the green transition an achievable goal, the government has come up with generous incentives, ranging from tax benefits to cash grants.

Tax Benefits

The Refundable Investment Credit (RIC) was introduced in Singapore’s Budget in 2024. For investing sizable amounts in projects with decarbonization goals, businesses are eligible to receive a tax credit. This tax credit can be offset against the payable corporate tax income. It will be awarded only on qualifying expenses like manpower costs, capital expenditures, logistics and freight costs, and intangible asset costs. If any tax credit remains unutilized, the company will receive a cash refund within four years. Foreign enterprises doing business in Singapore can significantly benefit from these provisions.
Financing Schemes and Cash Grants

Different government agencies in Singapore are committed to supporting sustainable businesses in the country. These enterprises are eligible for cash grants that cover various business expenses. For instance, the Resource Efficiency Grant for Emissions (REG(E)) co-funds expenditures for industrial facility projects for verifiable and measurable mitigation of carbon. The government has set a benchmark of at least 500 tonnes of carbon footprint reduction per annum for businesses to qualify for this grant, which would cover around 50% of the qualifying costs. This Grant helps businesses cover a part of their expenses incurred to adhere to mandates related to climate.

The REG(E) was first introduced in 2022 for local companies in the retail, food manufacturing, and food services sectors. During the 2024 Budget, it was extended to other sectors like data centres, maritime, and construction.

The Sustainability Reporting Grant helps businesses with at least S$100 million annual revenue prepare their first sustainability report. It will cover up to 30% of the qualifying cost, while the government capped the amount at S$150,000 per company. For SMEs, a new program will be launched to streamline the path to preparing their first sustainability reports. It will cover as much as 70% of the eligible costs for the first year and 50% for the two subsequent years.

Often, establishing a start-up company in Singapore comes with obligations to meet sustainability goals. Startups and businesses can seek loans up to S$50 million from the Enterprise Financing Scheme – Green to support green projects.

What Should Businesses Expanding to Singapore Do?

Businesses expanding to Singapore often need to invest in new materials, technologies, and processes to comply with the stringent sustainability goals in the country. In the short run, no significant cost savings may be visible. However, enterprises benefit from increased profitability over the long run, along with enhanced brand reputation.

Here’s what businesses expanding to Singapore must do:

  • Seek funding: Acquire support from the Enterprise Financing Scheme to support upcoming green projects.
  • Cost-effective approach: Take advantage of tax credits and grants on expenses incurred on adopting sustainable practices.
  • Position the brand as a leader: Establish the company as a frontrunner in the green economy to attract eco-conscious investors and customers.

During Singapore company formation, forward-thinking businesses seek comprehensive professional support from the IMC Group. With experts guiding them through the complex regulatory norms and helping in maximizing government funding, tax benefits, and credits, businesses can confidently achieve their sustainability goals.

Leave a Reply

Your email address will not be published. Required fields are marked *

Your Vision, Our Mission.
Let's Discuss.