What is the EIS 400% tax deduction for AI in Singapore?

The Enterprise Innovation Scheme (EIS) allows Singapore businesses to claim a 400% tax deduction on up to S$50,000 of qualifying AI expenditure per Year of Assessment (YA 2025-2028). This means for every S$1 spent on qualifying AI tools, you can deduct S$4 from your taxable income, resulting in significant tax savings.

What is the Productivity Solutions Grant (PSG) for AI tools?

The PSG is a Singapore government grant that provides up to 50% funding support for SMEs adopting pre-approved IT solutions, including AI tools for HR, accounting, and customer support. Eligible businesses must be registered in Singapore with at least 30% local shareholding.

Can I claim both PSG and EIS for the same AI tool?

Yes, you can stack both grants. Use the PSG to get 50% funding for a pre-approved AI solution, then claim the EIS 400% tax deduction on your remaining out-of-pocket expense. This combination can reduce the effective cost of AI adoption by up to 80%.

Which AI tools are PSG-approved in Singapore for 2026?

PSG-approved AI tools include solutions for HR/Payroll (QuickHR, JustLogin, Talenox), Accounting (Xero, AutoCount, Volopay), and Customer Support (Zendesk, Freshdesk, Tidio). The full list is available on the GoBusiness Gov Assist portal and SGAI Finder directory.

How do I apply for the PSG grant for AI tools in Singapore?

To apply for PSG: 1) Select a pre-approved AI solution from GoBusiness. 2) Get a quotation from the vendor. 3) Submit your application via the Business Grants Portal (BGP) using Corppass before making any payment. 4) Await the Letter of Offer. 5) Implement the solution and submit your claim.

What are the best AI solutions for businesses in Jurong East Singapore?

Businesses in Jurong East and across Singapore can access PSG-approved AI solutions for accounting (Xero, Volopay), HR (QuickHR, JustLogin), and customer support (Zendesk, Freshdesk). These tools qualify for up to 50% PSG funding and 400% EIS tax deductions.

How much can my Singapore SME save with AI grants in 2026?

A typical Singapore SME spending S$20,000 on AI tools can save up to S$10,000 via PSG (50% funding) plus S$6,800 in EIS tax savings (400% deduction on remaining S$10,000 at 17% tax rate), for a total savings of S$16,800 — reducing the effective cost to just S$3,200.

SGAI Finder - Singapore SME AI Directory

Understanding the SkillsFuture Enterprise Credit (SFEC)

The SkillsFuture Enterprise Credit (SFEC) is a key government initiative designed to encourage employers to invest in both enterprise and workforce transformation. Eligible employers receive a one-off S$10,000 credit to defray out-of-pocket expenses for supported programmes. A crucial feature of the SFEC is that it covers up to 90% of these expenses, significantly lowering the financial barrier for SMEs to invest in crucial areas like AI training.

Who is Eligible for SFEC?

Eligibility for the SFEC is determined by Enterprise Singapore. Generally, companies must have contributed at least S$750 to the Skills Development Levy (SDL) over a qualifying period and have employed at least three Singapore Citizens or Permanent Residents. If your company is eligible, you would have been notified via email. You can also check your SFEC balance on the Business Grants Portal.

The Imperative of AI Adoption for Singaporean SMEs

In today's competitive landscape, AI is not just a buzzword; it's a fundamental business tool. For SMEs, adopting AI can level the playing field, enabling them to compete with larger corporations. AI-powered tools can automate repetitive tasks, provide deep insights into customer behaviour, optimise supply chains, and create personalised marketing campaigns. The failure to adopt AI can lead to being outpaced by more agile and efficient competitors. For companies in areas like Bishan, with its mix of residential and commercial properties, leveraging AI can unlock new opportunities for growth and customer engagement.

Investing in SkillsFuture Enterprise Credit AI training Singapore is a strategic move to ensure your workforce is prepared for this new era. It's not just about implementing new software; it's about cultivating a culture of innovation and continuous learning within your organisation.

How to Use SFEC for AI Training: A Step-by-Step Guide

Navigating the process of using your SFEC for AI training can seem daunting, but it's a straightforward process. Here’s a step-by-step guide to help you get started:

Step 1: Confirm Your Eligibility and SFEC Balance

Before you begin, verify your company's eligibility and check your SFEC balance. You can do this by logging into the Business Grants Portal with your Corppass. This will give you a clear picture of the funds available to you.

Step 2: Identify Your Business Needs and Training Goals

Determine what you want to achieve with AI training. Are you looking to improve operational efficiency, enhance your marketing efforts, or develop new products and services? Having clear goals will help you select the most relevant and impactful training programmes for your team.

Step 3: Find a Suitable SFEC-Eligible AI Training Course

Browse the MySkillsFuture portal for a wide range of SkillsFuture Enterprise Credit AI training Singapore courses. You can filter your search by provider, course fee, and even specific skills. Look for courses that are aligned with your business needs and have positive reviews from other learners. For businesses located in specific areas, such as those looking for AI training courses in Novena, the portal can help you find providers in your vicinity.

Step 4: Enrol Your Employees and Pay for the Course

Once you've selected a course, enrol your employees. You will typically need to pay the course fees upfront to the training provider. Keep all invoices and payment receipts, as you will need them for your claim.

Step 5: Submit Your Claim

After the course is completed, you can submit your claim for the SFEC. This is done through the SkillsFuture for Business portal. You will need to provide details of the course, the attendees, and the costs incurred. The SFEC will then cover up to 90% of your out-of-pocket expenses. _

Case Study: An Insurance Agency in Novena Transforms with SFEC

To illustrate the real-world impact of the SkillsFuture Enterprise Credit AI training Singapore programme, let's consider a hypothetical case study of an insurance agency based in Novena.

The Business: "Novena InsurePro", an established insurance agency with a team of 12 staff. While successful, the agency was facing challenges with inefficient, manual processes for comparing complex insurance policies and qualifying new leads. This resulted in slower response times to client queries and a significant administrative burden on the team. The Challenge: The agency's leadership recognised the potential of AI to automate these processes and free up their advisors to focus on building client relationships. However, the team lacked the necessary AI literacy to implement and utilise these new tools effectively. The cost of comprehensive training for the entire team was also a significant consideration. The Solution: Novena InsurePro decided to leverage the SkillsFuture Enterprise Credit to fund a customised AI literacy programme for its entire staff. They found a suitable training provider offering AI training courses in Novena, which made it convenient for their team to attend. The training focused on practical applications of AI in the insurance industry, including using AI-powered software for policy analysis, lead scoring, and automated client communication. The Financials:

Total Training Cost: S$10,000

SFEC Coverage (90%): S$9,000

Company's Out-of-Pocket Expense: S$1,000

The Outcome: The results were transformative. By using the SFEC, Novena InsurePro was able to provide high-quality AI training to its entire team at a fraction of the cost. Within six months of completing the training, the agency reported a 25% improvement in overall team productivity. Policy comparison time was reduced by half, and the AI-powered lead qualification system helped the team focus on the most promising prospects. This success has encouraged the agency to explore further AI adoption, including developing a proprietary AI tool, and they are now looking into the Enterprise Innovation Scheme (EIS) to benefit from the 400% tax deduction on their AI R&D expenditure. _

Maximising Your Funding: A Comparison of Key Government Grants

While the SFEC is a fantastic resource, it's often most effective when used in conjunction with other government grants. Understanding the different schemes available can help you create a comprehensive funding strategy for your AI transformation. Here's a comparison of the three key grants for Singaporean SMEs:

Grant	Purpose	Support Level	Key Features
SkillsFuture Enterprise Credit (SFEC)	Encourages enterprise and workforce transformation.	S$10,000 credit covering up to 90% of out-of-pocket expenses.	Can be stacked with other grants. Covers both training and enterprise transformation projects.
Productivity Solutions Grant (PSG)	Supports the adoption of pre-approved IT solutions and equipment.	Up to 50% funding support.	Focuses on specific, pre-approved solutions that improve productivity. Great for getting started with off-the-shelf AI tools.
Enterprise Innovation Scheme (EIS)	Promotes R&D and innovation activities.	400% tax deduction on up to S$50,000 of qualifying expenditure.	Ideal for businesses developing their own proprietary AI solutions or engaging in deeper R&D projects.

By strategically combining these grants, a business can significantly reduce the financial burden of AI adoption. For example, a company could use the PSG to adopt a pre-approved AI-powered CRM system, use the SkillsFuture Enterprise Credit AI training Singapore to train their team on how to use it, and then leverage the EIS for a project to further customise and enhance the software for their specific needs.

Conclusion: Your AI-Powered Future Awaits

The journey to AI adoption is a marathon, not a sprint. It requires a strategic approach, a commitment to continuous learning, and the right support. The Singaporean government, through schemes like the SkillsFuture Enterprise Credit, has provided a clear pathway for SMEs to embrace this transformation. By investing in SkillsFuture Enterprise Credit AI training Singapore, you are not just upskilling your workforce; you are investing in the future resilience and competitiveness of your business.

Ready to take the next step? Explore a curated list of AI solution providers and training courses on the SGAI Finder platform. Your AI-powered future is closer than you think.

References

[1] Enterprise Singapore. (2026). SkillsFuture Enterprise Credit (SFEC). Retrieved from https://www.enterprisesg.gov.sg/financial-support/skillsfuture-enterprise-credit

[2] MySkillsFuture. (2026). Course Search. Retrieved from https://www.myskillsfuture.gov.sg/content/portal/en/portal-search/portal-search.html?q=artificial+intelligence+ai

How to Use SkillsFuture Enterprise Credit for AI Training in 2026