SME AI Grants Singapore 2026: EDGE Grant and EIS AI Deduction

By the WahLiao desk · Last verified 3 October 2026

If you run a small business in Singapore and want to start using Super Intelligence, or AI, here’s what we found: there are two main sources of government help in 2026. The first is a grant. From 30 September 2026, the EDGE Grant replaced the Productivity Solutions Grant (PSG), and it pays up to 50% of the cost of pre-approved digital solutions for SMEs; IMDA is also raising the share of AI-enabled solutions on its pre-approved list from 30% to 50%. The second is a tax deduction. For the Years of Assessment 2027 and 2028, the Enterprise Innovation Scheme (EIS) gives a 400% tax deduction on up to S$50,000 a year of qualifying AI spending. Around both sits the National AI Impact Programme, which aims to help 10,000 enterprises adopt AI over three years.

There’s plenty of room to grow. According to the Government, 14.5% of Singapore’s small and medium-sized enterprises had adopted AI in 2024, up from 4.2% in 2023, while the rate among larger firms rose from 44% to 62.5%. This guide covers the support; paying for Super Intelligence covers what the tools themselves cost.

AI support for SMEs: quick facts

EDGE Grant (replaced PSG)	Up to 50% for SMEs on pre-approved digital solutions, within a S$30,000 yearly sub-cap; apply before you commit to buying
AI on the pre-approved list	IMDA aims to raise AI-enabled pre-approved solutions from 30% to 50% of the list
EIS AI deduction	400% on up to S$50,000 of qualifying AI expenditure per year, for YA 2027 and 2028; no cash payout option
EIS, other activities	400% on up to S$400,000 a year for each of four activities; optional 20% cash payout on up to S$100,000
National AI Impact Programme	Support for 10,000 enterprises over three years
For business owners	IMDA’s Digital Leaders Accelerator Bootcamp
Whole-business change	The Champions of AI programme

The WahLiao Verdict

Start with	A pre-approved AI solution under the EDGE Grant; it’s the quickest route.
The tax angle	Keep good records: for a calendar-year company, AI spending in 2026 falls into YA 2027.
The catch	Apply first, buy second; you can’t claim a grant after the fact.
Ask vendors	“Is this solution on IMDA’s pre-approved list?”
Don’t forget	Train your people, not just buy the tool.

From the Productivity Solutions Grant to the EDGE Grant

PSG, which paid up to 50% of qualifying costs from 1 April 2023, closed to new applications on 29 September 2026. From 30 September 2026, Enterprise Singapore folded it, together with two other schemes, into the new EDGE Grant. Applications sent in before 30 September will still be assessed under the old rules, so if you applied in time, you don’t need to start again.

Here’s what Enterprise Singapore’s EDGE Grant FAQ says about buying digital tools. Pre-approved single-function digital solutions and integrated enterprise systems get up to 50% support for SMEs and up to 30% for larger firms. Each company has an overall grant cap of S$100,000 a year, refreshed every 1 April, and up to S$30,000 of that can go to digital solutions, integrated systems and selected automation. You may see “up to 70% for SMEs and up to 50% for non-SMEs” on the main EDGE Grant page; as far as we can tell from the FAQ, those higher rates are for activities such as internationalisation and sustainability, not for adopting digital or AI solutions. You apply on the Business Grants Portal, using Corppass, and you must not have started work or paid anything, not even a deposit, before you apply. To qualify, your business must be registered in Singapore with at least 30% local shareholding; to count as an SME, group sales must be no more than S$100 million or group employment no more than 200 workers. Terms can change, so check the portal for the current details before you sign anything.

The Budget 2026 statement gave a nice small-business example: HarriAnns, the nonya kueh business that began in the 1940s and now runs eight cafes, used PSG support (the PSG has since been folded into the EDGE Grant) to adopt an AI-enabled restaurant management system that automates ordering and billing. The Government is widening grant support to cover more AI-enabled solutions, and IMDA plans to raise their share of its pre-approved list from 30% to 50%.

The Enterprise Innovation Scheme’s AI route

The EIS runs from YA 2024 to YA 2028 and gives 400% tax deductions or allowances on qualifying spending. Budget 2026 added a new qualifying activity for AI: for YA 2027 and YA 2028, businesses can claim 400% on up to S$50,000 of qualifying AI expenditure each year. Unlike the scheme’s other activities, this one can’t be converted into a cash payout. The existing activities carry on as before, with 400% on up to S$400,000 a year for each of four activities, and an option to convert up to S$100,000 of total qualifying spending into a cash payout at 20%.

A Year of Assessment taxes the previous financial year’s income, so a company with a calendar financial year claims 2026 spending in YA 2027. IRAS sets out what counts as qualifying AI expenditure on its EIS page, so do read it before you commit, and remember that you can’t claim the part of a cost already covered by a grant. Budget 2026 also added the Sectoral AI Centre of Excellence for Manufacturing to the list of partners for innovation projects.

The National AI Impact Programme

Launched at the Committee of Supply debates in March 2026, the programme aims to help 10,000 enterprises bring AI into their business processes over three years. For business owners, IMDA is adding a Digital Leaders Accelerator Bootcamp to its Digital Leaders Programme, with hands-on AI project work alongside industry partners. For staff, it’s expanding the TechSkills Accelerator (TeSA) to build AI skills in the workforce, starting with accountancy and legal professionals. Firms ready to use AI to transform their whole business can look to the separate Champions of AI programme.

Training your people

Tools only pay off when people use them well. Staff who are Singapore Citizens aged 18 and above can get six months of a premium tool free after an eligible course; see SkillsFuture’s free AI subscription. Training is also one of the EIS’s qualifying activities. And before anyone pastes customer data into a new tool, agree the house rules first; your data and Super Intelligence explains why.

A sensible first project

Pick one repetitive job you can measure: chasing invoices, answering routine customer questions, scheduling, or turning meeting notes into actions. Look for a pre-approved solution for it, apply for the grant before you sign, and count the hours saved in the first three months. If it works, the second project is much easier to justify, and the EIS AI deduction can help with the next round of spending.

AI grants for SMEs: FAQ

Can the EDGE Grant pay for AI software?

Yes, if the solution is on the pre-approved list. The EDGE Grant, which replaced PSG on 30 September 2026, covers up to 50% of qualifying costs for SMEs, and IMDA is increasing the share of AI-enabled solutions on the list.

How much is the EIS AI tax deduction?

400% on up to S$50,000 of qualifying AI expenditure per year, for YA 2027 and YA 2028.

Can I convert the EIS AI deduction into cash?

No. The cash payout option doesn’t apply to the new AI activity, though it’s still available for the scheme’s other activities.

Do I apply for the grant before or after buying?

Before. Submit your application on the Business Grants Portal before you commit to the purchase or pay any deposit.

What is the National AI Impact Programme?

A programme launched in 2026 to help 10,000 enterprises adopt AI over three years, with training for business owners and staff.