EVEN as small and medium-sized enterprises (SMEs) grapple with rising business costs, they must continue to position themselves for long-term growth by expanding overseas and investing in upskilling, said Koh Kar Siong, DBS’ managing director and group head for corporate and SME banking.

The Covid-19 pandemic previously pushed many enterprises to strengthen their foundations, especially in digitally transforming their operations, he told The Business Times in an interview ahead of Budget 2025.

But SMEs are facing a new set of pressing challenges today, he pointed out, adding that the business environment has become increasingly uncertain amid global leadership changes and geopolitical tensions.

More businesses are also struggling to manage the rising costs of goods due to supply chain disruptions, and will have to either absorb these costs or pass them on to their customers.

SMEs must therefore re-evaluate their business models to ensure they remain resilient and relevant for the future, said Koh.

“Businesses can ask themselves: ‘Is there anything else we can do to make ourselves stronger and better, so as to tackle any other changes, disruptions and uncertainties that come along?’”

Managing costs, going global, upskilling

This current state of play has informed Koh’s personal wish list for Budget 2025; he hopes to see the government help SMEs to address immediate challenges and to position them for “long-term strategic play”.

First on his wish list is an extension of the corporate income tax rebate introduced in Budget 2024, as well as a higher cap. This will provide SMEs some short-term relief in battling rising costs, he noted.

Last year, companies were granted a rebate of 50 per cent of tax payable – capped at S$40,000 – for the year of assessment 2024, under the S$1.3 billion Enterprise Support Package rolled out for businesses.

Second, he is suggesting that more funding be handed out to support enterprises’ internationalisation efforts.

This includes increasing the quantum of the Market Readiness Grant (MRA), which helps SMEs to defray up to half of their eligible costs. The grant is currently capped at S$100,000 a company, for business activities related to overseas market promotion, business development and set-up.

Koh urged SMEs to set their sights abroad, given the limited size of Singapore’s domestic market.

He noted that regional markets such as Indonesia, Vietnam and India hold plenty of opportunities for SMEs to capture, particularly in the logistics, technology and renewable-energy sectors.

The upcoming Johor-Singapore Special Economic Zone will also pave the way for Singapore and Malaysia to capitalise on their complementary strengths and create cross-border business opportunities for their home-grown enterprises, he said.

For one, Singapore SMEs can tap Johor’s abundant land resources, raw materials and lower operating costs, while contributing skilled talent and know-how to the market. He added that Budget 2025 could also give a broad indication of possible tax incentives SMEs can expect for the zone.

Third, human capital development must go hand-in-hand with the reinvention of business models, said Koh.

“To reinvent your business model, you need to ensure that your workforce is ready for the change,” he said. “You will need the right people to help you carry through with the transformation.”

He noted that many SMEs continue to be bogged down by short-term cost challenges and are caught between tending to present survival and planning for the future.

Some business owners are concerned about productivity dropping in the short-term if they send employees for training, he said. And after these workers have upgraded their skills, the bosses worry about them being poached by their competitors.

“There’s always this fear, but you need to start somewhere,” he said. “For a company that has achieved sustainable growth and a strong culture, there’s no reason why staff would leave; instead, they will want to stay on and grow with you.”

He calls for a mindset shift: SMEs need to see upskilling and reskilling as long-term investments to help their workers to stay relevant, especially amid technological disruptions such as generative artificial intelligence (AI).

On that note, he hopes Budget 2025 will extend the validity of the SkillsFuture Enterprise Credit (SFEC) and Senior Employment Credit (SEC) beyond 2025. These schemes are set to expire by end-June and end-December, respectively.

Under the SFEC scheme, eligible employers receive a one-off S$10,000 credit to cover up to 90 per cent of out-of-pocket expenses on enterprise or workforce transformation initiatives.

The SEC provides wage offsets to employers who hire and retain Singaporean employees aged 60 and above and who earn up to S$4,000 a month.

Private sector needs to play a role

Koh acknowledged that the government cannot be expected to shoulder all the responsibility of supporting SMEs; the private sector also has a role to play in helping SMEs make sense of the available government grants and existing initiatives out there, he said.

Unlike large corporations, SMEs need more hand-holding and “a nudge” to get moving. Many lack the resources to navigate the landscape of grants and schemes on their own, as they run manpower-lean operations and are tied up with managing day-to-day operations.

Fostering more public-private partnerships can help in this area, said Koh. For instance, SMEs can stand to benefit from structured and hands-on programmes, especially in emerging areas such as sustainability and AI.

Last year, DBS partnered Enterprise Singapore (EnterpriseSG) to launch the ESG Ready Programme, which offers practical guidance and tools to help companies build sustainability into their business models.

Response so far has been encouraging, noted Koh. Over 250 SMEs from a range of sectors – including construction, manufacturing and wholesale and retail – have registered for the ESG Ready programme since its launch in April 2024.

More recently, the bank worked with EnterpriseSG and the Infocomm Media Development Authority to roll out the Spark GenAI programme in November 2024.

The programme aims to foster AI adoption among SMEs by teaching them potential use cases of GenAI, and how to incorporate such solutions into their business operations. It will also facilitate access to government grant support in adopting these solutions.

Said Koh: “More can be done to encourage other large private-sector players to step up to support SMEs. We have a role to play, and we hope that we can contribute to the ecosystem.”

Source: The Business Times (Link HERE)

In a landmark move to strengthen economic ties, Singapore and Malaysia have agreed to drive investments in 11 key sectors such as manufacturing, logistics and energy, and made plans to expand 50 projects in five years, and 100 projects within 10 years.

The establishment of the new Johor-Singapore Special Economic Zone (JS-SEZ) will also, among other things, create 20,000 skilled jobs and strengthen cross-border cooperation with the establishment of a one-stop centre to facilitate investments and businesses in the zone.

To streamline the movement of people and goods, Singapore and Malaysia will increase clearance capacity, introduce automated immigration lanes and implement paperless goods clearance in phases.

The agreement for the JS-SEZ was inked on Monday (Jan 6) by Singapore’s Trade and Industry Minister Gan Kim Yong and Malaysia’s Economy Minister Rafizi Ramli.

The exchange of the SEZ document took place during the 11th Malaysia-Singapore Leaders’ Retreat on Tuesday in Putrajaya, and was witnessed by Singapore’s Prime Minister Lawrence Wong and Malaysian Prime Minister Anwar Ibrahim.

PM Wong said at a press conference: “We both agree that bilateral cooperation must continue to deliver concrete benefits to both our peoples, and that is the basis on which we worked on the Johor-Singapore SEZ.”

He added: “It is an important project which will build on the complementary strengths of Singapore and Johor, so that we can both be more competitive, enhance our value proposition, and jointly attract more investments to our shores. And by doing so, it will create good jobs and more opportunities for our peoples.”

PM Wong said that when the agreement was negotiated, both sides actively engaged stakeholders to ensure that the SEZ would have the conditions to help businesses grow together for the longer term.

PM Anwar described the SEZ as a “unique initiative” as it was rare to see two countries collaborating as a team to promote mutual economic growth and attract investments.

“This initiative not only brings clarity to economic policies, but also ensures a well-structured approach to social investment concerns. Both governments are being selective to ensure that investments align with future needs and priorities,” he said.

Competing for investments together

The SEZ agreement aims to strengthen the value proposition of Johor and Singapore so that both sides can compete for global investments together, said Singapore’s Ministry of Trade and Industry (MTI) in a statement on Tuesday. 

This will be done through improving cross-border goods connectivity between both jurisdictions, enabling freer movement of people, supporting talent development, and strengthening the business ecosystem within the region.

The SEZ covers an area of more than 3,500 square kilometres, roughly four times the size of Singapore.

It comprises nine flagship zones: Johor Bahru; Iskandar Puteri; Tanjung Pelepas and Tanjung Bin; Pasir Gudang; Senai-Skudai; Sedenak; Forest City; Pengerang Integrated Petroleum Complex (PIPC); and Desaru.

These nine regions will enjoy tax incentives under the agreement.

The first six zones are already part of the Iskandar Malaysia SEZ; the JS-SEZ thus expands upon this by including Forest City, PIPC and Desaru. The two governments will jointly finance the JS-SEZ. Malaysia’s Ministry of Economy will establish a JS-SEZ Infrastructure Fund to build facilities as needed.

Economic collaboration

Both countries have agreed to cooperate on initiatives in several areas.

In the area of economic cooperation, Singapore and Malaysia have agreed to promote and facilitate investments in 11 economic sectors: manufacturing, logistics, food security, tourism, energy, the digital economy, green economy, financial services, business services, education and health.

Both sides have agreed to promote and facilitate the expansion of 50 projects within the first five years, and 100 projects within the first decade.

Singapore and Malaysia will facilitate the development of renewable-energy projects to accelerate renewable-energy trading between the two countries. They will also consider developing new areas that can become free zones.

On its part, Malaysia will establish the Invest Malaysia Facilitation Centre-Johor – a one-stop centre to facilitate investments and businesses in the zone.

Both sides also agreed to boost local transport links, explore using the Second Link for more commercial vehicles, and consider data-sharing to improve customs clearance.

Other initiatives

Malaysia will enhance its existing foreign-worker passes, such as the DE Rantau Nomad Pass, which gives non-IT and non-digital foreign talent earning a minimum monthly income of US$5,000 clearance to live in Malaysia for up to 12 months in the first instance.

The minimum income requirement for non-IT and non-digital talents is set at US$60,000 a year.

On talent development, both countries will enhance industry-ready skills-training initiatives and education programmes.

Separately, both countries will work towards refreshing the Joint Ministerial Committee for Iskandar Malaysia to support the ambition and implementation of the JS-SEZ. 

This refreshed committee will reinforce bilateral cooperation on other fronts, such as transport and the environment, said Singapore’s MTI and Malaysia’s Ministry of Economy in a joint statement.

These new initiatives build on others that were launched in the lead-up to the formalised agreement. For instance, passport-free QR code clearance has been in force at Singapore’s land checkpoints with Malaysia since last March.

Customs procedures for land intermodal transhipments have also been streamlined so that traders need only apply for a single permit with Singapore Customs, instead of two separate permits. 

Malaysia and Singapore will continue to explore new areas of cooperation in support of the objectives of the JS-SEZ, they said in the joint statement.

This includes exploring enhanced market access of financial institutions, subject to the laws and regulations in both countries. 

Malaysia will provide a tax incentive package for the JS-SEZ, including granting a special corporate tax rate to companies that undertake new investments in high-growth and high value-added activities within the zone.

The SEZ was officially announced in October 2023, during PM Anwar’s visit to Singapore for the previous retreat. Both countries then signed a memorandum of understanding last January to finalise an agreement to set up the zone by the end of 2024.

The agreement was set to be signed in December, but had to be postponed after PM Wong tested positive for Covid-19.

Source: The Business Times (Link here)

AMID continued geopolitical tensions, macroeconomic uncertainty and market volatility, businesses are looking to future-proof themselves to stay competitive in a rapidly changing landscape.

Against this backdrop, many companies are looking to boost their resilience by leveraging technology and capturing emerging growth opportunities.

For small and medium-sized enterprises (SMEs), this means making bold moves – such as adopting new digital solutions, expanding overseas, or integrating sustainability into their operations.

But change does not come easy, and many business owners still grapple with rising costs, regulatory uncertainty and fierce competition. That is why having the right support and resources is more important than ever.

With this year’s Budget coming up on Feb 18, the latest DBS Business Pulse Check Survey highlights what local enterprises are prioritising, what challenges they face and, most importantly, what they need to succeed.

Betting big on digital

Digital transformation is evolving. The rise of generative artificial intelligence (GenAI) is ushering in a new era – one where businesses move beyond basic digital adoption to intelligence-driven decision-making.

Based on DBS’ survey, three in four SMEs have already embraced digital banking solutions and are now exploring next-generation technologies such as digital analytics and GenAI to sharpen insights, enhance customer engagement, and drive efficiency.

This shift aligns with the Infocomm Media Development Authority’s (IMDA) Digital Enterprise Blueprint, which underscores the need for SMEs to integrate advanced technologies – not just to streamline operations, but to unlock new efficiencies, scale at speed, and stay ahead in an increasingly competitive digital economy.

That said, digitalisation is not always straightforward. The cost of new tools, the overwhelming array of options, and a lack of in-house expertise often complicate the journey.

While grants and subsidies have helped businesses take the first step, more and more SMEs are seeking expert guidance to navigate the complexity and identify the right solutions for their needs.

Whether it’s to automate processes, personalise marketing with AI, or simply run more efficient operations, digital tools are proving to be essential for long-term business success.

The business case for going green

Sustainability is no longer just a nice-to-have – it’s becoming a business necessity. With growing pressure from customers, investors and regulators to cut emissions and report on their progress, companies are being pushed to take actions. Yet, many are still in the early stages of their green transition.

Survey results show that about 60 per cent of businesses have either not started or are only just beginning to prepare for sustainability regulations. The biggest hurdles are high costs, complex regulations and a lack of resources.

While many SMEs recognise the importance of sustainability, translating ambition into action remains a challenge. Business owners say they need clearer guidance, industry-specific road maps and financial support – such as government grants and subsidies – to ease the transition.

The message is clear: Going green is not just about compliance. It’s about staying relevant, competitive and unlocking new growth opportunities.

Growing beyond borders

Rising geopolitical tensions – including the threat of a trade war following US tariffs on Mexico, Canada and China – are prompting businesses to rethink their supply chains. To mitigate risks arising from disruptions and shifting trade policies, companies are increasingly seeking alternative manufacturing and sourcing hubs.

With South-east Asia poised to benefit from this supply chain diversification, local businesses are setting their sights abroad to seize new growth and investment opportunities.

The survey found that more than 60 per cent of SMEs plan to expand beyond Singapore’s shores in 2025, eyeing South-east Asia and other high-growth regions as key markets.

Many are already exploring opportunities within the recently announced Johor-Singapore Special Economic Zone (JS-SEZ), which is expected to create fresh cross-border business prospects for SMEs.

Among its key benefits, the JS-SEZ will offer companies incentivised corporate tax rates for qualifying activities and more flexible foreign worker policies, facilitating labour mobility between Singapore and Malaysia.

However, expanding internationally involves more than just setting up shop in a new country.

Businesses cite regulatory complexity, uncertain market demand, and a lack of local presence as their biggest challenges. To ease their market entry and succeed, SMEs need better access to market intelligence, trade laws and strong local networks.

Despite these hurdles, SMEs are increasingly viewing internationalisation as a key driver of long-term growth, enabling access to new revenue streams and larger customer bases.

The Singapore Business Federation’s National Business Survey 2024 found that 59 per cent of companies already operating overseas expected an increase in international sales within the next 12 months, reinforcing the tangible benefits of expansion.

For SMEs that successfully navigate cross-border challenges, global markets offer greater revenue potential, diversified risk, and long-term business resilience.

Staying ahead in an uncertain world

In a business environment that is becoming more and more complex, companies looking to future-proof their operations cannot go at it alone. Strong partnerships and targeted support will be key to helping businesses navigate digital transformation, sustainability goals and overseas expansion.

Recognising these challenges, DBS has developed a suite of programmes to provide companies with the expertise, tools and connections they need.

Koh Kar Siong, group head of corporate and SME banking at DBS, said that SMEs in Singapore are taking bold steps to future-proof their businesses, whether by investing in GenAI to boost productivity or expanding into high-growth markets to capture new opportunities.

He added: “Their adaptability and commitment to transformation are essential for staying competitive in an increasingly uncertain landscape. At DBS, we are dedicated to fostering this entrepreneurial spirit by providing financial advisory, market intelligence and strategic connections to help our clients achieve sustainable growth and long-term success.”

To support SMEs in their transformation journey, DBS has introduced several key initiatives:

• The Spark GenAI Programme: Developed in collaboration with Enterprise Singapore and IMDA, this initiative helps SMEs adopt AI-driven solutions to enhance productivity and drive innovation.

• The ESG Ready Programme: Designed for businesses working towards sustainability goals, this programme provides expert guidance and financial support to help SMEs build stronger sustainability capabilities.

• The Bridging Business Horizons Programme: For companies looking to expand beyond Singapore, this initiative offers market insights, regulatory guidance and networking opportunities to help them break into regional markets and seize opportunities.

By partnering DBS, businesses can tap on expertise, industry connections and tailored solutions to strengthen resilience and drive growth in an increasingly volatile landscape.

This article was contributed by DBS Bank

 Source: The Business Times (Link HERE)

Cambodia is leaping its track in transition to clean energy, with solar farms set to double their electricity this year to the national grid.

A report from the Electricity Authority of Cambodia (EAC) showed that solar farms are set to generate approximately 720MW of electricity this year to the grid, an increase from 827MW generated in 2024.

The government is boosting building new energy plant projects to generate clean energy for the grid, said Keo Rattanak, Minister of Mines and Energy.

The projects will increase Cambodia’s share of clean energy generation capacity to 70 percent by 2030 from more than 62 percent at present, Rattanak said.

“Comparing Cambodia with other countries in the region, excluding Laos, if we can produce 70 percent by 2030, Cambodia will be ranked second among the 10 ASEAN countries with the highest clean energy, and this clean energy will provide many benefits in other areas,” he said in an annual meeting held last week.

The expansion of solar power is in line with the Cambodian Government’s policy to achieve zero carbon emissions by 2050.

Since 2019, the government has ceased issuing licenses to new coal-fired power plant projects.

The main sources of renewable energy are hydropower, solar energy and biomass energy. The country also buys electricity from neighbouring countries, especially during the dry season.

For full article, please read here


Source: Khmer Times

The Council for the Development of Cambodia (CDC) is in the process of improving the ease of doing business in Cambodia aimed at attracting foreign investment as companies are likely to switch locations amid trade war pressure, said Sun Chanthol, Deputy Prime Minister and First Vice Chairman of the Council for the Development of Cambodia, yesterday.

CDC is reviewing the existing regulations and procedures to identify points for reform with the target of eliminating complexity in doing business and creating a more transparent investment environment, said Chanthol.

“To attract investment in the context of likely-to-happen trade war pressures, CDC is reviewing to do more reforms, to identify the issues, and create more incentives to investors,” he said.

The meeting brought together representatives from provinces to discuss improving the ease of doing business and investment application registration.

“CDC is committed to creating a friendly investment environment for all national and foreign investors by improving and giving competitive incentives, simplifying business registration processes,” he said.

Last year, Cambodia attracted 414 fixed-asset investments worth a total investment capital of $6.9 billion, up 40 percent from $4.92 in the year before.

For full article, please read here

Source: Khmer Times

The Thai government has announced a bold vision for 2025, aiming for economic expansion and increased foreign investment. By focusing on sectors like Future Industries, AI Data Centers, Electric Vehicles, Precision Agriculture, and Food Technology, public investments are projected to exceed 700 billion baht.

The Thai government has set an ambitious 2025 agenda to drive economic growth and attract significant foreign investment, focusing on five sectors: future industries, AI data centers, electric vehicles, precision agriculture, and food technology. Public investments in these sectors are expected to exceed 700 billion baht.

Key projects include two hyperscale AI data centers and a semiconductor supply chain investment, aiming to enhance capabilities in AI, 5G, IoT, and semiconductor manufacturing. These initiatives will create job opportunities and raise investment thresholds for large-scale projects, encouraging economic activity and securing long-term benefits.

Tourism remains crucial in Thailand’s recovery plan, with campaigns like “Charming Thailand” promoting unique experiences. The Tourism Authority targets a 7.5% revenue increase by engaging in 23 global markets and celebrating Thai-Chinese relations. Efforts also emphasize sustainability, solidifying Thailand’s responsible tourism leadership.

Read more: Click! 

Port Authority of Thailand to diversify operations beyond traditional cargo services, establish new subsidiaries.

The Port Authority of Thailand (PAT) has revealed sweeping plans to transform Bangkok's Klongtoey Port into a sophisticated smart hub spanning 2,353 rai (about 375 hectares), encompassing smart city, smart port, and smart community developments.

Central to the transformation is the Bangkok Logistics Park, projected to reduce national logistics costs by 1.41 billion baht. The development will feature advanced traffic management systems, including dedicated truck parking facilities and a "Truck Q" technological solution to ease port congestion.

The comprehensive master plan is expected to be finalised within six months, marking a significant step in Thailand's ambition to establish itself as a regional logistics hub.

Read more: Click! 

Brunei Darussalam has achieved a notable milestone, ranking 13th out of 136 countries globally in the Islamic Finance Development Report 2024: From Niche to Norm, marking its return to the top 15 rankings, according to the Brunei Darussalam Central Bank (BDCB).

The report, based on 2023 data, highlights Brunei’s strong position in the Islamic finance industry, with an Islamic Finance Development Indicator (IFDI) score of 29 points.

The global average IFDI score also saw a rise, increasing from 9 points in 2023 to 12 in 2024, reflecting a positive trend in the development of the Islamic finance industry.

The IFDI measures the development of the Islamic finance industry across five key indicators: Financial Performance, Governance, Sustainability, Knowledge, and Awareness.

Malaysia and Saudi Arabia maintained their positions as the top two Islamic finance markets in 2023, while the United Arab Emirates secured third place, overtaking Indonesia.

Total global Islamic finance assets grew by 11 per cent, reaching USD4.9 trillion in 2023.

Sector growth in Islamic finance

The report highlighted strong performances across several key sectors: Islamic banking experienced a 12 per cent growth, reaching USD3.6 trillion in assets, with Afghanistan, Iraq, and Bahrain leading in growth rates.

The sukuk market increased by 9 per cent, driven by higher sovereign issuances, new market offerings, and a rise in green and sustainability sukuk issuances, bringing the total outstanding amount to USD863 billion.

The takaful sector achieved modest growth, reaching USD86 billion despite facing competition from conventional insurance options and monetary tightening pressures.

Islamic banking dominated the global Islamic finance asset distribution in 2023, holding a 73 per cent share, followed by sukuk (18 per cent), Islamic funds (5 per cent), other Islamic financial institutions (3 per cent), and takaful (2 per cent).