Detailed Introduction to Land Intensification Allowance (LIA) (Singapore Incentive Policy)

The Land Intensification Allowance (LIA) is an incentive measure launched by the Singapore Economic Development Board (EDB), aimed at promoting enterprises to optimize the use of industrial land, improve land utilization efficiency, and promote the development of high value-added activities. Through the LIA scheme, eligible enterprises can enjoy tax deductions for industrial facility development and improvement projects, encouraging enterprises to enhance land intensive utilization and improve productivity and economic benefits.

1. Background and Objectives of the LIA Scheme

Singapore has limited land resources. To effectively utilize limited industrial land, the government launched the LIA scheme to encourage enterprises to improve land utilization efficiency by increasing industrial building density, optimizing facility layouts, and conducting high value-added industrial activities. This scheme helps drive enterprises to achieve higher output density, reduce the need for additional land, while enhancing economic benefits and industrial competitiveness.

2. Content of Incentive Policy

Tax Incentives:
Eligible enterprises can obtain tax deductions for capital expenditure on industrial land development and facility improvements through the LIA scheme. Specific content includes:

Initial Allowance: Enterprises can enjoy an initial allowance of 25% of the development project cost.
Annual Allowance: After project completion, enterprises can also enjoy an additional allowance of up to 5% per year for 13 years, with total allowances reaching up to 100% of eligible project expenditure.
Applicable to Capital Expenditure: Including construction, expansion and renovation costs of industrial buildings, covering various facility investments for land intensification.

Policy Scope:
The LIA scheme applies to land-intensive industries, particularly enterprises requiring large amounts of industrial land. Projects can be development of new facilities, upgrading or reconstruction of existing buildings, provided they meet land density requirements and conduct high value-added industrial activities.

3. Applicable Industries and Enterprise Types

The LIA scheme mainly targets the following industries and enterprise types:

Manufacturing: Such as chemicals, electronics, precision engineering, semiconductor manufacturing and other industries requiring large land areas for production activities.
Logistics and Warehousing: Including logistics centers, cold chain facilities and other enterprises requiring substantial storage space.
Food and Beverage Processing: Food manufacturers and distributors requiring large industrial land for production and storage.
Data Centers: Data center operators needing to optimize land use to support data storage and server concentration.

4. Application Requirements

Enterprises applying for the LIA scheme must meet the following conditions:

Meet Land Density Requirements: Projects must achieve government-specified land utilization density standards, i.e., the building's Gross Plot Ratio (GPR) must meet certain requirements.
Conduct High Value-Added Activities: Enterprises need to conduct value-added production or service activities, such as high-tech manufacturing, advanced logistics and data management.
Capital Expenditure Meets Policy Requirements: Including land development, building renovation and other costs directly related to land intensive utilization.
Submit Detailed Land Development Plan explaining how the project improves land utilization efficiency and generates higher economic benefits.

5. Advantages of LIA and Enterprise Benefits

Through the LIA scheme, enterprises can enjoy the following benefits:

Reduce Tax Burden: Through tax deductions, enterprises can reduce costs associated with land development, enhancing financial flexibility.
Improve Land Utilization Efficiency: By optimizing facility layouts and intensive land use, enterprises can achieve higher output density and higher economic value-added.
Promote Sustainable Development: More efficient land use helps reduce the need for additional land, supporting Singapore's sustainable development goals.

6. Role of LIA in Promoting Singapore's Industrial Upgrading

The LIA scheme not only helps enterprises reduce land development costs but also plays a key role in promoting Singapore's industrial upgrading and economic transformation:

Enhance Industrial Intensification Level: By encouraging enterprises to increase building density and optimize facility layouts, LIA promotes intensive development of land-intensive industries.
Support Growth of High Value-Added Industries: By providing allowances for projects meeting high value-added standards, LIA encourages enterprises to conduct high-tech, high-output industrial activities, promoting Singapore's economic upgrading.
Optimize Resource Allocation: LIA helps guide enterprises to more rationally utilize limited land resources, improving overall economic benefits of land.

7. Application Process

The steps for enterprises to apply for LIA allowance include:

Submit Preliminary Application: Enterprises submit preliminary project plans to the Singapore Economic Development Board (EDB), outlining specific measures for land intensification and expected benefits.
Prepare Detailed Development Plan: Including specific plans for land development and building renovation, proof of meeting land density requirements, and detailed explanation of high value-added activities.
EDB Review and Assessment: The Singapore Economic Development Board will assess the application, reviewing the project's feasibility and compliance.
Implement Project After Approval: Once approved, enterprises will proceed with development according to plan and submit regular progress reports to obtain annual allowances.

Land Intensification Allowance (LIA) is an important policy tool for Singapore to support efficient utilization of industrial land and promote the development of high value-added industries. By providing tax incentives for eligible enterprises, LIA incentivizes enterprises to invest in optimization and expansion projects for land-intensive industries. This scheme not only reduces land development costs but also enhances the level of intensification and economic value-added of industrial facilities, helping Singapore better achieve sustainable utilization of land resources and high-quality economic growth. Enterprises can utilize the LIA policy to improve facility output density, helping them maintain a leading position in the competitive market.