Singapore SMEs looking for government support usually start with the familiar list: the Enterprise Financing Scheme, the SkillsFuture Enterprise Credit, tax incentives. Few think to look at a scheme that is not funded directly to them at all, but is funded to the multinational corporation or large local enterprise they want to work with. The Partnerships for Capability Transformation (PACT) scheme, jointly supported by the Singapore Economic Development Board (EDB) and Enterprise Singapore, works from the other end of the relationship: it pays part of a larger company’s cost of partnering with, training, and building capability in a smaller Singapore enterprise.
For an SME, this matters because it changes who has the incentive to invest in the relationship. Instead of an SME applying for a grant and then trying to persuade an MNC to take it seriously as a supplier or partner, PACT gives the MNC itself a funded reason to invest in developing that local partner’s capability, supply reliability, or co-innovation output.
This guide explains how PACT works, the five partnership modalities it now covers following its 2024 enhancement, who is eligible, how funding is structured, and how an SME should position itself to become the local partner an MNC brings into a PACT application. The scheme is jointly profiled on the EDB website and administered alongside Enterprise Singapore’s broader suite of enterprise support programmes.
What PACT Actually Funds
PACT defrays part of the costs incurred by MNCs and large local enterprises, and their local suppliers or partners, in undertaking structured partnership activities. Supportable cost components include manpower, software, hardware and equipment, and professional services incurred in connection with the partnership.
Since its enhancement, PACT covers five partnership modalities:
- Supplier Development: building a network of qualified local suppliers that can meet a larger company’s technical and operational standards, reducing supply chain risk and shortening lead times.
- Co-innovation: jointly developing new products, technologies or solutions with a local enterprise, sharing development costs, expertise and risk.
- Capability Training: equipping local partners with specialised knowledge and technical capabilities to support the larger company’s operations and supply chain resilience.
- Internationalisation: using Singapore as a base to scale locally developed solutions across the region, leveraging a local partner’s regional expertise and networks.
- Corporate Venturing: partnering with Singapore startups and deep-tech enterprises on venture building, startup investment and pilot partnerships.
This is a materially broader scope than PACT’s original supplier-development focus, and reflects a deliberate policy shift towards treating MNC-SME collaboration as a route to both supply chain resilience and genuine innovation, not just vendor qualification.
Who Is Eligible
PACT is a partnership scheme, so eligibility runs on both sides of the relationship. SMEs, defined for this purpose as enterprises with operating receipts of not more than S$100 million or employment of not more than 200 workers, are eligible local partners. MNCs and large local enterprises are the applicant party that typically initiates and administers the PACT application, since the funding defrays their costs of running the partnership programme.
In practice, this means an SME does not usually submit a PACT application on its own behalf. Instead, the SME needs to be identified and brought in as the qualifying local partner by an MNC or large enterprise that is itself applying for PACT support. This is the single most important operational fact about the scheme, and it changes how an SME should approach it: the goal is not to file an application, but to become visible and credible to potential MNC partners in the first place. Enterprise Singapore’s broader capability-boosting programmes are a useful reference point for SMEs building the track record that makes them an attractive PACT partner.
Funding Rates
Funding rates differ by company size and cost category:
| Applicant | Software, materials, professional services, hardware and equipment | Manpower costs |
|---|---|---|
| Non-SMEs (typically the MNC or large enterprise applicant) | Up to 50% | Up to 70% |
| SMEs | Up to 50% (hardware); up to 70% (software, materials, professional services) | Up to 70% |
Because the MNC or large enterprise is usually the party that applies and administers the grant, the SME’s practical benefit typically comes through subsidised joint training, co-development resources, and professional services that the larger partner would otherwise have had to fully self-fund, rather than through a direct cash grant landing in the SME’s own accounts. SMEs negotiating a PACT-supported partnership should have their commercial and services agreements reviewed carefully to make sure the cost-sharing and IP arrangements reflect this funding structure. Our guide on how to stack Singapore government grants covers how PACT-funded activity can sit alongside other SME-facing schemes.
How SMEs Get Discovered as PACT Partners
Since the SME is not usually the applicant, the practical challenge is visibility. Several structured channels exist for this:
- The MNC-LE Alliance, launched by the Singapore Manufacturing Federation with EDB and Enterprise Singapore support, connects MNCs with high-potential local firms. MNCs define specific technology gaps or supply chain needs, and the Alliance actively matches these against suitable local SMEs, then supports the parties in adopting a collaboration model, whether supplier development, technology transfer, or joint innovation.
- Trade Associations and Chambers (TACs) across specific industries, including the Singapore Manufacturing Federation, the Singapore Semiconductor Industry Association, the Association of Aerospace Industries Singapore, the Singapore Precision Engineering and Technology Association, and the Singapore Chemical Industry Council, run sector-specific matchmaking that reduces an SME’s partner-search cost.
- Direct approach to EDB or Enterprise Singapore, particularly where an SME already has an informal relationship with an MNC and wants to explore whether that relationship could be formalised and funded under PACT.
SMEs serious about being considered should be able to articulate clearly what specific technical, operational or innovation capability they bring, since MNC partners are looking for firms that can meet a defined problem statement, not general-purpose vendors.
What This Looks Like in Practice
Publicly documented PACT-supported partnerships illustrate the range of what qualifies. A global automation company partnered with a Singapore-based medical technology firm to combine motion-tracking and AI capabilities with automation expertise for a stroke recovery therapy system, an example of co-innovation. A global laboratory analytics company partnered with a local precision engineering firm to build a more resilient, less import-dependent manufacturing model, an example of supplier development. A global logistics company partnered with a local automation specialist over several years to co-develop AI-enabled warehouse robotics, illustrating how a PACT-supported relationship can compound well beyond the initial funded project.
The common thread is that each SME brought a specific, demonstrable technical capability to the table; none of these were generic vendor relationships that happened to receive a subsidy.
PACT Compared to Other Partnership and Grant Routes
| Scheme | Who applies | What it solves |
|---|---|---|
| PACT | MNC or large local enterprise, with an identified SME partner | Funds the cost of a structured MNC-SME partnership across five modalities |
| Capability Transfer Programme (CTP) | The company needing the capability | Funds bringing a foreign specialist’s capability into a company’s own workforce |
| Market Readiness Assistance / Enterprise grants generally | The SME itself | Funds an SME’s own market entry, productivity or transformation activity |
Companies weighing whether to pursue CTP, PACT, or a more conventional SME grant should treat these as complementary rather than competing: an SME that becomes a PACT partner may separately need its own capability-building support, which is where a company-initiated scheme such as the Career Conversion Programme or the SkillsFuture Enterprise Credit becomes relevant.
Common Pitfalls
- Waiting for an MNC to approach you. Registering interest with the relevant Trade Association or Chamber, or engaging with the MNC-LE Alliance directly, is usually more productive than waiting passively.
- Underselling your specific capability. PACT partnerships are built around solving a named problem statement; generic “we can supply anything” positioning does not match how MNCs scope these partnerships.
- Ignoring the commercial and IP terms. Because the MNC typically administers the funding, the SME should still negotiate its own commercial agreement, IP ownership and exit terms independently of the grant mechanics.
- Assuming PACT replaces the need for your own grants. PACT funds the partnership activity, not the SME’s broader growth plan; most SME partners still separately pursue their own productivity, training or internationalisation support.
Conclusion
PACT is unusual among Singapore’s business support schemes because the SME benefits without being the applicant. That structure rewards SMEs that make themselves easy for a larger partner to find, evaluate and commit to, whether through a trade association, the MNC-LE Alliance, or a direct approach. For an SME with a genuinely differentiated technical capability, a PACT-supported relationship can deliver funded access to an MNC’s scale, expertise and international reach in a way a standalone grant never could.
Raffles Corporate Services can help you assess whether your business is positioned to attract a PACT partnership, and review the commercial agreements once a partner is identified.
— The Editorial Team, Raffles Corporate Services