MAS introduces measures to strengthen Singapore's competitiveness as an asset management hub

Singapore reinforces its proposition for asset managers and family offices

The Monetary Authority of Singapore (MAS) announced on 19 August 2026 a package of measures to strengthen Singapore’s competitiveness as a leading asset management hub. The measures comprise a tax exemption for profit-related returns from the provision of fund management services to qualifying funds, a new Hedge Fund Investment Programme and a new Investment Management Track under the Overseas Networks & Expertise (ONE) Pass framework.

Taken together with Singapore’s existing fund tax incentives and the revised single family office (SFO) framework that took effect on 15 June 2026, the measures reinforce Singapore’s attractiveness as an asset management hub.

The Three Measures

1. Tax Exemption for Qualifying Profit-Related Returns

MAS and the Ministry of Finance plan to introduce a tax exemption for qualifying profit-related returns arising from the provision of fund management services to qualifying funds. The qualifying funds are those within sections 13D, 13O, 13OA, 13U and 13V of the Income Tax Act 1947 and managed by Singapore-based fund managers. They include eligible funds managed by SFOs.

The exemption will apply where a share of a qualifying fund’s profits is contractually received by a corporate entity, partnership or individual, directly or indirectly, for providing fund management services. It is expected to take effect from the Year of Assessment 2027, with further details to be announced at Budget 2027.

Current tax position

Under the existing fund tax incentive schemes under sections 13D, 13O, 13OA, 13U and 13V of the Income Tax Act, subject to the applicable conditions and economic substance requirements, qualifying income derived by a qualifying fund may be exempt from Singapore income tax. Where all of the relevant income falls within the applicable exemption, this can result in a 0% effective Singapore tax rate at fund level on that qualifying investment income.

However, the position for the fund manager is presently different. Management fees and other taxable remuneration received for providing fund management services generally remain subject to the ordinary Singapore tax rules. The proposed exemption is therefore significant because it would extend favourable tax treatment to a defined category of profit-related returns received in connection with the management of qualifying funds.

Importantly, the announced measure is targeted at qualifying profit-related returns received through commercial fund arrangements. MAS has stated that it will not apply to ordinary salaries, bonuses or other forms of employee remuneration. Until the detailed conditions are announced at Budget 2027, it should not be assumed that every carried interest, performance allocation, incentive fee or other profit-linked arrangement will qualify.

2. MAS Hedge Fund Investment Programme

MAS will introduce a new Hedge Fund Investment Programme to invest with hedge fund managers that are committed to establishing or deepening their presence in Singapore. Beyond anchoring global and regional hedge fund managers and investment talent, the programme is intended to support the wider hedge fund investment ecosystem, including ancillary service providers and prime brokerages. MAS will provide further details when ready.

3. ONE Pass Investment Management Track

MAS and the Ministry of Manpower intend to introduce a new Investment Management Track under the ONE Pass framework for global leaders and senior investment professionals who have the potential to contribute, or are already contributing, significantly to Singapore’s asset management industry.

The new track may include refining how salaries are assessed to reflect established compensation structures in the industry, including returns linked to investment performance and fund outcomes. This recognises that these returns may constitute a significant and recurring component of the compensation of individuals providing specialised fund management services, in addition to fixed monthly salaries.

Why Singapore Remains Attractive for Asset Managers and Family Offices

The three new measures should not be viewed in isolation. They complement an existing regime that combines an accessible regulatory pathway, established fund tax incentives and a deep asset management ecosystem.

A straightforward regulatory pathway for SFOs

The revised SFO framework, which took effect on 15 June 2026, provides a structure-agnostic class exemption from fund management licensing for qualifying SFOs. Rather than applying for an individual exemption, an SFO that meets the qualifying requirements can rely on the class exemption through a notification-based process.

Under the revised framework, a qualifying SFO must:

• notify MAS of its operations;
• maintain an account with a bank licensed by MAS; and
• file a straightforward annual return stating its total assets under management and the name of its bank.

Existing SFOs operating in Singapore have a one-year transitional period, until 15 June 2027, to comply with the revised framework. The notification regime provides a clearer and more streamlined route for genuine SFOs while enabling MAS to maintain appropriate oversight of the sector.

The licensing exemption and the fund tax incentives remain separate regimes. Reliance on the SFO class exemption does not, by itself, confer a tax exemption. A family investment fund must separately satisfy the conditions applicable to the relevant fund tax incentive, including the applicable economic substance requirements.

A broader asset management proposition

The new Hedge Fund Investment Programme and ONE Pass Investment Management Track will add capital-allocation and talent components to the existing regulatory and tax framework. They signal an intention to anchor not only fund vehicles, but also substantive investment management activities, senior decision-makers and supporting services in Singapore.

The combination of a potentially 0% fund-level effective rate on qualifying investment income, a planned exemption for qualifying profit-related returns, a notification-based SFO licensing framework and measures directed at attracting senior investment talent creates a coherent proposition for anchoring family office activity in Singapore.

This is reinforced by Singapore’s legal and regulatory certainty, political and economic stability, strong financial infrastructure and connectivity to the wider Asian region. For asset managers and families seeking a long-term base from which to invest across Asia, the package brings together tax efficiency, regulatory clarity, access to talent and proximity to regional opportunities.

If you have any questions or would like to discuss how these measures may affect your business, please contact us.