Singapore Unveils Tax Breaks, Hedge Fund Scheme to Attract Asset Managers

Singapore has announced a policy package aimed at reinforcing its position as a leading fund management hub. The measures, outlined by the Monetary Authority of Singapore (MAS) and the Ministry of Finance, include a planned tax exemption for profit-linked returns earned from providing fund management services to qualifying funds.

The exemption is designed for funds that already meet economic substance conditions, including minimum staffing requirements. It is expected to take effect from the year of assessment 2027, with further details to be announced at Budget 2027. The measure would cover qualifying profit-related returns received through commercial fund arrangements, including cases where part of a qualifying fund's profits is contractually paid to companies, partnerships, or individuals in return for fund management services.

In addition, MAS will launch a hedge fund investment programme, under which it will invest with hedge fund managers that commit to setting up or expanding operations in Singapore. This initiative is intended to attract global hedge fund talent and capital to the city-state.

A third component introduces a new investment management track within the Overseas Networks & Expertise (ONE Pass) framework. This route is aimed at global leaders and senior investment professionals who could make, or are already making, a significant contribution to the asset management industry. The authorities said the track could involve changes to how salary is assessed, potentially recognising returns tied to investment performance and fund outcomes alongside fixed monthly pay.

The policy package comes amid intensifying competition for capital and expertise across financial centres. Reports suggest Hong Kong is weighing its own broader set of tax changes for the investment sector, including possible reforms for proprietary trading firms such as Jane Street and Citadel Securities.

Singapore has also been addressing operational concerns in its financial sector. In May, the financial regulator told private banks to reduce the time needed for client account opening, following major money-laundering cases that had contributed to lengthy delays.

These measures reflect Singapore's proactive approach to maintaining its competitive edge in asset management. By combining tax incentives, direct investment support, and streamlined talent pathways, the city-state is signalling its commitment to remaining a preferred destination for global asset managers.