MAS unveils tax, hedge fund and talent measures to strengthen Singapore’s asset management hub

The Monetary Authority of Singapore (MAS) today announced a set of measures to strengthen Singapore's competitiveness as a leading asset management hub.

Singapore’s asset management industry is a key growth engine for our financial sector, accounting for around 15% of the sector’s output and 13% of its employment. Over the past five years, the industry also grew positively by 7.5% per year on average to almost SGD 7 trillion ($5.4 trillion). This set of measures builds on the industry’s positive growth momentum, and will help anchor high value asset management activities, deepen industry capabilities and attract top asset management talent, amidst growing international competition.

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 to anchor leading hedge fund managers in Singapore; and
• A new Investment Management Track under the Overseas Networks & Expertise (ONE) Pass framework to attract top global leaders and senior investment professionals in asset management.

As a package, the three measures aim to incentivise key asset managers to anchor their business activities, capital allocation and talent deployment in Singapore.

Tax exemption for profit-related returns

MAS and the Ministry of Finance (MOF) plan to introduce a tax exemption for profit-related returns arising from the provision of fund management services to qualifying funds.

Such funds are already required to meet economic substance requirements, including minimum headcount. This tax exemption is targeted and aimed at sharpening the global competitiveness of Singapore as an asset management hub.

The proposed tax exemption is expected to take effect from the Year of Assessment 2027. It will apply to qualifying profit-related returns that are received through commercial fund arrangements, specifically where a share of a qualifying fund’s profits is contractually received by corporate entities, partnerships or individuals directly or indirectly for the provision of fund management services. The tax exemption will take into account prevailing commercial fund management arrangements. Further details will be announced at Budget 2027.

MAS Hedge Fund Investment Programme

In addition, 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, this programme will support the growth of Singapore’s hedge fund investment ecosystem, including ancillary service providers and prime brokerages. More details will be shared when ready.

ONE Pass Investment Management Track

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

This track may include refining the assessment of salaries to better reflect established compensation structures in the industry, such as recognising returns linked to investment performance and fund outcomes. This would acknowledge that such arrangements form a significant and recurring component of compensation for individuals performing specialised fund management services, besides fixed monthly salaries.

The asset management industry is an important contributor of quality jobs for locals. It supports a wide range of high-quality roles in functions such as portfolio management, investment research, client servicing, and risk management, with locals making up around 80% of the asset management industry’s total workforce of close to 25,000 today. These measures will strengthen the competitiveness of Singapore’s asset management industry, so that it can continue to provide many good jobs for Singaporeans.

Re-disseminated by Wealth and Society