Knowledge Highlights 25 August 2026
MAS to introduce new initiatives to boost Singapore’s competitiveness as leading asset management hub
In a move to strengthen Singapore’s competitiveness as a leading asset management hub and fund domicile, the Monetary Authority of Singapore (“MAS”) announced a set of measures on 19 August 2026 to help anchor high-value asset management activities, deepen industry capabilities, and attract top asset management talent, amid growing international competition. The measures build on the positive growth momentum experienced in Singapore’s asset management industry in recent years, with Singapore’s assets under management growing by 10% from the previous year to reach S$6.7 trillion in 2025, its highest-ever level, as reported by MAS in its Singapore Asset Management Survey 2025.
The measures comprise:
- Tax exemption for profit-related returns: A tax exemption for profit-related returns from the provision of fund management services to qualifying funds. This tax exemption will apply to a share of investment profits earned by fund managers and investment professionals when they deliver strong returns for investors in qualifying funds.
- MAS Hedge Fund Investment Programme: A new hedge fund investment programme to anchor leading hedge fund managers in Singapore.
- ONE Pass Investment Management Track: 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.
Tax exemption for profit-related returns
To sharpen the global competitiveness of Singapore as an asset management hub, MAS and the Ministry of Finance intend to introduce a tax exemption for profit-related returns arising from the provision of fund management services to qualifying funds. These are funds that qualify for tax exemption under sections 13D, 13O, 13OA, 13U, and 13V of the Income Tax Act 1947 and are managed by Singapore-based fund managers. Such funds are already required to meet economic substance requirements, including minimum headcount.
Slated to take effect from the Year of Assessment 2027, the proposed tax exemption 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.
While the conditions and other details for the tax exemption are unknown at this stage, this is a significant development that is being watched by the asset management industry with keen interest. Currently, structuring the distribution of such profit-related returns from investment funds is often complex and may involve the use of offshore vehicles and other structures. Other competing fund domiciles have also announced their own incentives and measures targeting similar areas. MAS’ announcement is therefore timely and will be attractive for asset managers if it can provide tax certainty for out-performance while simplifying complex structuring. As asset managers adopt a range of structures for profit-related returns, it will be helpful for the proposed tax exemption to be sufficiently structure-agnostic to ensure that its legal scope aligns with the policy intent.
MAS Hedge Fund Investment Programme
With a view to anchoring global and regional hedge fund managers and investment talent in Singapore, MAS will introduce a new Hedge Fund Investment Programme under which MAS will invest with hedge fund managers that are committed to establishing or deepening their presence in Singapore. The programme will also support the growth of Singapore’s hedge fund investment ecosystem, including ancillary service providers and prime brokerages. MAS will provide further details in due course.
According to the Financial Times, assets managed by hedge funds rose by US$409 billion, the largest amount ever, in Q2 2026 fuelled by the AI-driven boom in share prices. For hedge fund managers looking to deploy capital into Asia-focused strategies and tap on institutional and accredited investors in the region, Singapore already boasts several attractions as a financial centre, including an extensive double tax treaty network and clear and robust regulatory framework and financial system. MAS’ programme will further bolster this.
ONE Pass Investment Management Track
MAS and the Ministry of Manpower are launching a new Investment Management Track under the ONE Pass framework to cater especially to global leaders and senior investment professionals who have the potential to contribute or are already contributing significantly to Singapore’s asset management industry.
Under this track, the assessment of salaries may be refined to better reflect established compensation structures in the industry, such as recognising returns linked to investment performance and fund outcomes, as such arrangements form a significant and recurring component of compensation for individuals performing specialised fund management services, besides fixed monthly salaries.
This enhancement will provide more flexibility for senior and talented investment professionals to live and work in Singapore and complement other existing schemes.
Comment
The proposed measures announced by MAS have been well received by the asset management industry and signal MAS’ continued efforts to enhance and grow Singapore as a leading funds and asset management jurisdiction. The announcement follows earlier initiatives such as the introduction of the Singapore variable capital company, and continued refinement of Singapore’s regulatory and tax framework for single family offices (“SFOs”), in particular the introduction of the SFO class licensing exemption and enhancements to the section 13O, 13OA and 13U tax incentives applicable to SFO-managed funds. MAS is also expected to soon announce enhancements to the list of “designated investments”.
Asset managers should monitor these developments closely and consider whether any adjustments or restructuring may be appropriate once the detailed rules are published.
Reference materials
The press release is available on the MAS website www.mas.gov.sg.
