Singapore's Monetary Authority of Singapore (MAS) is exploring tax relief measures for fund managers to enhance its standing as a financial hub and to attract talent. This initiative comes in response to warnings from fund executives that Hong Kong's proposed tax exemptions on "carried interest" for alternative asset managers could lead financial institutions to relocate.
One key measure under consideration by MAS is a reduction in the tax rate for investment institutions under a specific incentive scheme. This would see the tax rate drop from Singapore's standard corporate tax rate of 17% to 10%, with the resulting savings passed on to portfolio managers. This move is part of Singapore's broader effort to attract more global capital, mirroring Hong Kong's aggressive strategies which include streamlining bureaucracy for family offices, embracing cryptocurrencies, and easing regulations for mutual funds.
MAS's discussions with investment firms are ongoing, but experts suggest the outcome might not be a blanket reduction. Instead, it is more likely to be a targeted set of concessions aimed at attracting specific types of managers, particularly those with larger, institutionally-oriented strategies, while upholding the credibility of Singapore's overall tax framework. This follows previous adjustments in 2025 to flagship fund tax incentive schemes (Sections 13O and 13U) and the Financial Sector Incentive (FSI) scheme, which tightened eligibility criteria alongside expanding benefits.
Beyond tax incentives, Singapore's Budget 2026 also announced a 40% corporate income tax rebate for active companies, which would benefit fund management firms with significant operational footprints in the city-state. Additionally, a S$1.5 billion top-up to MAS’s Equity Market Development Programme (EQDP) aims to improve the liquidity and breadth of the Singapore Exchange, creating a self-reinforcing cycle to attract more institutional managers and capital. These efforts collectively underscore Singapore's commitment to securing its position as a leading global asset management center.
