Singapore's Monetary Authority of Singapore (MAS) is in discussions with investment firms about reducing taxes for fund managers. One measure under consideration is cutting the tax rate of a special incentive program from Singapore's standard corporate tax rate of 17% to 10%, allowing firms to pass on savings to portfolio managers. This initiative aims to sharpen Singapore's competitiveness as a financial center and retain talent.
The proposed changes by MAS come as Hong Kong is also aggressively pursuing financial institutions and talent. Hong Kong plans tax exemptions on "carried interest" for a wide range of alternative asset managers, which is a significant portion of fund managers' annual compensation. Fund executives have reportedly warned Singaporean regulators that Hong Kong's tax law changes could prompt relocations to that city.
Beyond tax changes, Hong Kong has already implemented broader measures to attract global firms and executives, including easing red tape for family offices, embracing cryptocurrencies, and proposing looser regulations for mutual funds. Singapore's efforts, including a S$1.5 billion top-up to the Equity Market Development Programme (EQDP) and a 40% corporate income tax rebate for active companies, indicate a broader strategy to maintain its position as a leading financial hub.
