Singapore's Monetary Authority (MAS) announced new measures to strengthen its position as an asset management hub. These include a proposed tax exemption for profit-related returns from fund management services provided to qualifying funds, a new hedge fund investment program, and an Investment Management Track under the Overseas Networks and Expertise Pass framework to attract top foreign talent. These initiatives are a direct response to intensifying regional competition, particularly from Hong Kong, which has recently expanded tax breaks for private funds and family offices.
The proposed tax exemption, which will apply to a share of investment profits earned by fund managers when they deliver strong returns for investors in qualifying funds, is expected to take effect from the year of assessment 2027. This move aims to sharpen Singapore's global competitiveness. Additionally, the hedge fund investment program seeks to support the growth of Singapore's hedge fund ecosystem and anchor global and regional hedge fund managers.
The new Investment Management Track for work passes will cater to foreign leaders and senior investment professionals, potentially reassessing salary benchmarks to better reflect industry compensation structures, such as performance-linked returns. This addresses the concern that talent mobility and recruitment decisions are often based on a total package. The industry in Singapore managed $6.7 trillion in assets under management (AUM) in 2025, with an average annual growth of 7.5% over the past five years.
While Singapore's Minister for National Development, Chee Hong Tat, stated that he does not view the competition with Hong Kong as a "zero-sum game," he emphasized the need for Singapore to continuously evaluate the competitive landscape. The measures aim to encourage key asset managers to establish their business, capital allocation, and talent deployment within the country. Industry bodies like the Alternative Investment Management Association (Aima) had urged Singapore to respond strategically to prevent asset managers and staff from relocating to cities with more favorable tax incentive frameworks.
The asset management industry contributes approximately 15% to Singapore's financial sector output and accounts for 13% of its employment, providing 25,000 jobs, with 80% held by locals. The swift announcement of these measures, ahead of the finalization of details in Budget 2027, was seen by industry observers as a crucial signal to firms contemplating hiring and expansion decisions.
