MAS adds new asset-management incentives as competition from Hong Kong heats up
Measures comprise new tax-exemption scheme, hedge fund investment programme, initiative to attract foreign talent
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[SINGAPORE] The Monetary Authority of Singapore (MAS) is looking to add a slew of new measures – comprising a new tax-exemption scheme, a hedge fund investment programme and a work-pass track to attract foreign talent – to boost Singapore’s competitiveness as an asset-management hub.
The three measures aim to incentivise key asset managers to anchor their business activities, capital allocation and talent deployment in the country, said MAS on Wednesday (Aug 19).
The moves come amid growing industry concern that Singapore risks losing investment talent and fund-management mandates to competing hubs, as jurisdictions including Hong Kong step up efforts to attract asset managers.
Hong Kong in June gazetted a Bill to expand tax breaks for private funds, family offices and carried interest. This has widened its effective tax advantage over rivals such as Singapore by broadening tax-free asset classes and eliminating the 5 per cent cap on incidental profits.
Chee Hong Tat, Singapore’s minister for national development and deputy chairman of MAS, said that he does not see the competition with Hong Kong as a “zero-sum” game, as there is enough scope for both markets to grow as financial sectors.
But Singapore will have to look at the overall competitive landscape to maintain its attractiveness.
“We will do what it takes to maintain and uphold the competitiveness of our financial services industry,” he said.
In response to queries over the timing of the announcement, Chee noted that changes to tax policies are typically made during Singapore’s yearly Budgets, but he found it important to share updates at this juncture after speaking to the asset-management industry.
“(This is) so that they can take this into account in deciding where they want to locate their business, where they want to grow their business,” he added.
In a July letter to MAS, the Alternative Investment Management Association (Aima) urged Singapore to come up with a timely and strategic response, as competition for asset management intensifies in the region.
This comes as Aima has found more hedge fund firms and asset managers looking to shift staff and offices from Singapore to Hong Kong or other cities with more favourable tax incentive frameworks, with some even looking to shift “in months”.
“This is not about matching Hong Kong. It is about renewing Singapore’s proposition,” Aima said in the letter.
Three measures
The first of MAS’ measures is a proposed tax exemption to cover profit-related returns arising from the provision of fund-management services to qualifying funds.
The qualifying funds, which are already subject to economic substance requirements, cover those under sections 13D, 13O, 13OA, 13U and 13V of the Income Tax Act 1947 – including funds managed by single-family offices.
Tax exemptions will apply when a share of the qualifying fund’s profits is contractually received by corporate entities, partnerships or individuals when providing fund-management services.
The proposed tax exemption is set to take effect from the year of assessment 2027, with more details to be announced at Budget 2027.
Second, MAS will introduce a new hedge fund investment programme for hedge fund managers looking to set up or deepen their presence in Singapore.
MAS expects the programme to support the growth of the country’s hedge fund investment ecosystem, including ancillary service providers and prime brokerages.
More details will be provided when ready, the authority noted.
Third, MAS is adding an investment management track under the Overseas Networks and Expertise Pass framework, which is a work-pass scheme targeted at top foreign professionals.
This new track caters to foreign leaders and senior investment professionals “who have the potential to contribute or are already contributing significantly” to Singapore’s asset-management industry, MAS said.
This track may include reassessing salaries to better reflect established compensation structures in the industry, such as recognising returns linked to investment performance and fund outcomes.
In Aima’s letter, it noted that individual taxation was the decisive lever for the most mobile cohort.
Relocation decisions are made on a total-package basis, and talent is where the pressure is felt first, it said.
In 2025, total assets under management (AUM) in Singapore rose 10.1 per cent to S$6.7 trillion.
AUM in the traditional sector grew 9 per cent, compared with 16 per cent in 2024.
Meanwhile, AUM in alternatives – including private equity and venture capital, hedge funds, real estate, and real estate investment trusts – rose 0.4 per cent in 2025, from 14 per cent in 2024.
Singapore’s asset management industry accounts for around 15 per cent of the financial sector’s output and 13 per cent of its employment.
Aima in its letter encouraged MAS to communicate its direction of travel to the industry “at the earliest opportunity, even ahead of finalising details”.
“A directional signal now would steady managers currently weighing hiring, platform expansion and regional-headquarters decisions,” the letter stated.
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