Executive Summary
On 19 August 2026, the Monetary Authority of Singapore (“MAS“) announced a package of three measures designed to strengthen Singapore’s competitiveness as a leading asset management hub. The announcement signals a decisive and timely response to intensifying global and regional competition and sends a clear directional message to the asset management industry ahead of Budget 2027.
Collectively, the following three measures apply a multi-pronged approach to the key considerations that shape fund managers’ jurisdictional decisions, namely, tax treatment, capital deployment and talent mobility.
- Tax exemption for profit-related returns arising from fund management services provided to qualifying funds, effective from Year of Assessment 2027;
- MAS Hedge Fund Investment Programme to better anchor hedge funds to Singapore and to support the long-term growth of Singapore’s hedge fund investment ecosystem; and
- Investment Management Track, a new immigration pathway under the Overseas Networks & Expertise (“ONE“) Pass framework dedicated to the asset management industry, to attract top global leaders and senior asset management professionals.
This Update provides an overview of the three measures and highlights the practical significance of each of the measures.
Tax Exemption for Profit-Related Returns
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. This tax exemption targets qualifying performance-linked profit-sharing arrangements that represent a share of investment profits earned by fund managers and investment professionals when they deliver returns for investors in qualifying funds that are received through commercial fund arrangements, 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.
Qualifying funds refer to funds that qualify for tax incentive schemes, including funds exempted under sections 13O and 13U of the Income Tax Act 1947 (“ITA“). Qualifying funds must continue to be managed by a Singapore-based fund manager and meet existing economic substance requirements, including minimum headcount thresholds and minimum local business spending requirements.
The proposed tax exemption seeks to recognise performance-linked profit-sharing arrangements as a recognised feature of the asset management industry, and is expected to bring Singapore on par with global asset management hubs.
Further details about the proposed tax exemption, which is expected to take effect from Year of Assessment 2027, will be announced at Budget 2027 shortly.
MAS Hedge Fund Investment Programme
MAS will establish a new Hedge Fund Investment Programme to invest with hedge fund managers who are committed to establishing or deepening their presence in Singapore primarily through providing access to capital and supporting the all-round growth of the hedge fund sector.
In addition to anchoring global and regional hedge fund managers, the Hedge Fund Investment Programme is intended to strengthen Singapore’s broader hedge fund ecosystem, including ancillary service providers and prime brokerages. Further details about the Hedge Fund Investment Programme will be announced in due course.
Investment Management Track under ONE Pass Framework
MAS and the Ministry of Manpower (“MOM“) will introduce a new Investment Management Track under the Overseas Networks and Expertise Pass (“ONE Pass“) framework. The ONE Pass framework, administered by MOM, is a five-year work pass for top global talent. Unlike standard employment passes that are tied to a single employer, holders of ONE Pass are allowed to work for multiple companies or start businesses freely.
The existing ONE Pass requires a minimum monthly salary of S$30,000. The new Investment Management Track will refine how salaries are assessed to better reflect the asset management industry’s compensation structures, including acknowledging the significant and recurring role of performance-linked returns in senior investment professionals’ total compensation, in addition to fixed monthly salaries. The new Investment Management Track recognises the industry’s established remuneration architecture, thereby ensuring that senior portfolio managers and investment professionals qualify for Singapore’s most flexible work pass.
Key Insights
The above three measures represent a multi-pronged push to boost the attractiveness of Singapore as a leading asset management hub. The MAS announcement ahead of Budget 2027 provides directional clarity before final legislative details and allows fund managers to begin factoring the anticipated measures into their planning with a reasonable degree of confidence. We urge fund managers to keep a close watch on further details to take advantage of these initiatives, which are expected to have a material bearing on, and provide certainty in fund structuring, executive compensation structuring and office set-up and business expansion decisions.
For more information, please click here for the MAS press release dated 19 August titled “MAS Introduces Measures to Strengthen Singapore’s Competitiveness as a Leading Asset Management Hub“.
How Can We Help?
We are closely monitoring the development of the detailed guidance for each of the three measures announced on 19 August 2026. We encourage fund managers, whether already operating in Singapore or evaluating it as a base for Asian operations, to engage with our team set out on this page at the earliest opportunity to assess how the new measures may be incorporated into fund structuring, talent frameworks and broader operational planning.
If you have any queries on the above, please reach out to our team set out on this page. For regional Funds & Investment Management matters, please see Rajah & Tann Asia’s Funds & Investment Management Practice for more information.
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