Tax Incentives in Singapore 2026: New MAS Measures for Fund Managers and Family Offices

Key Takeaways from This Update in 1 Minute

• New tax exemption: Applicable to carried interest for fund managers under sections 13D, 13O, and 13U of the Income Tax Act.
• Focus on hedge funds: Launch of a specific public investment program to attract and consolidate hedge fund managers.
• Visa facilities: Adaptation of the ONE Pass for investment executives, recognizing bonuses and dividends as part of eligible salary.
• Competition for Asian capital is significantly accelerating against Hong Kong.

The global wealth management landscape is undergoing an accelerated transformation this year, 2026. The Monetary Authority of Singapore (MAS) has just announced an aggressive package of strategic measures designed to bolster the city-state’s financial sovereignty.

The reason for this reaction?

The growing fiscal aggressiveness of rival jurisdictions, especially Hong Kong, which recently expanded its tax exemptions for family offices and private funds. On this high-level playing field, international capital has no geographic loyalties; it moves where it finds greater legal certainty and tax optimization. With the new reforms presented by the Singapore government, the rules of the game are shifting back in favor of the Malay Peninsula.

For high-net-worth investors and managers planning their corporate relocation, understanding the depth of these regulatory changes is not optional. It is the factor that will define the profitability of their structures over the next ten years.

The Context of the Reform: Singapore vs. Hong Kong’s Push

The asset management market does not allow for complacency. Hong Kong recently passed a legal reform that removes the 5% cap on incidental benefits for exempt funds and expands the categories of tax-free assets. This move has sounded alarms in the offices at Raffles Place. Private equity firms and hedge funds analyze the operating costs and tax impact of their investment teams mathematically every day.

Although the Singaporean government clarifies that this scenario should not be seen as a zero-sum game, the practical reality demands firmness. The growth of Assets Under Management (AUM) in Singapore’s alternative investment sector experienced a notable slowdown last year, stabilizing at a modest 0.4%, compared to the dynamic progress of previous periods. The MAS’s response has been swift, attacking the three pillars of a financial center’s attraction at their root: corporate taxes, liquidity for the fund ecosystem, and retention of key talent.

The Three New MAS Measures for the Wealth Sector

1. Tax Exemption for ‘Carried Interest’ and Performance Returns

The flagship measure of this package is the proposal to exempt taxes on performance-linked management returns (commonly known in the industry as carried interest). Until now, the taxation of these returns generated friction and complex fiscal asymmetries for resident managers.

Under the new regulations, which will come into effect for the 2027 Year of Assessment, returns contractually received for fund management services will be tax-exempt. This advantage will apply as long as the investment vehicle operates under the traditional incentive regimes approved by the MAS:

Sections 13D, 13O (regime for local funds), 13U (large-scale funds), and 13V (venture capital funds under the VCC structure) of the Singapore Income Tax Act.

This exemption will directly impact the location decisions of firms that structure their planning under the Singapore tax system, shielding the profits of managing partners.

2. Specific Investment Program for ‘Hedge Funds’

To ensure that investment firms find a liquid and dynamic market, the MAS will launch a public co-investment program aimed at hedge fund managers that establish their base of operations on the island. The program seeks to fuel not only the managers but also the entire surrounding ecosystem of specialized support: custodian banks, prime brokerages, and specialized legal advisors.

3. Adaptation of the ONE Pass Visa for the Financial Sector

Personal taxation is the definitive factor for the mobility of the world’s most sought-after managers. Aware of this, immigration and employment authorities, in coordination with the MAS, will introduce a specific pathway for investment management within the exclusive framework of the ONE Pass (Overseas Networks and Expertise Pass).

The great innovation of this path is that the required monthly salary threshold will not be calculated solely based on a traditional fixed salary. The new regulations will explicitly recognize variable compensation linked to fund performance and capital gains obtained from investments. This is a fundamental operational change that greatly facilitates obtaining residency visas in Singapore for elite professionals from the City of London, New York, or Geneva.

Comparative Fiscal Frameworks: Singapore vs. Hong Kong (2026)

To visualize how the city-state is positioned after these announcements, let us analyze the competitive structure in the following analysis table:

The Opinion of Our Experts at Singapore Way

The MAS decision demonstrates outstanding regulatory agility. While other jurisdictions take years to adjust their tax laws, Singapore operates with the speed of a private corporation. The advance announcement, prior to the publication of final details in the state budget, has a clear psychological objective: to stop in its tracks the temptation of any talent migration toward Hong Kong.

What does this mean for you if you manage significant family wealth or a private fund?

It means that structures under sections 13O and 13U acquire an unprecedented layer of profitability. It is not just about the tax exemption of the fund itself, but about how the partners and directors of the local management firm receive their personal earnings without suffering withholdings or double taxation.

Last week, a European client dedicated to venture capital investment presented us with a common problem when structuring the incorporation of a company in Singapore that would act as the manager for his family structure. He was concerned that the Ministry of Manpower (MOM) would not properly account for his historical success bonuses when renewing his high-level immigration status, forcing him to set an excessively high base salary with the consequent impact on social security costs and local cash flows.

Thanks to our 360º specialization and immediate analysis of these MAS guidelines, we were able to restructure the partnership agreement of his new Pte Ltd under the management fee exemption framework. In this way, we aligned his remuneration with the new ONE Pass guidelines, guaranteeing the viability of his long-term family visa without unbalancing the initial corporate treasury. This capacity for surgical adaptation is what makes the difference in high-level relocations.

The time to design the perfect structure for your assets is now, before license applications saturate the MAS and ACRA processing times later this year. If you wish to explore how to maximize these new tax benefits and ensure the transition of your family or corporate structure under the best legal guarantees, let us analyze your relocation case without obligation with our team of senior consultants.