On 19 August 2026, MAS announced three measures to strengthen Singapore’s competitiveness as an asset management hub. Those are its words. Mine would be that this is a defence, and the timing is the reason.
The package has three parts: a tax exemption on profit-related returns from fund management services, a new Hedge Fund Investment Programme, and an Investment Management Track under the Overseas Networks and Expertise (ONE) Pass. Most of the coverage has treated it as good news for Singapore, which it is. What the coverage has largely skipped is the calendar.
Hong Kong gazetted its own bill on 12 June 2026 and gave it a first reading in the Legislative Council on 24 June. That is roughly ten weeks ahead of Singapore, and ten weeks is the generous reading. Hong Kong consulted its industry between November 2024 and January 2025 and carried the commitment through its Policy Address. The real head start is closer to a year.
Read the two packages side by side and you learn more than either tells you alone.
What Hong Kong actually put on the table
Start with what was already there, because this is where most commentary gets it wrong. Hong Kong has taxed eligible carried interest at 0% since 2021, at both the profits tax and the salaries tax level, so the manager and the individual both benefit. That is not new.
What the 2026 Bill does is widen the gate, and widen it a long way. The concession used to be confined to private equity. It now reaches a much broader range of funds and strategies, including hedge funds, private credit, immovable property situated outside Hong Kong, and digital assets. The hurdle rate condition is gone, so carry no longer has to wait for investors to clear a minimum return before it qualifies. The Hong Kong Monetary Authority certification requirement has been removed along with the associated auditor’s report, stripping out a step that used to cost both time and money.
Then there is the part that should concentrate the mind. Hong Kong’s measure applies retrospectively to 1 April 2025, and the Inland Revenue Department has issued a transitional measure permitting eligible taxpayers to file their profits tax returns on that basis for the year of assessment 2025/26, before the bill has even been enacted.
Singapore’s exemption is expected to take effect from the year of assessment 2027, with the rules themselves due at Budget 2027. The ONE Pass Investment Management Track is described as proposed.
So a portfolio manager weighing the two jurisdictions this quarter is not comparing two tax exemptions. She is comparing a drafted, retrospective, already-filable concession in Hong Kong against an announced, forward-looking and as yet undefined one in Singapore. Those are different products, whatever the eventual rates turn out to be.
Dubai is the leg everyone forgets
While Hong Kong and Singapore trade announcements, the Gulf has been taking share quietly. Entities in the DIFC (Dubai International Financial Centre) and ADGM (Abu Dhabi Global Market) can access a 0% corporate tax rate on qualifying income under the free zone regime, subject to meeting substance requirements and staying within the de minimis limits for non-qualifying revenue. There is no personal income tax and no capital gains tax. The DIFC closed 2025 with 557 wealth and asset management firms, including 102 hedge funds, up 22% on the year.
One correction to the usual framing. In my experience Dubai is often not an either-or against Singapore. Families with both Asian and Middle Eastern exposure frequently run both, using a Singapore vehicle for Asian mandates and a DIFC or ADGM entity for the MENA-facing side. Advisers who present the Gulf as a binary alternative tend to lose credibility with clients who worked this out for themselves some time ago.
Why I think Singapore had to move
My position is straightforward. Singapore’s need to stay competitive is paramount, and I do not think it is a close call.
The numbers explain why. Singapore’s asset management industry has grown at an average of 7.5% a year over the past five years and now runs close to S$7 trillion in assets under management. It accounts for roughly 15% of the financial sector’s output and 13% of its employment. Around 25,000 people work in it, and about 80% of them are locals, in portfolio management, investment research, client servicing and risk.
That last figure answers the objection before it is made. There is a fair debate about whether one well-paid sector should get a bespoke immigration lane while ordinary employers absorb tightening COMPASS salary benchmarks and an Employment Pass qualifying salary that rises again in January 2027. I understand the discomfort and I would not wave it away. But an industry where four in five jobs are held by Singaporeans is not a foreign enclave. If the senior mandates leave for Hong Kong or Dubai, the local jobs underneath them leave too. Defending the top of the stack is how the rest of it stays here.
On the ONE Pass itself, the existing test deserved revisiting regardless of the competition. For most applicants it asks whether they draw a fixed monthly salary of S$30,000 or more from a single employer. Senior investment professionals are frequently paid a modest base and earn the real money through carried interest and performance fees. So a genuinely elite portfolio manager can fail the test while a mediocre executive on a comfortable base salary sails through it. That is a measurement error rather than a policy judgment.
MAS has said the new track may refine how salaries are assessed to recognise returns linked to investment performance. Nothing is settled until Budget 2027. But there is recent precedent: MOM has already announced a ONE Pass (AI and Tech) track from 1 January 2027 that lets applicants meet the threshold by combining a S$22,500 base with vested non-cash components. The principle that fixed monthly salary is a poor proxy for what senior talent is worth has already been conceded in another sector.
The part that will decide whether any of this works
Here is what I tell clients, and it is the thing they most often underestimate. Substance matters more than form.
The tax exemption does not attach to a person who moves to Singapore. It attaches to qualifying funds, and qualifying means clearing real economic substance conditions.
Under Section 13O a fund needs S$5 million in designated investments at the end of every financial year, and the fund manager must employ at least two Singapore tax-resident investment professionals. Section 13U requires S$50 million, tested both at application and at each financial year end, and at least three investment professionals. Local business spending under both schemes is now tiered by fund size: S$200,000 below S$250 million in assets, S$300,000 between S$250 million and S$2 billion, and S$500,000 above that.
Two details are worth pulling out, because they are where people get caught.
The investment professionals are employed by the fund manager, not by the fund. That sounds like pedantry until you are working out who needs a work pass and whose payroll they sit on, at which point it decides the whole operating structure.
And the annual testing is the quiet change. A fund that qualified on the day its award was granted can fall out of qualification in a year when assets dip below the threshold, and the exemption is lost for that basis period. Structures with 13O awards that commenced before 1 January 2025 are not on these criteria yet, staying on the older flat spending test until the financial year ending in 2027. A fair number of existing structures are sitting inside that grace period and their owners have not registered that a deadline is coming.
Now put the two halves together, because this is what gets missed. Economic substance means investment professionals physically present in Singapore. The ONE Pass track is the mechanism that gets them here. The tax incentive and the immigration route are mechanically dependent on each other. You cannot solve one without the other.
Yet in most firms these run as separate workstreams. A tax adviser handles the 13O or 13U application. An immigration agent handles the passes. A corporate secretarial firm handles the entity and the filings. Each does competent work and nobody owns the sequencing. That seam is where the expensive mistakes live: a structure approved before the people can lawfully be here, or a headcount commitment made before anyone checked whether those individuals would clear a pass.
What I cannot tell you
I would rather be honest about the limits of my own vantage point.
I cannot tell you whether enquiries are shifting from Hong Kong to Singapore or the other way. I do not see decisive movement in either direction from where I sit, and I would treat anyone claiming a clean trend line this early with scepticism. Hong Kong’s bill has cleared clause-by-clause examination in committee but has not completed its second reading. Singapore’s rules are not written. Behaviour will follow the final detail, not the press releases, and that detail arrives at Budget 2027.
What I do see consistently is a different problem. Our clients struggle to find fund managers who are both capable and reliable. That is the actual bottleneck at the coalface, and it is a better argument for the Investment Management Track than anything in the official announcement. There is genuine unmet demand here, not merely a prestige contest between financial centres.
It carries a caveat I would not want lost. Widening the gate does not vet the people walking through it. A more permissive salary test admits more candidates. It does not tell you which of them can actually run money. That assessment stays with the client, and it does not get easier because immigration policy loosened.
What to do between now and Budget 2027
Prepare thoroughly. Commit to nothing irreversible.
Reviewing your fee arrangements, carry documentation and employment contracts now is sensible and costs little. Auditing your local headcount and business spending against the current thresholds is sensible, particularly if you are inside the grace period and have a 2027 cliff ahead of you. Working out which of your senior people would clear a pass under both the existing and any revised criteria is sensible.
Restructuring your compensation arrangements today on an assumption about what Budget 2027 will say is not. If the final rules differ from the guess, you will have bought cost, disruption and possibly a tax exposure in exchange for nothing.
Where we fit, and where we do not
I will be precise about this, because our industry is full of firms claiming to do everything.
We do not draft your 13O application and we are not a fund tax boutique. What our group does is build and operate the substance layer that any application depends on. Singapore Employment Agency handles the work passes that bring your investment professionals into Singapore. Raffles Corporate Services handles the entity, the corporate secretarial and statutory compliance, the payroll that pays those professionals, and the accounting and tax filings that evidence your local business spending. Legal support can be recommended if necessary.
Read the substance conditions again and you will notice they are almost entirely a description of operational reality rather than clever structuring. People here. Money spent here. Records that prove both.
Where the work runs into fund tax structuring or MAS licensing, we say so, and we work alongside specialists who do that properly. What we take responsibility for is that the pieces arrive in the right order, which is the failure mode I described above and the one nobody else is watching.
Over to you
Two questions, and I would genuinely like to read the answers rather than simply collect engagement.
First, for those actually making the decision: does Hong Kong’s head start change your Singapore calculus, or is tax treatment secondary to the question of where you can realistically build and keep a team?
Second, and I think this one is harder: is a bespoke immigration lane for one well-remunerated sector the right call at a moment when ordinary employers are absorbing tighter COMPASS benchmarks? I have given my answer above. I am not certain it is the only defensible one.
Tell me in the comments. If you would rather discuss a specific situation privately, please get in touch with the team at [email protected].
Requirements may change, so always check the latest guidance from MAS, IRAS, MOM or ACRA, or consult a professional adviser.
Disclaimer: This does not constitute legal, tax or immigration advice. If you require such advice, please engage a qualified professional.