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Setting up a Fund Management Company


Setting up a Fund Management Company | Bestar
Setting up a Fund Management Company | Bestar

Fund Management Company


A fund management company is a company that is responsible for managing the investment funds of its clients. These funds can be mutual funds, hedge funds, or other types of investment vehicles. The fund management company will typically employ a team of investment professionals who are responsible for making investment decisions on behalf of the fund's investors.


The specific responsibilities of a fund management company will vary depending on the type of fund it is managing. However, some common responsibilities include:

  • Developing and implementing investment strategies

  • Managing the day-to-day operations of the fund

  • Monitoring the performance of the fund's investments

  • Reporting to the fund's investors

  • Complying with regulatory requirements

The fund management company will typically charge a fee for its services. This fee can be a percentage of the fund's assets under management or a flat fee.


Here are some of the benefits of using a fund management company:

  • Professional investment management: Fund management companies employ experienced investment professionals who are responsible for making investment decisions on behalf of the fund's investors. This can save investors time and effort, as they do not have to do the research and analysis themselves.

  • Diversification: Fund management companies typically invest in a variety of assets, which can help to reduce risk. This is in contrast to individual investors, who may not have the resources to invest in a diversified portfolio.

  • Convenience: Fund management companies handle all of the day-to-day operations of the fund, such as trading securities and reporting to investors. This can be a great convenience for investors who do not have the time or expertise to manage their own investments.

However, there are also some risks associated with using a fund management company:

  • Fees: Fund management companies typically charge fees for their services. These fees can reduce the returns of the fund.

  • Conflicts of interest: Fund management companies may have conflicts of interest, such as when they also manage other funds that compete with the fund they are managing. This can potentially affect the investment decisions made on behalf of the fund.

  • Lack of transparency: Fund management companies may not be transparent about their investment strategies or fees. This can make it difficult for investors to assess the performance of the fund.

Overall, fund management companies can be a good option for investors who do not have the time or expertise to manage their own investments. However, it is important to carefully consider the fees, risks, and transparency of the fund management company before investing.


Setting up a Fund Management Company


Setting up a fund management company in Singapore requires the following steps:

  1. Obtain the necessary licenses and registrations. You will need to obtain a Capital Markets Services (CMS) license or registration from the Monetary Authority of Singapore (MAS) in order to conduct regulated fund management activities. The specific type of license or registration you need will depend on the type of fund you plan to manage and the type of investors you plan to target.

  2. Incorporate your company. You will need to incorporate your company as a private limited company in Singapore.

  3. Appoint directors and key personnel. You will need to appoint at least two directors and one CEO for your company. The directors and CEO must have the necessary experience and qualifications to manage a fund management company.

  4. Obtain professional indemnity insurance. You will need to obtain professional indemnity insurance to protect yourself and your company from financial losses arising from any negligence or errors in your investment decisions.

  5. Set up your office and systems. You will need to set up an office and acquire the necessary systems and software to manage your funds.

  6. Develop your investment strategy. You will need to develop an investment strategy that outlines your investment goals and objectives.

  7. Market your funds. You will need to market your funds to potential investors.

Here are some additional things to keep in mind when setting up a fund management company in Singapore:

  • The MAS has strict requirements for fund management companies. You will need to carefully review the MAS's regulations to ensure that your company complies with all applicable requirements.

  • The cost of setting up and running a fund management company in Singapore can be significant. You will need to carefully consider the costs involved before deciding to set up a fund management company.

  • The fund management industry in Singapore is highly competitive. You will need to develop a strong investment strategy and market your funds effectively in order to be successful.

Fund Management Licensing and Registration


Fund management activities in Singapore are regulated by the Monetary Authority of Singapore (MAS) under the Securities and Futures Act (SFA). Entities engaged in these activities must either hold a Capital Markets Services (CMS) license for fund management as a Licensed Fund Management Company (LFMC), be registered as a Registered Fund Management Company (RFMC) or be expressly exempted from holding a CMS licence.


The main difference between an LFMC and an RFMC is that an LFMC has more flexibility in the types of funds it can manage and the type of investors it can target. An RFMC is more restricted in the types of funds it can manage and the type of investors it can target.


To obtain a CMS license or registration, you must meet the following requirements:

  • Be a company incorporated in Singapore

  • Have at least two directors, at least one of whom must be a resident of Singapore

  • Appoint a fit and proper CEO

  • Have a minimum paid-up capital of S$1 million for an LFMC and S$500,000 for an RFMC

  • Obtain professional indemnity insurance

  • Comply with the MAS's regulations on fund management

The application process for a CMS license or registration can take several months. The MAS will assess your application and decide whether to grant you a license or registration.


If you are considering setting up a fund management company in Singapore, you should seek professional advice to ensure that you are complying with all applicable regulations.


Here are some additional resources that you may find helpful:

Why Set up a Fund Management Company in Singapore


There are many reasons why you might want to set up a fund management company in Singapore. Here are some of the most common reasons:

  • Strong regulatory environment: Singapore has a strong regulatory environment for fund management companies. The Monetary Authority of Singapore (MAS) is a well-respected regulator that enforces strict rules and regulations. This can give investors confidence in the fund management companies that are based in Singapore.

  • Favorable tax regime: Singapore has a favorable tax regime for fund management companies. There is no capital gains tax on investments made by funds, and there are also tax exemptions available for certain types of funds. This can help to reduce the cost of operating a fund management company in Singapore.

  • Strategic location: Singapore is a strategically located hub for fund management. It is located in the heart of Southeast Asia, which is a rapidly growing region with a large pool of potential investors. Singapore is also well-connected to the rest of the world, which makes it easy to raise capital and invest in global markets.

  • Abundant talent pool: Singapore has a well-educated and experienced workforce. This can be a valuable asset for fund management companies, as they need to hire talented investment professionals to manage their funds.

  • Easy to do business: Singapore is a relatively easy place to do business. The government has a pro-business environment and there are few bureaucratic hurdles to overcome. This can make it easier to set up and operate a fund management company in Singapore.

Of course, there are also some challenges to setting up a fund management company in Singapore. These include the high cost of living, the competitive nature of the industry, and the strict regulatory environment. However, the potential benefits of setting up a fund management company in Singapore can outweigh these challenges.


If you are considering setting up a fund management company, it is important to carefully weigh the pros and cons. You should also seek professional advice to ensure that you are complying with all applicable regulations.


How Bestar can Help


Bestar is a company formation and corporate services provider in Singapore. We can help you set up a fund management company in Singapore by providing the following services:

  • Company incorporation: Bestar can help you incorporate your fund management company as a private limited company in Singapore.

  • Directorship and secretarial services: Bestar can provide you with directorship and secretarial services for your fund management company. This includes providing the necessary directors and secretaries for your company, and ensuring that your company complies with all applicable corporate governance requirements.

  • Fund management license application: Bestar can help you apply for a fund management license from the Monetary Authority of Singapore (MAS). This includes providing you with the necessary documentation and assistance in completing the application process.

Bestar is a reputable company formation and corporate services provider in Singapore. We have a team of experienced professionals who can help you set up a fund management company in Singapore and comply with all applicable regulations.


Here are some of the benefits of using Bestar to set up a fund management company in Singapore:

  • We have a team of experienced professionals who can help you navigate the complex process of setting up a fund management company in Singapore.

  • We are familiar with the MAS's regulations on fund management and can help you ensure that your company complies with all applicable requirements.

  • We can provide you with a comprehensive range of services, from company incorporation to accounting.

  • We are a reputable company with a good track record of helping clients set up and manage fund management companies in Singapore.

If you are considering setting up a fund management company in Singapore, contact Bestar for a consultation. We can help you assess your needs and develop a plan to set up your company successfully.



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