Singapore MAS 2026 Asset Management Reforms: Tax Exemptions, Hedge Fund Investments, and ONE Pass
- Roger Pay
- 10 hours ago
- 6 min read
Singapore MAS 2026 Asset Management Reforms: Tax Exemptions, Hedge Fund Investments, and ONE Pass
On August 19, 2026, the Monetary Authority of Singapore (MAS) announced three key strategic measures to strengthen Singapore's position as Asia's premier asset management hub. The framework targets tax exemptions on profit-related returns (carried interest), an MAS Hedge Fund Investment Programme, and a dedicated Investment Management Track under the Overseas Networks & Expertise (ONE) Pass.
Executive Summary: Key Reforms At A Glance
Singapore's asset management sector accounts for ~15% of the financial sector’s total output, 13% of its employment, and manages close to S$7 trillion in AUM. To maintain market share against competing financial jurisdictions like Hong Kong and Dubai, the MAS—in collaboration with the Ministry of Finance (MOF) and Ministry of Manpower (MOM)—introduced three targeted incentives:
Initiative | Primary Target | Expected Implementation / Timeline | Key Commercial Benefit |
|---|---|---|---|
Tax Exemption on Profit-Related Returns | Fund Managers & Investment Professionals | Year of Assessment (YA) 2027 (Details at Budget 2027) | Exemption from tax on performance-linked profit returns (e.g., carried interest) for qualifying funds. |
MAS Hedge Fund Investment Programme | Global & Regional Hedge Fund Managers | Immediate / Phased roll-out | Direct seed and co-investment capital allocated by MAS to fund managers based in Singapore. |
ONE Pass (Investment Management Track) | C-Suite Leaders, Senior Portfolio Managers, Top Talent | Upcoming policy alignment | Modernized salary benchmark criteria accounting for performance fees and carried interest. |
Breakdown of Key Initiatives
1. Tax Exemption for Profit-Related Returns (Carried Interest)
What it covers: The proposed tax exemption targets performance-linked payouts (such as carried interest or profit-sharing arrangements) earned by fund managers and investment professionals when managing qualifying funds.
Exclusions: The exemption does not apply to standard monthly base salaries, annual fixed bonuses, or routine corporate remuneration in the ordinary course of business.
Qualifying Conditions: Participating fund entities must maintain economic substance in Singapore, including meeting local spending thresholds and employing minimum counts of Singapore-based investment professionals.
2. MAS Hedge Fund Investment Programme
Purpose: Designed to anchor emerging and established hedge fund managers, prime brokerages, and support services within the Singapore ecosystem.
Mechanism: MAS will allocate capital to invest directly with hedge fund managers that commit to building or expanding their operational presence and investment teams in Singapore.
Ecosystem Impact: Expected to stimulate auxiliary demand for local prime brokerages, fund administrators, compliance consultancies, and legal advisors.
3. Overseas Networks & Expertise (ONE) Pass: Investment Management Track
Flexibility for Talent: Developed alongside the Ministry of Manpower (MOM), this track adjusts eligibility criteria for senior investment executives.
Compensation Realignment: Recognizing that investment talent compensation structures rely heavily on fund outcomes rather than fixed monthly salaries, the updated framework factors variable returns into the ONE Pass salary thresholds.
Action Items for Asset Managers and Fund Operators
Fund managers operating in or relocating to Singapore should prepare by taking the following steps:
Review Remuneration Structures: Evaluate existing fee arrangements, fund offering documents, and employment contracts to ensure profit-sharing mechanisms align with the upcoming YA 2027 tax exemption guidelines.
Audit Economic Substance Requirements: Review local headcount and operational expenditure to ensure compliance with qualifying conditions under Sections 13O and 13U tax incentive schemes.
Evaluate Talent & Work Pass Eligibility: Assess senior team members against the revised ONE Pass criteria to facilitate long-term talent retention.
Frequently Asked Questions
What was announced by MAS on August 19, 2026?
The Monetary Authority of Singapore announced three policy updates: a tax exemption for profit-related returns, a new Hedge Fund Investment Programme, and an Investment Management Track under the ONE Pass framework.
When do the tax exemptions take effect?
The tax exemption on profit-related returns is slated to take effect from Year of Assessment (YA) 2027, with detailed technical guidelines scheduled for release in Budget 2027.
Does the tax exemption apply to employee base salaries?
No. Standard salaries, fixed bonuses, and traditional employment remuneration remain subject to regular prevailing tax rates.
How Bestar Singapore Helps You Capitalize on MAS Asset Management Reforms
Singapore MAS 2026 Asset Management Reforms: Tax Exemptions, Hedge Fund Investments, and ONE Pass
The Monetary Authority of Singapore (MAS) announced three landmark measures to enhance Singapore’s standing as Asia’s leading asset management hub. The updates—targeting tax exemptions on profit-related returns (carried interest), a new Hedge Fund Investment Programme, and a dedicated Investment Management Track under the ONE Pass—create immediate opportunities for fund managers, family offices, and alternative investment firms.
Navigating these regulatory shifts requires precise tax structuring, corporate secretarial execution, and licensing compliance. Bestar provides the end-to-end professional support needed to optimize your operational framework for these new MAS policies.
Key MAS Reforms & How Bestar Supports Your Growth
MAS Policy Measure | Commercial Impact | Bestar’s Advisory & Compliance Solution |
|---|---|---|
Tax Exemption on Profit-Related Returns (YA 2027) | Exempts performance-linked payouts (carried interest) from income tax for qualifying funds under Sections 13O/13U. | Restructures fund management agreements, fee models, and local substance footprints to satisfy upcoming Budget 2027 eligibility requirements. |
MAS Hedge Fund Investment Programme | Deploys institutional co-investment capital to hedge funds expanding local desks and operations. | Handles entity incorporation, Capital Markets Services (CMS) licensing applications, and regulatory readiness reviews for MAS selection. |
ONE Pass (Investment Management Track) | Factors performance-linked remuneration into eligibility thresholds for 5-year flexible work passes. | Conducts compensation evaluations and manages high-net-worth/C-suite immigration filings via Singapore’s Ministry of Manpower (MOM) framework. |
1. Structuring Carried Interest & Fund Tax Schemes
The proposed tax exemption for carried interest applies specifically to qualifying funds operating under Singapore Income Tax Act schemes—such as Section 13O (Singapore Resident Fund Scheme) and Section 13U (Enhanced Tier Fund Scheme). To qualify, managers must meet local spending and investment headcount thresholds.
How Bestar assists:
Fund Tax Structuring: Prepares your corporate and fund vehicles to ensure performance returns are contractually separated from standard employment remuneration.
Economic Substance Audit: Monitors local business expenditure (LBE) and local headcount to maintain compliance with IRAS and MAS rules.
Exemption Readiness: Audits existing Section 13O and 13U structures ahead of final Budget 2027 implementation guidelines.
2. Licensing & Operational Setup for the Hedge Fund Programme
To access capital under the MAS Hedge Fund Investment Programme, managers must establish a robust local footprint, including compliance officers, risk managers, and investment professionals.
How Bestar assists:
Licensing & Registration: Guides firms through acquiring a Capital Markets Services (CMS) License or registering as a Registered Fund Management Company (RFMC) with MAS.
Corporate Secretarial & Onboarding: Sets up Variable Capital Companies (VCCs), private limited holdings, or LP structures with appropriate governance and statutory filings.
Accounting & Tax Compliance: Provides full-scope fund accounting, tax filing, and annual auditing services to meet institutional standards.
3. Senior Executive Mobility & ONE Pass Processing
The ONE Pass Investment Management Track accommodates established compensation models where performance fees form a substantial share of total earnings.
How Bestar assists:
Executive Compensation Verification: Prepares certified documentation demonstrating investment performance and variable earnings to meet MOM salary thresholds.
Work Pass Applications: Manages full visa filing for senior portfolio managers, C-suite leaders, and key investment staff.
Frequently Asked Questions
How does Bestar help current Section 13O/13U fund managers prepare for YA 2027?
Bestar reviews your existing fee arrangements and contractual distribution models to confirm that performance-linked payouts meet the expected MAS guidelines for carried interest exemptions.
Can Bestar assist foreign hedge fund managers setting up in Singapore for the first time?
Yes. Bestar handles the entire lifecycle—from entity incorporation and VCC setup to MAS licensing, office structuring, local director appointments, and tax incentive applications.
Does the proposed tax exemption cover regular employee salaries?
No. The MAS tax exemption applies strictly to profit-related returns and carried interest. Base salaries and standard bonuses remain subject to standard progressive personal income tax rates.
Ready to optimize your fund structure and capitalize on the latest MAS reforms? Contact Bestar today to schedule a confidential consultation with our Singapore asset management advisory team.
Channel | Contact Details |
|---|---|
Direct Contact / WhatsApp | |
Office Location | 23 New Industrial Road, Singapore |
Website |
Why Partner with Bestar?
End-to-End Asset Management Setup: Seamless handling of entity incorporation, VCC administration, and MAS licensing (CMS / LFMC).
Tax Scheme Optimization: Expertise in structuring Section 13O and 13U funds to capture upcoming YA 2027 carried interest tax exemptions.
C-Suite Mobility: Complete management of ONE Pass and employment visa applications for senior investment personnel.
Competitor Quote Matching: Transparent, highly competitive fee structures for all corporate secretarial, tax, and auditing services.
Take immediate action on your Singapore fund setup:
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