Singapore Weighs Deeper Tax Relief for Fund Managers as Hong Kong Sharpens Its Pitch

Regulators are reportedly looking at cutting taxes further for fund managers operating out of Singapore, a move aimed squarely at keeping talent and mandates from drifting toward Hong Kong.

Singapore’s financial regulator is considering further tax relief for fund managers based in the country, according to reporting by the Financial Times. The move would build on an existing concessionary tax scheme and is widely read as a direct response to Hong Kong’s own push to lure asset managers with a more generous tax offer on carried interest.

The scheme in question is the Financial Sector Incentive for Fund Management, which already lets qualifying fund managers pay tax on their fee income at a concessionary rate of 10 percent, well below Singapore’s standard corporate tax rate of 17 percent. The Monetary Authority of Singapore is now said to be examining whether that rate can be pushed lower still, with any savings expected to flow through to the compensation of the portfolio managers and investment professionals actually running the money.

Hong Kong’s Counteroffer

The pressure on Singapore is coming from a specific proposal in Hong Kong, which is moving to exempt carried interest from tax for most alternative asset managers. Carried interest is the share of investment profits that fund managers earn on top of their management fees, and for many senior professionals in private equity, venture capital, and hedge funds, it makes up the bulk of their annual pay. A full exemption on that income would be a meaningful draw for anyone weighing where to base their next fund or their next role.

Hong Kong has not stopped at tax. The city has also eased rules for setting up family offices, opened the door to cryptocurrency related activity, and floated looser rules for mutual funds, all part of a broader effort to present itself as the more accommodating of the two hubs.

What Prompted the Review

According to the report, fund executives have already warned Singapore regulators that Hong Kong’s carried interest proposal is likely to prompt some firms to shift staff and operations across the strait. That kind of warning tends to get attention quickly, since asset management talent is mobile, and a firm’s investment team can relocate far faster than the fund structures and licenses built around them.

The comparison below sets out how the two regimes currently stack up, based on what has been proposed or confirmed so far.

What This Means for Fund Managers

For managers already established in Singapore, none of this changes anything overnight. Existing licenses, fund structures, and tax positions remain in place, and any change to the Financial Sector Incentive scheme would need to go through the usual policy process before taking effect. The signal, however, is clear. Singapore is not waiting to see how much ground Hong Kong gains before responding, it is trying to move at the same time.

For managers currently deciding where to locate a new fund, a new team, or a next fund launch, the two hubs are edging closer together on paper, which puts more weight on the other factors that separate them, including regulatory predictability, the depth of local fund administration and legal talent, and how straightforward it is to actually operate a fund day to day once it is set up.

What to Watch Next

• Whether MAS confirms a specific new rate for the Financial Sector Incentive for Fund Management scheme, and when it would take effect.
• How Hong Kong’s carried interest exemption progresses through its own legislative process, and how broad the final eligibility criteria turn out to be.
• Whether either hub pairs its tax changes with additional non tax measures, given that talent decisions rarely come down to tax alone.

This article draws on public reporting regarding proposed and pending tax measures in Singapore and Hong Kong. Details remain subject to confirmation by the relevant authorities and may change. This article is for general information only and does not constitute tax or legal advice.