Singapore plans to exempt fund managers' carried interest from tax starting 2027, matching a Hong Kong move from earlier this year, and the change may reach further into family-office structures than either government has said outright.

TL;DR

  • MAS and Singapore's Ministry of Finance plan to exempt profit-related returns (carried interest) earned by managers of qualifying funds, expected to take effect from the Year of Assessment 2027.
  • Because qualifying funds include vehicles under Singapore's 13O and 13U single-family-office tax schemes, the exemption could touch compensation inside family-office investment teams, not just third-party fund managers.
  • The move follows Hong Kong's June 2026 Inland Revenue (Amendment) Bill, which expanded its own carried-interest and fund tax breaks, intensifying a multi-year contest for Asia's fund managers and family offices.

What exactly did MAS announce on 19 August?

The Monetary Authority of Singapore said its asset management industry accounts for roughly 15% of the financial sector's output and 13% of its employment, having grown 7.5% a year on average over the past five years to almost S$7 trillion under management. To keep that growth going, MAS and the Ministry of Finance plan a tax exemption for profit-related returns, essentially carried interest, earned from providing fund management services to qualifying funds. Those funds must already meet economic substance requirements, including minimum headcount, and the exemption is expected to apply from the Year of Assessment 2027, with further detail due at Budget 2027.

Why does this matter for family offices, not just fund managers?

According to law-firm commentary on the announcement, "qualifying funds" refers to vehicles that already qualify for tax exemption under Sections 13D, 13O, 13OA, 13U and 13V of Singapore's Income Tax Act. Sections 13O and 13U are the two schemes most single-family offices in Singapore use to structure their investment vehicles. That overlap suggests the new exemption is not limited to third-party private equity and hedge fund managers: it could extend to performance-linked pay for investment staff employed directly by a family office, provided the office's fund vehicle meets the same substance tests.

How does this compare with Hong Kong's move?

Hong Kong got there first. It gazetted the Inland Revenue (Amendment) Bill 2026 in June, expanding tax breaks for private funds, family offices and carried interest, and widening what was already a fairly generous regime for performance-linked pay. Commentary since Singapore's announcement has been split on which city now has the edge: some analysts argue Hong Kong's carried-interest treatment is closer to a full exemption, while Singapore is pairing its narrower tax move with new visa and talent measures, including an Investment Management Track under its Overseas Networks and Expertise Pass framework, aimed at recognising performance-linked compensation as a legitimate part of an investment professional's pay when assessing work-pass eligibility.

What does this mean for APAC investors and allocators?

For limited partners and family offices deciding where to base a fund vehicle or a single-family office, tax treatment of carried interest is one input among many, alongside talent access, regulatory certainty and connectivity to deal flow. A cheaper tax position for GPs does not automatically lower management fees or improve fund performance for LPs, but it can affect where managers choose to domicile, which in turn shapes which products and deal access are available locally. The timing also lands as Asia-regional private markets fundraising is still recovering from a 2025 slump, so both hubs have an incentive to be seen as the more attractive base as capital starts flowing back.

What's still unclear?

MAS has not published the legislative text or the detailed eligibility criteria for the exemption, and full details are not expected until Budget 2027. It is not yet confirmed whether family-office investment staff will be treated identically to third-party fund managers, or whether additional substance or headcount thresholds will apply specifically to family-office vehicles. Hong Kong's capital-attraction push has run alongside other channels this year, including its New Capital Investment Entrant Scheme, which is itself a narrower and more conditional route into the city than headline coverage sometimes suggests. Singapore, for its part, has recently seen large single-ticket mandates such as Partners Group's US$1 billion evergreen allocation from an Asia-based institutional investor, a reminder that fund domicile decisions often follow existing relationships as much as tax policy.

Frequently Asked Questions

What is a profit-related return in this context? It is Singapore's term for carried interest, the share of investment profits paid to fund managers and investment professionals when a fund performs well, on top of fixed management fees.

Does this affect family offices structured under 13O or 13U? It may. Those sections are named among the qualifying fund categories, so a single-family office's fund vehicle could potentially benefit, though MAS has not confirmed how the exemption applies in practice to family-office structures specifically.

When does the tax exemption take effect? MAS expects it to apply from the Year of Assessment 2027, with full legislative and administrative detail to be announced at Singapore's Budget 2027.

Sources and Method

This article is based on MAS's official media release, "MAS Introduces Measures to Strengthen Singapore's Competitiveness as a Leading Asset Management Hub," published 19 August 2026, cross-checked against Reuters and Bloomberg coverage of the same announcement and its framing as a response to Hong Kong's Inland Revenue (Amendment) Bill 2026. Details on Hong Kong's bill are as reported by Singapore Law Watch and The Business Times. Specific eligibility criteria for family-office vehicles are not yet confirmed and are noted as such above.