Singapore announced three measures to bolster its position as an asset-management hub on Aug 19, such as the introduction of a proposed tax exemption for returns relating to fund profits, a new hedge fund investment program and a new Investment Management Track under the Overseas Networks & Expertise, or ONE Pass, framework.
The measures are designed to “capture business operations, capital deployment and investment talent” in Singapore, the Monetary Authority of Singapore said. As Hong Kong pushes forward with new legislation on tax concessions for funds and carried interest, the announcement follows.
MAS and Singapore’s Ministry of Finance plan to introduce the tax exemption from the Year of Assessment 2027, with further details expected in Budget 2027. The hedge fund investment program and Investment Management Track are also being developed.
Singapore Unveils New Investment Incentives
The proposed tax exemption would cover qualifying profit-related returns arising from fund-management services provided to qualifying funds. MAS said the exemption is intended to reflect commercial fund-management arrangements and strengthen Singapore’s competitiveness.
The measure is separate from ordinary salaries, bonuses and other employee remuneration. Further details, including the precise application of the exemption, are expected at Budget 2027.
Singapore will also establish a Hedge Fund Investment Program to invest with hedge fund managers that are committed to establishing or expanding their presence in the city-state.
MAS said the program is intended to attract hedge fund managers and to develop the wider ecosystem, including ancillary service providers and prime brokerages.
The third measure is a proposed Investment Management Track under the ONE Pass framework. MAS and the Ministry of Manpower plan to refine how compensation is assessed for senior investment professionals, potentially taking investment-performance-linked returns into account alongside fixed salary.
The ONE Pass is a five-year work pass that allows eligible holders to work for multiple companies or establish businesses in Singapore.
Hong Kong’s Tax Changes Set the Competitive Backdrop
Hong Kong has been advancing its own tax changes for the asset-management industry.
The Hong Kong government introduced the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 into the Legislative Council in June. The bill would expand preferential tax treatment for carried interest and broaden the types of funds covered by the regime.
The bill remains under legislative scrutiny. A Bills Committee was still examining its provisions as of July 30, while the Hong Kong government said on Aug. 12 that it targeted resuming the second-reading debate during the second half of 2026.
Hong Kong’s Financial Services and the Treasury Bureau has also clarified that businesses trading or holding assets with proprietary capital for their own account do not fall within the bill’s definition of a fund. As a result, remuneration distributed by proprietary trading businesses would not qualify for the proposed concessions.
The clarification is relevant to firms such as proprietary trading companies because the proposed regime is focused on eligible carried interest linked to investment-management services provided to qualifying funds.
Industry Pressure Drives Singapore’s Response
The policy changes follow months of engagement between Singapore’s authorities and the alternative-investment industry.
The Alternative Investment Management Association, a global trade group representing alternative investment managers, submitted feedback to MAS in July on Hong Kong’s tax changes and their implications for Singapore’s asset-management industry.
AIMA urged a timely response and said individual taxation had become an important consideration for mobile investment professionals.
After MAS announced its measures, AIMA welcomed the package. Kher Sheng Lee, the association’s managing director and co-head of Asia-Pacific, said MAS had responded quickly to industry concerns.
MAS Deputy Chairman Chee Hong Tat said, “Singapore’s asset management industry is a key growth engine for the financial sector, accounting for around 15% of the sector’s output and 13% of its employment. My colleagues and I will do what it takes to maintain and uphold the competitiveness of our financial services industry.”
“The competitive pressure is no longer theoretical,” the trade group said, citing an anonymized account from a leading global manager whose Singapore headcount had declined over recent years while its Hong Kong presence grew many multiples over the same period, “a reversal of the position of only a few years ago, when Singapore was its regional centre of gravity.”
The industry pressure comes despite continued growth in Singapore’s asset-management sector.
Singapore, Hong Kong Face Growing Competition
Singapore’s asset-management industry recorded almost S$7 trillion in assets under management in 2025, according to MAS. The industry grew at an average annual rate of 7.5% over the previous five years. MAS said the sector accounted for about 15% of Singapore’s financial-sector output and 13% of employment.
The 2025 Singapore Asset Management Survey reported that assets under management rose 10% to S$6.7 trillion. Net inflows increased 29% from the previous year to S$376 billion, according to figures published by MAS.
The Securities and Futures Commission said total assets under management across its asset and wealth-management survey rose 20% in 2025 to a record HK$42.2 trillion, or about US$5.4 trillion.
The increase was driven in part by a 193% rise in net fund inflows to HK$2.1 trillion. The SFC said the asset-management and fund-advisory segment grew 19% to HK$31 trillion.
The figures are not directly comparable because Singapore’s S$6.7 trillion figure covers its asset-management industry, while Hong Kong’s HK$42.2 trillion figure covers a broader asset and wealth-management category that includes asset management, fund advisory, private banking and private wealth management.
Competition Intensifies for Global Fund Managers
The competition is increasingly focused on three areas: the tax treatment of investment returns, access to global investment talent and the ability to attract managers that bring capital and related financial services with them.
Singapore’s new package addresses all three areas. The proposed tax exemption targets the economics of fund-management arrangements, the hedge fund program provides a potential source of capital for managers establishing or expanding in Singapore, and the ONE Pass initiative targets senior investment professionals.
Hong Kong’s government, meanwhile, has said its tax changes are intended to attract more funds and family offices, increase the amount of global capital managed in the city and expand local fund-management and related professional-services activity.
For now, neither side has completed the latest phase of its reforms. Singapore’s tax exemption still requires further details at Budget 2027, while Hong Kong’s carried-interest changes remain subject to the legislative process.
The next stage of the rivalry will therefore depend on how the proposed measures are implemented and whether fund managers respond by expanding operations, hiring investment professionals or allocating more capital to either financial center.
