Singapore has pledged to exempt a share of the profits earned by fund managers and investment professionals when they deliver strong returns for investors, in a direct response to Hong Kong’s push to lure hedge fund talent with its own carried interest tax breaks, according to the Monetary Authority of Singapore.
The MAS, alongside Singapore’s Ministry of Finance, said on Wednesday it would introduce the exemption for qualifying funds as part of a broader package of measures designed to keep the city state competitive as an asset management hub. Full details of the exemption are expected to be unveiled at Budget 2027, likely in February next year.
The regulator also announced a new program for hedge fund investments intended to anchor large managers in Singapore, though terms have not yet been disclosed.
The announcement follows months of lobbying by the hedge fund industry, which has warned that Singapore risks falling behind Hong Kong in the contest for regional headquarters.
Data cited by industry trackers illustrate the shift already under way. Hong Kong’s assets under management climbed 20% in 2025 to a record HKUSD 42.2 trillion, aided by a surge in net fund inflows.
Rents, visa processing times and waiting lists for international schools in Hong Kong have also improved, factors that industry executives say have helped draw expatriate staff back to the territory after years of pandemic-era restrictions and political uncertainty dented its appeal.
Singapore already offers fund tax exemptions under Sections 13D, 13O, and 13U of its Income Tax Act, primarily aimed at attracting family offices and requiring funds to be managed by Singapore-based managers.
Analysts said the timing of Wednesday’s announcement, ahead of firm details, was designed to give asset managers early visibility as they weigh where to base new regional operations.