Monetary Authority of Singapore in talks to cut taxes for fund managers

Singapore wants more of the world’s money, and it is willing to negotiate on taxes to get it. The Monetary Authority of Singapore is in active discussions with investment firms about reducing the tax burden on fund managers, a move that fits neatly into the city-state’s broader campaign to pull capital away from rival financial centers.

What Singapore is actually offering

Singapore revised its flagship fund tax incentive schemes, specifically the frameworks known as Sections 13O and 13U, with updated eligibility criteria that took effect in 2025. These schemes allow qualifying funds to enjoy tax exemptions on specified income, and the revised criteria tightened the rules around which funds managed by Singapore-based entities can qualify.

The Financial Sector Incentive scheme, known as the FSI, also received updated parameters alongside the 13O and 13U changes. The FSI is the broader umbrella that covers tax concessions across banking, fund management, and related financial services.

Budget 2026 announced a 40% corporate income tax rebate for active companies, a measure that applies across sectors but carries obvious appeal for fund management firms with significant Singapore-based operational footprints.

The same budget allocated a fresh S$1.5 billion top-up to MAS’s Equity Market Development Programme, known as the EQDP. That program is specifically designed to deepen Singapore’s local equity markets, addressing a long-standing criticism that the Singapore Exchange lacks the liquidity and breadth of Hong Kong or New York.

What this means for investors and the broader market

The S$1.5 billion EQDP allocation is worth watching specifically. If MAS successfully deploys that capital to improve Singapore Exchange liquidity, it creates a self-reinforcing cycle: deeper markets attract more institutional managers, who bring more capital, which deepens the markets further.

The near-term risk is execution. The revised 13O and 13U criteria already showed that MAS is willing to tighten conditions alongside expanding benefits. Firms entering these discussions should not assume the outcome is a blanket reduction. The more likely result is a targeted set of concessions designed to attract specific types of managers, particularly those running larger, more institutionally oriented strategies, while maintaining the credibility of Singapore’s overall tax framework.

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