Singapore is introducing a new package of tax, investment and immigration incentives for the asset-management industry as it seeks to defend its position as one of Asia’s leading financial centres.
The Monetary Authority of Singapore (MAS) announced plans to remove tax on profits earned by investment professionals from fund-management services. The move comes as Singapore faces growing competition from Hong Kong, which is introducing major tax incentives aimed at attracting fund managers and highly paid investment professionals.
The measures are designed to make Singapore more attractive to global asset managers and prevent senior investment professionals from moving to rival financial centres. The Alternative Investment Management Association has warned that some hedge funds and private equity firms based in Singapore were considering relocating senior staff to Hong Kong because of its incoming tax reforms.
Singapore is also planning an investment programme that will provide capital to hedge funds operating in the city-state. In addition, authorities intend to make it easier for senior fund-management professionals to obtain work visas, giving international firms greater flexibility when recruiting global talent.
The tax changes could potentially have a wider reach than Hong Kong’s reforms, which focus largely on tax-free carried interest. Carried interest is the share of investment profits typically paid to fund managers when returns exceed an agreed threshold.
Singapore’s response reflects the increasingly intense competition between major financial hubs including Singapore, Hong Kong, London, New York and Dubai. As investment professionals become more mobile, tax rates, immigration rules, technology access and quality of life are increasingly important factors in decisions about where financial firms locate their operations.
The financial sector is particularly important to Singapore’s economy. The country’s fund-management industry has expanded at an average annual rate of 7.5 per cent over the past five years, with assets under management approaching S$7 trillion. The industry accounts for a significant share of Singapore’s financial-services activity and employment.
Singapore is also highlighting another potential advantage: access to artificial intelligence models from both the US and China. Officials and industry executives believe this could benefit investment firms, particularly quantitative hedge funds and other businesses that rely heavily on advanced AI technologies.
The latest incentives demonstrate how financial centres are increasingly competing not only through traditional factors such as regulation and market access, but also through taxation, technology and access to skilled workers.
Further details of Singapore’s proposed tax measures, including their precise scope and cost, are expected to be provided in the country’s 2027 budget.
Singapore’s authorities have stressed that the competition with Hong Kong should not necessarily be viewed as a zero-sum contest. However, the latest measures make clear that the city-state is determined to protect its position as a global hub for asset management and international capital.
As competition for financial talent intensifies, Singapore’s latest strategy could influence where investment firms choose to locate their teams, deploy capital and build their next generation of operations.
Reference: Financial Times, “Singapore unveils tax cuts for asset managers amid global talent tussle” (August 2026). Financial Times article
