Singapore has opened a new front in Asia’s battle for global investment capital, unveiling a package of tax, immigration and investment incentives designed to keep the city-state competitive as Hong Kong aggressively courts fund managers, hedge funds and wealthy investors.
The Monetary Authority of Singapore announced on August 19 that it plans to introduce a tax exemption for qualifying profit-related returns earned from providing fund-management services, establish a new Hedge Fund Investment Programme, and create a dedicated Investment Management Track under the Overseas Networks & Expertise Pass, or ONE Pass.
The measures are expected to take effect from Year of Assessment 2027, with important details—including eligibility rules and the exact tax treatment—to be released as part of Singapore’s 2027 Budget.
And while officials have avoided describing the move as a direct financial war with Hong Kong, the timing is difficult to ignore.
Singapore Is Targeting the Money Fund Managers Make When Investments Perform
The centrepiece of the package is a planned exemption covering certain profit-related returns received by companies, partnerships or individuals for providing fund-management services to qualifying funds.
That distinction matters.
The proposal does not mean salaries, normal bonuses or all profits earned by fund managers suddenly become tax-free. According to the details released so far, ordinary employee compensation would remain outside the exemption. Instead, the measure is aimed at contractual returns linked to a fund’s profits—structures commonly associated with carried interest or other performance-linked arrangements.
Qualifying funds will also need to satisfy Singapore’s existing substance requirements, including minimum headcount requirements, reinforcing the government’s goal of attracting genuine business activity rather than simply providing a low-tax booking location.
That makes the policy much more strategically targeted than the phrase “tax-free profits” might suggest.
Singapore is effectively telling global asset managers: if you bring real operations, people and investment activity here, the economics of staying could become substantially more attractive.
Hong Kong Put Pressure on Singapore First
The announcement comes as Hong Kong moves to expand its own tax concessions for funds, family offices and carried interest.
Hong Kong gazetted the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 on June 12. The legislation received its first reading on June 24 and was still undergoing legislative scrutiny as of late July.
Hong Kong authorities have said the bill is intended to broaden preferential tax treatment for eligible carried interest beyond traditional private-equity investments to other qualifying fund profits.
That raised concerns within Singapore’s fund-management sector that the tax gap between the two Asian financial centres could become large enough to influence decisions over where firms place their highest-paid investment professionals.
Reuters reported that the Alternative Investment Management Association had warned Singapore authorities about the competitive implications of Hong Kong’s proposals.
The Financial Times likewise reported that the policy competition had become serious enough for some market participants to consider whether senior personnel could be shifted between the two cities.
Singapore’s answer arrived weeks later.
The ONE Pass Change Could Be Just as Important as the Tax Break
The second major move involves Singapore’s ONE Pass, the five-year work pass aimed at exceptionally high-earning or accomplished professionals.
Under the existing framework, ONE Pass holders already enjoy unusual flexibility compared with ordinary work-pass holders. They can work for multiple companies, establish businesses and move between qualifying professional activities without being tied in the same way to a single sponsoring employer.
By contrast, most Singapore work-pass holders are required to work only for their designated employer.
So Singapore is not creating multi-employer rights from scratch.
What MAS and the Ministry of Manpower are proposing is a new Investment Management Track designed specifically to attract top global investment leaders and senior asset-management professionals.
The current ONE Pass salary route generally requires applicants to demonstrate fixed monthly earnings of at least S$30,000, although separate pathways exist for people with outstanding achievements in areas such as academia, research, sports, arts and culture.
The problem for hedge-fund managers and other investment professionals is that their compensation can look very different.
A significant portion may come from performance-linked returns rather than a large fixed monthly salary.
Singapore is therefore considering a framework that better recognises investment-performance-related compensation when determining eligibility for the new track.
That could make ONE Pass access substantially more practical for some of the world’s highest-performing portfolio managers.
Singapore Is Also Willing to Put Its Own Capital Into the Fight
The third measure may receive less public attention, but it could have significant industry consequences.
MAS plans to establish a Hedge Fund Investment Programme under which it would invest with hedge-fund managers that commit to establishing or expanding operations in Singapore.
That means Singapore is not relying solely on tax incentives or immigration policy.
It is potentially using investment capital itself as an anchor.
The objective is broader than attracting individual hedge funds. Authorities hope a larger concentration of managers could support an ecosystem of prime brokers, technology firms, lawyers, administrators, risk specialists and other professional-service providers surrounding the industry.
In other words, Singapore wants more than funds registered in the country.
It wants the decision-makers, capital, infrastructure and high-value jobs surrounding those funds.
Nearly S$7 Trillion Is Already Managed From Singapore
Singapore is defending a sector that has become increasingly important to its financial economy.
MAS says asset management represents roughly 15% of financial-sector output and 13% of employment.
The industry employs close to 25,000 people, with around 80% of those positions held by locals, according to figures cited in reporting on the MAS announcement.
Assets under management reached approximately S$6.7 trillion at the end of 2025, up 10.1% from the previous year, while net inflows climbed to about S$376 billion.
Over the previous five years, the industry expanded at an average annual rate of approximately 7.5%.
Those numbers explain why Singapore is moving before it sees large-scale defections.
Losing even a relatively small group of elite hedge-fund managers could eventually mean losing investment teams, trading activity, mandates, service firms and billions of dollars of assets with them.
Is This Really Singapore Versus Hong Kong?
Singapore officials are publicly resisting that framing.
Chee Hong Tat, Singapore’s Minister for National Development and deputy chairman of MAS, said competition with Hong Kong should not be viewed as a zero-sum game, arguing that Asia is large enough to support the growth of both financial centres.
That may be diplomatically true.
Commercially, however, investment firms still have to decide where to place their portfolio managers, headquarters, trading desks and capital.
And Hong Kong and Singapore increasingly compete for many of the same clients.
Hong Kong brings proximity to China, deep capital markets and a resurgent IPO ecosystem.
Singapore offers political and regulatory stability, strong links across Southeast Asia, a rapidly expanding family-office sector and an established reputation as a global wealth-management centre.
Now both cities are sharpening one of the most powerful weapons available to a financial hub: the amount of money elite investors can keep after tax—and how easily those investors can live and work there.
That competition may become one of the defining financial stories in Asia over the next several years.
Because the real prize is not simply attracting another hedge fund.
It is deciding where the next generation of Asian capital gets managed.
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