New measures to take our asset management sector ahead

Asset Management

Extensions and enhancements

Existing tax incentive schemes for funds under Sections 13CA, 13R and 13X of the ITA, including the GST remission, have been extended till 31 December 2024. Key enhancements are:

  1. Removal of the “not 100%-owned by Singapore persons” condition.
  2. Enhancements to the list of “designated investments” and “specified income”.
  3. Section 13X scheme enhanced to:
    • Include co-investments of Special Purpose Vehicles (SPVs) of all legal forms and extension to beyond two-tier SPVs;
    • Include managed accounts; and
    • Extend the committed capital concession to debt and credit funds.

Taking fund management to the next level

Tax incentives for funds have been instrumental to growing Singapore’s asset under management over the years to $3.3 trillion in 2017. The Government recognises this, coupled with the competition in the region especially from Hong Kong, and hence the extensions and enhancements of existing tax incentives for funds managed by Singapore based fund managers. These changes also reflect a further liberalisation of the sector which allows fund managers to more efficiently access Singapore private clients, and encourages lending to Singapore businesses.

Enhanced flexibility, more global recognition

With the extensions and enhancements of the incentive schemes for funds and GST remission, Singapore asset managers can now manage funds and raise capital with greater flexibility. This is particularly so for credit and debt funds, as well as managed accounts (currently of significant interest to investors). These changes also complement the recent introduction of the Variable Capital Companies regime and inward re-domicilation of offshore funds, and will help drive Singapore’s vision to be an internationally recognised centre for asset management.

The Government has exceeded expectations

We welcome these enhancements and extensions. In our view, they support the continuing development of the asset management sector in Singapore. In fact, we believe that the enhancements in the 2019 Budget generally exceed the industry’s expectations and are timely. The enhancements benefitting debt and credit funds, as well as managed accounts, are indicative of the Government being aligned to market developments.

An exclusion list to help Singapore stay ahead

In view of the fast evolving financial landscape, it may not always be practical and feasible for the designated investment list to be expanded to keep up with latest financial innovations or global business developments. Any time lag may potentially cause tax uncertainty and unnecessary tax burdens for taxpayers. A more sustainable approach could be to modify the list into an “exclusion list” instead. This would help to achieve a “faster to market’ approach and help Singapore stay ahead of its key competitors in the asset management sector.


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