MAS updates funds tax incentive schemes

Section	Summary Details
Tax Incentive Schemes (S13D, S13O, S13U) – S13D covers income for non-resident investors; – S13O is for Singapore-resident companies; – S13U applies to both individual and corporate investors.	Tax exemptions for funds managed by Singapore-based managers under S13D, S13O, and S13U. It covers specified income (SI) from designated investments (DI). Includes GST remission and withholding tax exemption for qualifying funds. Schemes extended to 31 December 2029. As of that date, funds on S13D, S13O, and S13U retain exemptions if conditions are met. Non-compliance with economic criteria will affect the approved funds temporarily, where tax exemption will not be applicable for that basis year of non-compliance; MAS reserves the right to revoke the scheme eligibility for other non-compliance or any other serious offences.
S13O Scheme Revisions	Effective 1 January 2025, several updates to S13O apply to new and existing awards, including revised Assets Under Management (AUM), Local Business Spending (LBS), and Investment Professional (IP). Existing funds (awarded before 1 January 2025) have until FY 2027 to comply with revised economic criteria. The AUM must be at least S$5 million, calculated based on DI value. The LBS is tiered based on AUM in DI, ranging from S$200,000 to S$500,000. The restriction that S13O funds must be newly established has been removed, and the 30/50 rule has been waived for trusts and unit trusts under S13D. Changes in fund strategy no longer require MAS approval but funds should continue to update MAS of any change in its investment strategy.
S13OA Scheme	A new incentive from 1 January 2025, extending provisions under section 13O of ITA to funds structured as Limited Partnerships (LPs). New incentives apply to private equity (PE) and venture capital (VC) funds, which are often structured as LPs. Conditions are similar to those for S13O, applied at the partnership level. The General Partner (GP) GP is accountable for meeting all scheme conditions. The Economic Criteria are the same as S13O, including tiered LBS and minimum AUM of S$5 million in DI. The new scheme is designed for smaller PE and VC funds, enhancing Singapore’s appeal for LP structures.
S13U Scheme Revisions	Revised criteria for non-SFO funds/structures starting 2025: – 3 IPs required – AUM minimum requirement increased to S$50 million – Tiered LBS based on fund size The extra AUM/LBS requirement for each Special Purpose Vehicle (SPV) or trading feeder fund has been removed. Investment strategy changes no longer require MAS approval. Grace Period: Existing S13U funds have until FY ending in 2027 to comply with new economic criteria.
S13D Scheme Updates	For both SFO and non-SFO funds under S13D, revised economic criteria now require that funds be managed by a Singapore-based fund manager with at least one IP starting FY 2027 (YA 2028). The 30/50 rule is waived for trusts or unit trusts incentivised under S13D from YA 2025. – IP Requirement: Only 1 IP is required, with no salary threshold (unlike S13O and S13U). – 30/50 Rule waived to encourage cross-investments within S13D trusts and unit trusts. – Grace Period: SFO and non-SFO S13D funds have two years to meet new economic requirements.
Closed-End Fund Option	Optional “closed-end fund” treatment for non-SFO S13O, S13OA, or S13U starting in 2025. Incentives include AUM and LBS waivers post-5th/10th year and revocation at divestment phase or 20th year. Once chosen, funds cannot opt out of closed-end treatment.
SFO Funds	The amendments to the economic criteria in S13O and S13U do not apply to Single Family Office (SFO) funds as they were revised previously.
DI Clarification	Real estate investment funds, regardless of structure, are now included in the DI list, allowing them to qualify for specified income tax exemptions. This update broadens the scope, aligning with the intent to incentivise real estate collective investment vehicles. Foreign real estate funds, even if structured differently from Singapore-based entities, are included in the DI list.

Section

Summary Details

Tax Incentive Schemes (S13D, S13O, S13U)

– S13D covers income for non-resident investors;

– S13O is for Singapore-resident companies;

– S13U applies to both individual and corporate investors.

Tax exemptions for funds managed by Singapore-based managers under S13D, S13O, and S13U. It covers specified income (SI) from designated investments (DI). Includes GST remission and withholding tax exemption for qualifying funds.

Schemes extended to 31 December 2029. As of that date, funds on S13D, S13O, and S13U retain exemptions if conditions are met. Non-compliance with economic criteria will affect the approved funds temporarily, where tax exemption will not be applicable for that basis year of non-compliance; MAS reserves the right to revoke the scheme eligibility for other non-compliance or any other serious offences.

S13O Scheme Revisions

Effective 1 January 2025, several updates to S13O apply to new and existing awards, including revised Assets Under Management (AUM), Local Business Spending (LBS), and Investment Professional (IP). Existing funds (awarded before 1 January 2025) have until FY 2027 to comply with revised economic criteria.

The AUM must be at least S$5 million, calculated based on DI value. The LBS is tiered based on AUM in DI, ranging from S$200,000 to S$500,000. The restriction that S13O funds must be newly established has been removed, and the 30/50 rule has been waived for trusts and unit trusts under S13D.

Changes in fund strategy no longer require MAS approval but funds should continue to update MAS of any change in its investment strategy.

S13OA Scheme

A new incentive from 1 January 2025, extending provisions under section 13O of ITA to funds structured as Limited Partnerships (LPs). New incentives apply to private equity (PE) and venture capital (VC) funds, which are often structured as LPs. Conditions are similar to those for S13O, applied at the partnership level.

The General Partner (GP) GP is accountable for meeting all scheme conditions. The Economic Criteria are the same as S13O, including tiered LBS and minimum AUM of S$5 million in DI.

The new scheme is designed for smaller PE and VC funds, enhancing Singapore’s appeal for LP structures.

S13U Scheme Revisions

Revised criteria for non-SFO funds/structures starting 2025:

– 3 IPs required

– AUM minimum requirement increased to S$50 million

– Tiered LBS based on fund size

The extra AUM/LBS requirement for each Special Purpose Vehicle (SPV) or trading feeder fund has been removed. Investment strategy changes no longer require MAS approval.

Grace Period: Existing S13U funds have until FY ending in 2027 to comply with new economic criteria.

S13D Scheme Updates

For both SFO and non-SFO funds under S13D, revised economic criteria now require that funds be managed by a Singapore-based fund manager with at least one IP starting FY 2027 (YA 2028). The 30/50 rule is waived for trusts or unit trusts incentivised under S13D from YA 2025.

– IP Requirement: Only 1 IP is required, with no salary threshold (unlike S13O and S13U).

– 30/50 Rule waived to encourage cross-investments within S13D trusts and unit trusts.

– Grace Period: SFO and non-SFO S13D funds have two years to meet new economic requirements.

Closed-End Fund Option

Optional “closed-end fund” treatment for non-SFO S13O, S13OA, or S13U starting in 2025. Incentives include AUM and LBS waivers post-5th/10th year and revocation at divestment phase or 20th year. Once chosen, funds cannot opt out of closed-end treatment.

SFO Funds

The amendments to the economic criteria in S13O and S13U do not apply to Single Family Office (SFO) funds as they were revised previously.

DI Clarification

Real estate investment funds, regardless of structure, are now included in the DI list, allowing them to qualify for specified income tax exemptions. This update broadens the scope, aligning with the intent to incentivise real estate collective investment vehicles.

Foreign real estate funds, even if structured differently from Singapore-based entities, are included in the DI list.