Linkedin
Facebook
Email
more
On 31 July 2026, the Monetary Authority of Singapore (“MAS”) issued Circular FDD Cir 05/2026 (“the 2026 Circular”) setting out changes and updates to the fund tax incentive schemes under Section 13D (“S13D”), Section 13O (“S13O”), Section 13OA (“S13OA”) and Section 13U (“S13U”) of the Singapore Income Tax Act 1947 for non-single family office (“non-SFO”) funds; i.e. funds typically managed by a licensed fund management company (“FMC”) in Singapore.
At the same time, MAS refined the economic conditions applicable to single family office (“SFO”) funds; i.e. fund vehicles which consist of assets primarily originated from member(s) of the same family and are managed by a SFO that is exempted from licensing requirements under the Securities and Futures Act 2001. The refinements provide greater operational flexibility and further strengthen Singapore's position as a preferred jurisdiction for the establishment and growth of single family offices.
Revised conditions for new SFO funds
New SFO funds are required to meet the following refined economic conditions which take effect from 1 August 2026.
Prior to the issuance of the 2026 Circular, the conditions applicable to SFO funds under S13O and S13U schemes had undergone two rounds of revisions, resulting in three broad sets of conditions i.e. the pre-18 April 2022 conditions, the 18 April 2022 conditions and the 5 July 2023 conditions.
Awards approved on or after 1 August 2026 can generally be referred to as “awards subject to 5Jul23 conditions” as the annual conditions applicable to such awards are substantially similar to the revised 5 July 2023 conditions.
5 July 2023 Conditions | Revised 5 July 2023 conditions effective from 1 August 2026 | What has changed |
Assets Under Management in Designated Investments (“AUM in DI”) | ||
The minimum AUM in DI must be met at the point of incentive application and throughout the incentive period. S13O/S13OA: S$20 million. S13U: S$50 million. | The minimum AUM in DI must be met at the point of incentive application and at the end of each financial year (“FY”) relating to any year of assessment. S13O/S13OA: S$20 million. S13U: S$50 million. | The requirement is now tested at the point of incentive application and at year-end rather than throughout the incentive period. In contrast, a non-SFO fund is only required to meet the minimum AUM in DI condition at the point of incentive application and not at the end of each FY from 1 January 2025. |
Investment Professionals (“IPs”) | ||
The fund must be managed directly by an SFO in Singapore throughout the year. Minimum qualifying IPs to be employed by the SFO at the point of incentive application and throughout each basis period: S13O/S13OA: Two qualifying IPs of whom at least one is not a family member of the beneficial owner(s) of the fund. S13U: Three qualifying IPs of whom at least one is not a family member of the beneficial owner(s) of the fund. | The fund must be managed directly by an SFO in Singapore throughout the year. Minimum qualifying IPs to be employed by the SFO at the point of incentive application (with phased hiring allowed post incentive application) and throughout each basis period: S13O/S13OA: Employ at least 2 qualifying IPs. May employ one qualifying IP (can be a family or non-family member) at the point of incentive application and the second one by the end of the FY relating to the first YA of the award. S13U: Employ at least 3 qualifying IPs. May employ two qualifying IPs (can be family or non-family members) at the point of incentive application and the third one by the end of the FY relating to the first YA of the award. Non-family member IP The requirement for at least one qualifying IPs to be a non-family member remains for S13O, S13OA and S13U funds. | The minimum qualifying IPs no longer need to be in place at the point of incentive application, provided the remaining qualifying IP is hired within the prescribed time period.
|
Local Business Spending (‘LBS”) Requirement for S13O, S13OA and S13U Funds |
The fund must incur the following tiered minimum LBS that corresponds to the AUM in DI as at the end of each FY relating to any YA.
| Tiered LBS Requirement | |||
AUM in DI as at end of FY | Less than S$50 million | S$50 million to less than S$100 million | S$100 million or more |
| Minimum annual LBS requirement | S$200,000 | S$500,000 | S$1,000,000 |
| LBS requirement may be met by | Minimum LBS of S$200,000 | Minimum LBS of S$200,000 | Minimum LBS of S$200,000 |
The fund must incur the following tiered minimum LBS that corresponds to the AUM in DI as at the end of each FY relating to any YA.
| Tiered LBS Requirement | |||
AUM in DI as at end of FY | Less than S$250 million | S$250 million to less than S$2 billion | S$2 billion or more |
| Minimum annual LBS requirement | S$200,000 | S$500,000 | S$1,000,000 |
| LBS requirement may be met by | Minimum LBS of S$200,000 | Minimum LBS of S$300,000 | Minimum LBS of S$500,000 |
The AUM in DI thresholds for higher spending tiers have increased significantly and the minimum local business spending component has also been tightened for larger funds.
Capital Deployment Requirement (“CDR”) for S13O, S13OA and S13U Funds | ||||||||||||||
|
|
| ||||||||||||
Private Banking Account
SFO funds continue to be required to maintain a private banking account with an MAS-licensed financial institution at the point of incentive application and throughout each basis period relating to any YA.
For those funds whose letter of award did not specifically state the requirement to maintain any banking account in Singapore, a grace period of three months from 1 August 2026 has been granted to set up a banking account or private banking account with an MAS-licensed financial institution. Once established, the account must be maintained throughout the incentive period. MAS may revoke the incentive award from the end of the grace period if this condition is not complied with.
Implications for existing incentive awardees
The refinements announced by MAS on 31 July 2026 affect existing incentive awardees differently, depending on the set of conditions applicable to their incentive awards. Where the changes apply, they will take effect from the YA where the basis period ends on or after 1 August 2026.
Existing incentive awardees that remain subject to the pre-18 April 2022 or 18 April 2022 conditions have generally not been required to transition to the 5 July 2023 conditions.
The table below summarises the key implications for SFO funds with existing S13O, S13OA or S13U awards granted before 1 August 2026.
| Applicable conditions | What remains unchanged | Impact of the refinements from 1 August 2026 |
| Pre-18 April 2022 awardees | AUM, IP, business spending and CDR conditions remain unchanged. | Not applicable. |
| 18 April 2022 awardees | AUM and IP requirements remain unchanged. | The revised LBS requirement and CDR apply from the relevant YA. |
| 5 July 2023 awardees | IP requirement remains unchanged. | The revised AUM in DI, LBS requirement and CDR apply from the relevant YA. |
Updates to Designated Investments list - Investments in IPMs and other clarifications
Prior to 1 August 2026, investments in physical IPMs qualified as DI provided they did not exceed 5% of the fund’s total investment portfolio. The imposition of the 5% cap constrained family offices from allocating a larger portion of their portfolios to physical gold. This 5% cap was removed with effect from 1 August 2026.
The removal of the 5% cap provides family offices with greater flexibility in portfolio diversification. It also supports a suite of initiatives aimed at positioning Singapore as a trusted node in the global gold ecosystem, including the introduction by MAS of central bank gold vaulting services, the Singapore Exchange’s establishment of an over-the-counter gold clearing system for Loco Singapore and the development of gold-related capital markets products.
While the updated DI list primarily reflects the removal of the 5% cap on investments in IPMs, MAS also provided further clarifications on the scope of DI and specified income (“SI”). These clarifications are relevant in assessing how certain income streams and newer investment arrangements may be treated under the fund tax incentive schemes.
- Tokenised interests in existing DI may also qualify as DI, provided the tokenised interest confer the same interests, rights and obligations as direct ownership of the underlying DI.
- Foreign-sourced income derived from DI will qualify as SI when remitted to Singapore only if both the derivation and remittance occur during the incentive period. Income derived outside the incentive period, or remitted after the incentive period, will not qualify as SI.
- Guarantee fees derived in respect of a DI may qualify as SI where the fund is primarily established for investment purposes and is not being used to facilitate the treasury activities of operating companies. For example, where a fund receives guarantee fees from using or lending securities that are DI as collateral to support another entity’s debt financing or borrowing activities, such income may be regarded as SI if it is derived as part of the fund’s investing activities.
Key takeaways
The refinements taking effect from 1 August 2026 provide SFO funds with greater flexibility in meeting certain ongoing conditions, while continuing to emphasise on economic substance and the deployment of the fund's capital into qualifying investments in Singapore. New applicants should consider the revised CDR, AUM, IP and LBS requirements at an early stage of their incentive application process. Existing incentive awardees should also take the opportunity to determine which set of conditions applies to their awards and assess whether the announced changes will impact them.
Read the article in PDF
MAS Updates on Tax Incentive Schemes for Single Family Office Funds in Singapore
Get in touch with one of our specialists if you are planning to establish an SFO structure in Singapore or to discuss these latest changes and determine the impact, if any, on your existing SFO setup.
| Koh Puay Hoon Partner & Head of Tax Advisory +65 6594 7820 KohPuayHoon@RSMSingapore.sg |
| Law Wei Lin Partner, International Tax +65 6715 1164 LawWeiLin@rsmsingapore.sg |
| Soh Jin Feng Director, International Tax +65 6715 1161 SohJinFeng@RSMSingapore.sg |
