Singapore weighs fund managers' tax relief to compete with Hong Kong, FT reports

The Monetary Authority of Singapore's (MAS) plans to reduce taxes levied on fund managers to enhance Singapore's competitiveness as a hub for financial institutions and attract talent, the Financial Times reported.

FT said one of MAS' measures under consideration is a reduction in the tax rate under a specific incentive scheme, allowing investment institutions to pay 10 percent of Singapore's standard corporate tax rate, rather than the initial 17 percent, with savings passed on to portfolio managers.

MAS' measures follow fund executives' warnings to regulators that Hong Kong's proposal is likely to prompt financial institutions to relocate to the city.

The Hong Kong government is proposing tax exemptions on so-called carried interest for a majority of alternative asset managers – the share of investment profits fund managers receive, which typically accounts for the majority of their annual compensation. 

The move is part of a broader effort to attract international companies and executives. Hong Kong has already reduced bureaucratic barriers for family offices, adopted cryptocurrencies, and suggested more relaxed rules for mutual funds to stay competitive as a leading global financial center.

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