【Licensing】13R & 13X-FOZL - International Accounting & Advisory Firm

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【Licensing】13R & 13X

For investments in Asia and the Pacific, Singapore is an important base for family offices, private equity, real estate, and hedge fund managers.

Singapore is also the preferred domicile for a growing number of investment institutions. This is due to the excellent growth of the fund management industry in Singapore, which can be attributed to several factors, including the ease of doing business in Singapore and the attractive tax incentives for funds and fund managers. Outside of traditional offshore fund jurisdictions such as the Cayman Islands, Singapore’s regulatory and tax regime for funds is considered to be one of the most attractive in the world.

For funds managed by onshore fund managers in Singapore, some of the fund’s income may be deemed to be generated in Singapore as the fund management process takes place in Singapore. Therefore, the fund may be subject to tax in Singapore under Singapore tax laws. However, funds may be exempt from tax under the Fund Tax Incentive Scheme if they meet certain conditions.

Under Singapore’s fund tax scheme, funds managed by onshore fund managers in Singapore are exempt from tax on certain income earned from specified investments. Funds approved before 31 December 2024 will enjoy tax-free treatment for life if they continue to meet the terms of the tax exemption. The tax exemption policy is as follows:

	Tax exemption for offshore funds 13AC	Tax exemption for onshore funds 13R	Enhanced fund tax exemption policy 13X
Tax exemption	Exemption of specific income from specified investments
The legal form of the fund	Companies, trusts, and individuals	Companies registered in Singapore	Any form of fund
Fund tax residence	Except for Singapore fund managers, the fund does not include Singapore tax residents and does not operate physically in Singapore	Must be a Singapore tax resident	no limit
Variable capital company	No	can	can
Fund manager	Singapore is onshore and holds a fund management license issued by the Authority (unless it is exempt from holding a license). Also, 13X requires funds to be directly managed or advised by Singapore’s fund managers, and fund companies must hire at least three investment professionals.
Investors	Cannot be 100% owned by Singapore investors.		Unlimited
Amount of assets under management	Unlimited	Unlimited	At least S $ 50 million
Annual Fund Expenditure	Unlimited	At least S $ 200,000 per year	At least S $ 200,000 per year
Approval requirements	No approval required	Requires Monetary Authority of Singapore approval The investment strategy cannot be changed after approval
Financial report	Provide annual reports to investors	Provide annual reports to investors	no request
Claim tax	Basically no requirements	File a tax with the tax office	File a tax with the tax office