The Monetary Authority of Singapore (MAS) has taken a significant step towards facilitating international investors.Effective August 1, 2026, new rules governing the tax exemption schemes for funds and family offices (specifically under Sections 13O and 13U of the Income Tax Act) have come into force. This targeted relaxation of technical barriers aims to enhance Singapore’s attractiveness as a premier global asset management hub.
Key Regulatory Enhancements
The updated MAS circular introduces three core optimizations designed to reduce the administrative burden and expand investment opportunities:
Non-SFO Local Investment Liberalization: For structures without Single Family Office status (non-SFO funds),the requirement to maintain a minimum Assets Under Management (AUM) level in local investments on an annual basis has been removed. This criterion is now only tested at the point of application, granting funds greater operational freedom throughout their lifecycle.
Streamlined Family Office Conditions: For Single Family Offices (SFOs), annual requirements regarding local business spending and mandatory banking accounts have been updated. These changes aim to simplify compliance procedures and adapt the regulation to the practical needs of family capital.
Removal of Physical Commodity Cap: The 5% limit on investments in physical commodities and commodity derivative instruments in Singapore has been lifted. This allows portfolio managers to diversify risks more effectively by employing a broader spectrum of assets.
Business Analytics
The new MAS policy demonstrates Singapore’s continued commitment to competing for high-quality capital by simplifying technicalities where possible, while maintaining robust substance requirements. For existing and new structures, this implies:
Reduced ongoing compliance maintenance costs.
Greater flexibility in making dynamic investment decisions.
Opportunities to re-evaluate portfolio diversification strategies.
Clients with international business structures must immediately review their current asset management criteriaregarding spending and AUM levels against the new regulations, considering the effective date of their tax incentive award.