The Monetary Authority of Singapore (MAS) has introduced updates to the tax incentive schemes for non-Single Family Office (non-SFO) funds, effective 1 January 2025. These changes impact mainly non-SFO funds applying for the Sections 13O, 13OA, and 13U tax incentives, introducing new economic criteria such as minimum Assets Under Management (AUM), investment professionals (IPs), and local business spending thresholds, amongst others.
Key updates on the economic criteria include:
- Section 13O/13OA: Minimum AUM in DI of S$5 million at the end of every FY, and at least two IPs are required by the third year of the incentive, alongside scaled local business spending.
- Section 13U: Maintains a S$50 million minimum AUM in DI at the end of each FY but introduces scaled spending requirements.
- Introduction of Closed-End Fund Treatment: Non-SFO funds can opt for this scheme, adjusting AUM and local spending conditions over the fund's lifecycle.
The revised economic requirements, particularly the need to maintain minimum AUM in DI at the end of every FY, may present operational challenges for some fund managers due to external market factors. MAS is encouraged to consider more flexible approaches to address these concerns.
