Singapore’s financial regulator is in active discussions with investment firms about cutting taxes on hedge funds and asset managers, a move that could reshape the competitive landscape for institutional capital in Asia, including the growing cohort of crypto-native funds setting up shop in the city-state.
The Monetary Authority of Singapore (MAS) is reportedly negotiating measures that would expand eligibility for carried-interest treatment at a 0% tax rate and reduce rates from the current 10% under existing incentive schemes.
What’s on the table
The proposed changes center on two levers. First, broadening which investment profits qualify as carried interest, the performance-based compensation that fund managers earn, and taxing those at zero percent. Second, lowering the rates under Singapore’s existing special incentive programs from their current 10% threshold.
These discussions don’t exist in a vacuum. Singapore’s Budget 2026 already introduced a 40% corporate income tax rebate and committed S$1.5 billion to the Equity Market Development Programme (EQDP), which is designed to boost liquidity in local markets. The hedge fund tax talks represent another front in the same campaign.
Previous revisions to Singapore’s flagship fund tax schemes, known as Sections 13O and 13U, took effect in 2025. Those changes tightened eligibility requirements but maintained exemptions on specific categories of income. The current round of discussions looks to go further, actively sweetening the deal rather than just preserving the status quo.
Why crypto funds are paying attention
While no specific crypto tokens or blockchain-related provisions were mentioned in the tax discussions, Singapore’s existing regulatory framework already creates a favorable environment for crypto-focused hedge funds and asset managers.
Singapore imposes no capital gains tax on digital assets for individuals. That baseline, combined with potential reductions in fund-level taxation, creates a compounding advantage for crypto fund managers considering where to domicile their operations.
The competitive chessboard
The S$1.5 billion EQDP top-up signals that Singapore isn’t just trying to attract foreign capital. It’s trying to build deeper local markets that give fund managers reasons to stay beyond tax incentives alone.
For investors evaluating exposure to Asian fund management infrastructure, the key variable to watch is whether these negotiations produce concrete policy changes or remain aspirational talking points. MAS has a track record of following through on regulatory promises, which lends credibility to the discussions.
Crypto hedge funds already operating in Singapore stand to benefit most directly if the changes materialize.