Singapore has introduced a comprehensive set of incentives aimed at attracting asset management firms, countering tax advantages offered by regional rivals, and winning the global war for top-tier investment talent. The Monetary Authority of Singapore announced on Wednesday that it plans to exempt investment professionals from taxes on income derived from fund management service profits.

The regulator also unveiled plans to establish an investment scheme designed to provide capital backing for hedge fund managers operating in Singapore, alongside relaxed visa requirements for senior fund management personnel. "As we review and calibrate our policies, we do need to take into account the changes happening in the global landscape," said Chee Hong Tat, Singapore's Minister for National Development and Deputy Chairman of the Monetary Authority of Singapore.

Fund management hubs including London, New York, and Dubai are increasingly vying for a more fluid global talent pool. Carried interest — typically set at 20% — represents the profit share allocated to private equity fund managers, which is paid out once fund returns exceed a specified hurdle rate. According to sources familiar with the policy, the tax exemption in Singapore is expected to cover a broader group of investment professionals than initially anticipated.

Singapore's fund industry has grown at an average annual rate of 7.5% over the past five years, propelling assets under management to nearly S$7 trillion (equivalent to US$5.5 trillion). The sector contributes 15% of the city-state's financial services output and accounts for 13% of employment within the financial industry.

"The initiatives we announced today reflect our ongoing commitment to strengthening Singapore's core competitive advantages, ensuring that we remain a trusted, vibrant, and globally competitive financial center," Chee added.