Tax exemption, framework to attract global leaders: MAS unveils plans to grow asset management hub

The Monetary Authority of Singapore (MAS) announced on Wednesday (Aug 19) a "package" to grow the asset management industry in the face of rising competition.

Local fund managers and investment professionals will receive tax exemption on their earned share of investment profits from the qualifying funds they manage. 

The central bank said it will also introduce a new hedge fund investment programme, as well as a new investment management track under the Overseas Networks & Expertise (ONE) Pass work visa for top global talents.

MAS deputy chairman Chee Hong Tat said the three new measures aim to strengthen Singapore's competitiveness and attract leading asset managers, global capital and world-class investment talent.

The proposed tax exemption scheme will begin from the year of assessment 2027, said Chee, who is also Minister for National Development.

More details will be announced at the next Budget.

"(The tax exemption) is a targeted scheme. In doing so, we want to be able to grow the industry, and the growth is what I think will help us to be able to spread the gains of economic growth to a wider pool of people in our society," he said.

@asiaone A new investment management track under the Overseas Network and Expertise (ONE) Pass framework was among the set of measures announced by the Monetary Authority of Singapore (MAS) on Wednesday (Aug 19). MAS deputy chairman Chee Hong Tat shared with the media about how the measures to strengthen Singapore's competitiveness as a leading asset management hub. #sgnews #Singapore #Finance #Economy ♬ original sound - AsiaOne

On the hedge fund investment programme, MAS said it will invest with hedge fund managers that are committed to establishing or deepening their presence in Singapore.

It said that the programme will support the growth of Singapore's hedge fund investment ecosystem.

Last, the creation of an investment management track under ONE Pass seeks to attract top global leaders and senior investment professionals in the asset management industry.

MAS said the track could involve a refined assessment of salaries to better reflect established compensation structures in the industry, such as recognising returns linked to investment performance and fund outcomes. 

"This would acknowledge that such arrangements form a significant and recurring component of compensation for individuals performing specialised fund management services, besides fixed monthly salaries," MAS said.

Said Chee: "The idea is no different from what the ONE Pass framework as a whole is trying to achieve: when we bring in this smaller number of top-tier talent from overseas, they help to create a magnified impact on our economic growth, job opportunities, creating more good jobs for our people.

"This is what we hope to achieve too for the asset management industry."

According to MAS, there are 25,000 Singaporeans in the local asset mangement industry, making up 80 per cent of the total workforce.

Responding to queries on whether the measures are in response to other markets, such as Hong Kong, Chee said Singapore does not see the competition with the city as "zero sum".

"We don't think that the competitiveness is anchored only on one factor, say tax, for example, but that is part of the overall consideration. So, we do need to look at the overall competitive landscape," he added.

Chee said the asset management industry is an important part of economic growth: "It is an important provider of jobs to our people and...we will do what it takes to maintain and uphold the competitiveness of our financial services industry."

@asiaone The Monetary Authority of Singapore (MAS) deputy chairman Chee Hong Tat also told reporters on Wednesday (Aug 19) that Singapore will have to look at the overall competitive landscape to maintain its attractiveness. Chee was responding to queries on whether the measures announced by MAS, including a new hedge fund investment programme, are in response to other markets, such as Hong Kong. #sgnews #Singapore #Finance #Economy ♬ original sound - AsiaOne

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lim.kewei@asiaone.com