One statute, two tracks: MAS formally splits 13O/13OA/13U into commercial and family-office regimes
For years, practitioners inferred it from scattered circulars and the web cited contradictory numbers — is the 13O minimum S$5 million or S$20 million? MAS Circular FDD Cir 05/2026 (31 July 2026) finally writes the demarcation into one document: Sections 13O, 13OA and 13U of the Income Tax Act now run two clearly separated condition sets — one for non-SFO funds managed by licensed fund managers, one for single-family-office funds. Both numbers are right. They belong to different tracks. Here is the full side-by-side, from the primary text.
The short answer
The statute is shared; the operating rules are not. A non-SFO fund — the circular's term for funds "typically managed by a licensed fund management company", with third-party capital or a bona fide intention to raise it — qualifies for 13O/13OA from S$5 million in designated investments at application and 13U from S$50 million, with no annual minimum AUM condition at all (removed retroactively from 1 January 2025) and no capital deployment requirement. An SFO fund — assets primarily from one family, managed by a licensing-exempt single family office — faces S$20 million (13O/13OA) or S$50 million (13U) tested at application and every basis-period end, higher local-spending tiers, a mandatory non-family hire, a private-banking account condition, and the capital deployment requirement: the lower of 10% of AUM or S$10 million invested into Singapore-linked assets. If you manage third-party money under a CMS licence, the "local investment mandate" you may have read about on MAS's family-office page simply does not apply to your fund.
The full demarcation, side by side
| Condition | Non-SFO track (commercial) | SFO track (family office) |
|---|---|---|
| Manager | CMS-licensed or exempt FMC | SFO exempt under para 5(1)(ba), SF(LCB) Regulations |
| Capital base | Third-party investors, or bona fide intention to raise (MAS can revoke if never evidenced) | Assets primarily originated from members of one family |
| Min AUM in DI — 13O/13OA | S$5M at application; grace to the end of the 3rd YA's basis period; no annual re-test | S$20M at application and every year-end |
| Min AUM in DI — 13U | S$50M at application; no annual re-test | S$50M at application and every year-end |
| Investment professionals — 13O/13OA | 2 qualifying IPs at the FMC (transitional: enforced from YA 2028) | 2 at the SFO, ≥1 non-family; may apply with 1, complete by end of first YA's basis period or award revoked from day one |
| Investment professionals — 13U | 3 qualifying IPs at the FMC | 3 at the SFO, ≥1 non-family; may apply with 2 |
| Spending condition | Tiered LBS: S$200k / S$300k / S$500k by AUM band | Tiered local spending: S$200k / S$500k / S$1M — top tiers partially satisfiable via eligible donations and blended-finance grants (grants counted 2×) above LBS floors of S$300k / S$500k |
| Capital deployment requirement | None | Lower of 10% of AUM in DI or S$10M into three option classes, with 2× multipliers for SG-listed equities, substantially-SG equity funds, blended finance and unlisted SG operating companies |
| Banking condition | None specific | Private banking account with an MAS-licensed FI at application and throughout |
| Closed-end fund treatment | Available as an opt-in election | Not available (non-SFO only) |
The demarcation is stated in the circular's own FAQ with unusual bluntness: "the conditions (e.g. minimum annual spending condition) applicable to an S13O/OA/U fund managed by a non-SFO differ from those applicable to an S13O/OA/U fund managed by an SFO."
Why MAS drew the line
The two populations were never doing the same thing. A commercial fund exists to manage other people's money — its Singapore substance shows up naturally in a licensed manager's headcount and spending, so MAS polices the third-party-capital test and leaves deployment decisions to the market. A family office fund is one family's balance sheet in a fund wrapper — the policy bargain for its tax exemption is explicit contribution to Singapore: bigger entry ticket, annually re-tested, local deployment, philanthropic channels, a supervised private-banking relationship, and at least one professional from outside the family. The August 2026 package sharpened both sides simultaneously: non-SFO funds lost their annual AUM re-test entirely, while SFO funds got easier hiring sequencing but harder screening. The tracks are drifting further apart by design.
What this settles — and the traps it leaves
Settled: the S$5M vs S$20M confusion. Competing advisers have cited both for years, each half-right. From the primary text: S$5 million is the non-SFO 13O/13OA entry; S$20 million is the SFO 13O/13OA minimum. Neither number is "the" 13O minimum without naming the track.
Settled: who bears the local investment mandate. The CDR lives exclusively in the SFO sections (Section 4, Annexes 6B/7B). Nothing in the non-SFO conditions (Section 3, Annexes 6A/7A) requires a commercial fund to invest a single dollar in Singapore assets.
Trap one: the tracks don't blend at the manager level alone. A family that appoints a CMS-licensed manager (a multi-family office, say) to run its vehicle does not automatically escape SFO conditions — the classification turns on whose assets the fund holds and the licensing basis of the management arrangement. Conversely, per the circular's FAQs, a fund that changes manager type must apply for a new award (commencing on the submission date) and meet its new track's conditions. Structure first, then apply.
Trap two: family operating businesses. An SFO fund may hold the family's operating companies without limit — but those holdings do not count toward the S$20M/S$50M minimum, while they do count toward spending and CDR conditions if they qualify as designated investments. A family whose "fund" is mostly the business plus a thin liquid sleeve can fail the entry test while looking large on paper.
Trap three: vintages. The new SFO conditions bind awards approved on or after 1 August 2026 — but existing awards sit under their own condition sets (pre-18Apr22, 18Apr22, 5Jul23), each now also modified from the first basis period ending on or after 1 August 2026. Which rulebook governs your award depends on when you applied.
Shared ground: what both tracks keep
Whichever track, the architecture is common: exemption of specified income on designated investments, for the life of the fund once awarded (with the schemes under review before their 31 December 2029 sunset — existing awards continue regardless); economic conditions assessed year by year, so a missed year costs that year's exemption rather than the award, while non-economic breaches can cost the award itself; GST remission and withholding-tax exemption alongside; and, since January 2025, welcome loosenings for everyone — funds no longer need to be newly set up, and locked investment-strategy conditions are gone (update MAS for information, not approval). The 5% cap on physical investment precious metals in the designated-investment list is removed from 1 August 2026 for all funds.
Which track is your fund on — and is it structured for it?
Tell us who manages the vehicle, whose capital it holds, and when any existing award was approved. We'll walk you through which condition set actually binds you — entry levels, spending tiers, CDR exposure — and connect you with MAS-licensed CMS fund managers or family-office specialists where it's the right fit.
Speak to a specialist →Does the capital deployment requirement apply to funds managed by CMS-licensed fund managers?
No. Under FDD Cir 05/2026, the capital deployment requirement — investing the lower of 10% of AUM or S$10 million into Singapore-linked investments — appears only in the SFO-fund conditions (Section 4 and Annexes 6B/7B). The non-SFO conditions for funds managed by licensed fund management companies (Section 3 and Annexes 6A/7A) contain no CDR and no local investment mandate. A commercial fund's Singapore-facing obligations are the tiered local business spending and investment-professional conditions.
What is the difference between the normal 13O/13U schemes and the SFO versions?
Same statute, different condition sets. Sections 13O, 13OA and 13U of the Income Tax Act cover both, but MAS now applies two demarcated tracks: non-SFO funds (managed by a licensed FMC, requiring third-party capital or a bona fide intention to raise it) enter 13O/13OA at S$5 million and 13U at S$50 million with no annual AUM re-test and no CDR; SFO funds (family assets, licensing-exempt manager) enter at S$20 million (13O/13OA) or S$50 million (13U) tested at every year-end, plus the CDR, a private-banking account condition, higher spending tiers and a mandatory non-family investment professional.
What are the minimum AUM requirements under 13O and 13U in 2026?
Track-dependent. Non-SFO funds: S$5 million in designated investments at application for 13O/13OA (with a grace period to the end of the third year of assessment's basis period) and S$50 million at application for 13U — with no annual minimum thereafter, retroactive to 1 January 2025. SFO funds: S$20 million for 13O/13OA and S$50 million for 13U, required at application and at the end of every basis period. This resolves the S$5M-versus-S$20M confusion across the web — both are right, for different tracks.
What are the SFO fund conditions for awards approved from 1 August 2026?
Investment professionals: two for 13O/13OA (at least one non-family; may apply with one and complete hiring by the end of the first year of assessment's basis period), three for 13U (apply with two). Minimum AUM in designated investments of S$20 million (13O/13OA) or S$50 million (13U) at application and each year-end. Tiered local spending of S$200,000 / S$500,000 / S$1 million by AUM band, partially satisfiable above a floor through eligible donations and double-counted blended-finance grants. The capital deployment requirement. And a private banking account with an MAS-licensed institution at application and throughout.
What happens if a fund changes from an SFO manager to a licensed fund manager, or vice versa?
The award does not travel across tracks. Per the circular's FAQs, a change of manager type means applying for a new award — with the new award commencing on the application submission date to avoid a coverage gap — and the fund then meets the condition set of its new track. The two tracks' conditions differ explicitly, so model the economics before restructuring.