Designated Investments & Specified Income, Explained
The asset list that decides what is tax-exempt under 13O, 13U and 13D — and the income that isn't.
Designated investments are the defined list of asset classes whose income can be exempted under Singapore's fund tax incentives, and specified income is the income arising from them that the exemption actually applies to. In other words: holding a 13O, 13U or 13D award does not make everything a fund earns tax-free — only the specified income from designated investments is exempt. The list and definitions sit in subsidiary legislation under the Income Tax Act, administered with the Monetary Authority of Singapore (MAS) and IRAS.
This page is part of the Singapore fund tax incentives hub. It matters for portfolio construction whatever vehicle you use — company, LP or VCC.
What counts as a designated investment?
The list is deliberately broad and covers most things a typical fund holds. Common designated investments include:
- Shares, stocks and other equity securities (listed and, within limits, unlisted);
- Bonds, notes and other debt securities;
- Units in unit trusts and interests in other funds;
- Derivatives, futures and options;
- Deposits with banks and approved financial institutions;
- Certain loans, structured products and private investments; and
- Foreign-currency and other approved financial instruments.
What is specified income?
Specified income is what those designated investments generate — for example dividends, interest, distributions and gains on disposal. When a fund with a valid award earns specified income from designated investments, that income is exempt from Singapore tax. Income from assets outside the list is not covered by the exemption and can be taxable.
What does NOT qualify?
| Typically qualifies (designated) | Typically does not qualify |
|---|---|
| Listed and unlisted shares | Direct Singapore residential / commercial property |
| Bonds and debt securities | Trading income from a non-investment trade or business |
| Units in funds, derivatives | Income with insufficient nexus to designated investments |
| Deposits, approved loans | Certain Singapore-sourced income outside the list |
Direct holdings of Singapore real estate are the classic trap — property is generally held through shares, units or other designated-investment categories rather than directly, so the income remains within the exemption.
Why does the list matter for my fund?
Because the award protects only specified income. A fund that drifts into material non-designated income can find that portion taxed even with a 13O or 13U award in hand. Portfolio construction, especially for family offices and multi-asset strategies, has to respect the designated-investments list from day one. The list also interacts with the 2025 economic-substance changes and the capital deployment requirement, where certain investments carry multipliers.
Unsure if your portfolio qualifies?
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Check my eligibility →Frequently asked questions
What are designated investments?
Designated investments are the broad list of asset classes whose income qualifies for exemption under Singapore's 13O, 13U and 13D schemes - including shares, bonds, units in funds, derivatives, deposits, and certain loans and private holdings. The list is defined in subsidiary legislation under the Income Tax Act.
What is specified income?
Specified income is the income arising from designated investments - dividends, interest, gains on disposal and similar - that the tax exemption applies to. Income from non-designated assets does not get the exemption.
Is Singapore real estate a designated investment?
Direct Singapore residential or commercial property is generally not a designated investment, so income from it does not qualify. Investments are usually structured through shares, units or other listed designated-investment categories instead.
Why does the designated investments list matter?
Because only income from designated investments is exempt. If a fund earns material income from non-designated assets, that income can be taxed even though the fund holds a 13O or 13U award, so portfolio construction has to respect the list.
VCC Singapore is an independent informational resource and is not a regulator, law firm or tax adviser. Tax thresholds and conditions are set by MAS/IRAS and change periodically — confirm the current figures before acting. This page is general information, not legal, tax or financial advice.