Do EAMs Need a 13O/13U Structure for Their Clients?
When an external asset manager should put clients into a tax-incentivised fund — and when it is overkill. The thresholds, the VCC route, and the answer.
The honest answer: not every EAM client needs a 13O or 13U structure — but for clients with serious assets managed from Singapore, it can be one of the most valuable things an external asset manager arranges. The 13O and 13U fund tax incentives exempt qualifying fund income from Singapore tax, but they only pay off where there is enough taxable, Singapore-managed income to justify the setup and ongoing compliance cost, and where the client can meet the AUM, investment-professional and local-spending thresholds. This page helps an EAM decide which clients benefit, and how to give them access.
The schemes are not structures in themselves — they sit on top of a fund vehicle, almost always a VCC, managed by a MAS-licensed Permissible Fund Manager.
Which EAM clients actually benefit from 13O/13U?
Run each client through a simple filter:
- Benefits clearly: substantial AUM (comfortably above S$5M, ideally toward S$50M+), income that would otherwise be taxable in Singapore, and a willingness to put assets into a managed fund vehicle with real substance.
- Marginal: mid-sized clients who could meet 13O but whose tax saving barely exceeds the compliance cost — pooling them with others may tip the balance.
- Little or no benefit: clients whose income is not taxable in Singapore, who are purely offshore, or who are too small to clear the thresholds. For them, a plain LPOA custody arrangement may be all that is needed.
What are the thresholds an EAM must hit?
The current position:
| Condition | Section 13O (Onshore) | Section 13U (Enhanced Tier) |
|---|---|---|
| Minimum AUM | ~S$5M designated investments at each FY-end | S$50M at application and each FY |
| Investment professionals | ≥2 (≥1 non-family) | ≥3 (≥1 non-family) |
| Local business spending | Tiered: <S$250M → S$200k · S$250M–2B → S$300k · >S$2B → S$500k | |
| MAS application | Required | Required |
| Typical fit for EAM clients | Single wealthy family / smaller pooled book | Larger families, institutional, pooled platform |
Full detail and what changed in 2025 is on the 13O/13U tax incentives hub.
How does an EAM give clients access to 13O/13U?
By placing client assets into a qualifying fund vehicle — typically a VCC — managed by a Permissible Fund Manager, then applying to MAS. The powerful move for an EAM is to pool several clients into one VCC umbrella with ring-fenced sub-funds: shared substance and spending can make the thresholds easier to clear than each client structuring alone. That is the core of our VCC sub-fund platform playbook.
Does the EAM need its own licence to do this?
No. The fund vehicle must be managed by a MAS-licensed or regulated Permissible Fund Manager, but that can be a third party rather than the EAM. So you can put clients into a 13O/13U-qualifying VCC run under an existing licensed manager before — or instead of — getting your own CMS licence. When it makes sense to bring the licence in-house is covered in from EAM to licensed fund manager + VCC.
Should your clients be in a 13O/13U structure?
We partner with MAS-licensed CMS fund managers. Tell us your clients' profile and we'll help you map who qualifies.
Check eligibility →When is a 13O/13U structure not worth it?
Skip it where the tax saving will not exceed the setup and annual compliance cost — small accounts, non-resident clients, or purely offshore income. In those cases keep the client on a clean LPOA arrangement and revisit when their AUM grows. Family-office-scale clients should also weigh family office structures, and you can sanity-check the economics with the VCC cost calculator.
Frequently asked questions
Do EAM clients need a 13O or 13U structure?
Not always. A 13O or 13U structure only helps where a client has enough taxable Singapore-sourced or Singapore-managed fund income to make the exemption worth the setup and compliance cost. Clients who are non-resident, fully offshore, or small may see little benefit. Where a client has substantial AUM managed from Singapore, pooling them into a 13O/13U-qualifying VCC can be very valuable.
What are the 13O and 13U thresholds an EAM should know?
13O requires around S$5 million in designated investments at each financial year-end and at least two investment professionals (one non-family); 13U requires S$50 million and at least three investment professionals (one non-family). Both require tiered local business spending from S$200,000 to S$500,000 depending on AUM. Confirm current figures with MAS.
How does an EAM give clients access to 13O/13U?
By placing client assets into a qualifying fund vehicle — typically a Variable Capital Company (VCC) — managed by a MAS-licensed Permissible Fund Manager, then applying to MAS for the incentive. An EAM can pool several clients into one VCC umbrella with ring-fenced sub-funds, which can make the AUM and spending thresholds easier to meet.
Can an EAM apply for 13O/13U without its own licence?
The fund vehicle must be managed by a MAS-licensed or regulated Permissible Fund Manager, but that can be a third-party manager rather than the EAM. So an EAM can put clients into a 13O/13U-qualifying VCC run under an existing licensed manager before, or instead of, obtaining its own CMS licence.
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.