Section 13U / Enhanced Tier Fund: The 2026 Guide
What 13U exempts, the S$50M AUM and three-professional rules, and why institutional investors expect it.
Section 13U — commonly called the Enhanced Tier Fund scheme — is Singapore's tax incentive for larger funds, administered with the Monetary Authority of Singapore (MAS) under the Income Tax Act. Like Section 13O, it exempts qualifying income from designated investments from Singapore tax. The difference is scale: 13U is aimed at funds with at least S$50 million under management, applies to both onshore and offshore vehicles, and carries no upper limit on fund size — which is why institutional limited partners and multi-family offices treat it as the baseline credibility marker.
If your fund is smaller or simpler, start with 13O; the 13O vs 13U comparison walks through the choice. This page is part of the Singapore fund tax incentives hub.
What is the Enhanced Tier (Section 13U)?
The Enhanced Tier scheme exempts the specified income of an approved fund — onshore or offshore — that is managed from Singapore. It was designed to attract substantial fund mandates, so the qualifying bar (AUM, headcount, local spending) is higher than 13O, but the rewards scale: there is no ceiling on the fund, and the award can cover a VCC umbrella with multiple ring-fenced sub-funds under a single application.
Who qualifies for Section 13U?
- A fund (company, VCC, trust or — at the LP level — limited partnership) managed by a MAS-licensed or exempt fund manager in Singapore;
- S$50M minimum AUM, met at application and at the end of each financial year;
- At least three investment professionals, Singapore tax-resident and paid above the MAS salary floor, with at least one non-family member; and
- Meeting the tiered local business spending requirement below.
What are the 13U numbers versus 13O?
The headline differences are AUM and headcount. 13U requires S$50M versus 13O's S$5M, and three investment professionals versus two. Local business spending uses the same tiered scale for both schemes:
| Condition | Section 13O | Section 13U (Enhanced Tier) |
|---|---|---|
| Minimum AUM | S$5M (designated investments, end of FY) | S$50M (at application and each FY) |
| Investment professionals | ≥2 (≥1 non-family) | ≥3 (≥1 non-family) |
| Fund domicile | Onshore (Singapore) | Onshore & offshore |
| Local business spending | <S$250M → S$200k · S$250M–2B → S$300k · >S$2B → S$500k | |
Why do institutional investors prefer 13U?
An Enhanced Tier award signals substance — a real Singapore team, real local spend and meaningful scale. Institutional LPs, pension funds and sophisticated multi-family offices often expect it as a default. It also future-proofs growth: there is no AUM ceiling to outgrow, and the umbrella VCC structure lets you add ring-fenced sub-funds under the same award. See family office structures for how larger family capital uses 13U.
Aiming for the Enhanced Tier?
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Check my eligibility →Frequently asked questions
What is the minimum AUM for Section 13U?
S$50 million, which must be met at application and at the end of each financial year. The Enhanced Tier scheme is aimed at larger and institutional funds.
How many investment professionals does 13U require?
At least three investment professionals who are Singapore tax-resident and paid above the MAS salary threshold, of whom at least one must be a non-family member.
Why do institutional investors prefer 13U over 13O?
13U has no cap on fund size, can cover both onshore and offshore vehicles, and signals greater substance. Institutional LPs often expect an Enhanced Tier award as a baseline of credibility.
Can a VCC umbrella with sub-funds use 13U?
Yes. A VCC umbrella can hold an Enhanced Tier award, and MAS allows the AUM of ring-fenced sub-funds to be counted toward the S$50M threshold under the umbrella application.
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.