Singapore fund tax incentives: Sections 13O, 13U and 13D
Compare exemption scope, AUM, staffing and local spending conditions before assessing the scheme applicable to your fund.
This guide covers Sections 13O, 13U and 13D of the Income Tax Act. Each addresses qualifying income from designated investments, but eligibility depends on the scheme and the fund’s circumstances. A VCC is a legal vehicle, not an exemption; the fund’s residence, manager and applicable conditions determine which scheme can be considered.
Use this guide to compare the fund tax schemes and their requirements. A VCC is a legal structure; a tax exemption is a separate, optional consideration. The linked guides cover each scheme, the changes introduced from 2025 and the application process in more detail.
Update — 19 August 2026: MAS has announced a new layer on top of the fund-level schemes on this page: a tax exemption on a share of the profits fund managers and investment professionals earn from strong returns in qualifying funds, applying to income from calendar 2026 with details at Budget 2027. See our full breakdown of the announcement.
13O, 13OA, 13U and 13D: key facts, with sources
The conditions most often asked about, each with the circular or provision it rests on. Track matters: the same words mean different numbers on the commercial and family-office tracks.
- Two tracks under one statute
- Since FDD Cir 05/2026, the 13O/13OA/13U conditions differ by who manages the fund: a commercial (non-SFO) track for funds under a licensed manager, and a single-family-office track for family-managed exempt offices. Every threshold below belongs to a track. Source: MAS FDD Cir 05/2026.
- 13O and 13OA minimum
- Non-SFO: S$5 million in designated investments at application, with no annual re-test (the year-end test introduced on 1 January 2025 was removed retroactively). SFO: S$20 million at application and at the end of every basis period. Source: MAS FDD Cir 05/2026; 5 July 2023 SFO conditions.
- 13U minimum
- S$50 million in designated investments on both tracks, assessed for the whole structure (master-feeder and SPVs together); re-tested yearly on the SFO track only. Source: MAS FDD Cir 05/2026.
- How the minimum is measured
- Gross value of designated investments — listed and unlisted shares, bonds, fund units, derivatives, bank deposits, non-Singapore real estate, certain commodities; loans taken to finance them, including shareholder loans, are not deducted; Singapore property is excluded and, for SFOs, capital-deployment assets sit outside the minimum. Source: Income Tax (Exemption of Income of Prescribed Persons Arising from Funds Managed by Fund Manager in Singapore) Regulations; 2025 amendments.
- Investment professionals
- 13O/13OA: at least two qualifying professionals (at the manager on the non-SFO track, enforced from YA 2028; at the SFO with at least one non-family member on the SFO track). 13U: at least three. Singapore tax-resident, above the monthly salary floor, substantially engaged in fund management. Source: MAS FDD Cir 05/2026.
- Local spending
- Non-SFO: tiered local business spending of S$200,000 / S$300,000 / S$500,000 by AUM band, with a transitional S$200,000 total-spending test until YA 2028. SFO: S$200,000 / S$500,000 / S$1 million by AUM band, with donation top-ups above hard floors. Source: MAS FDD Cir 05/2026.
- Capital deployment requirement
- SFO track only: each year the lower of 10% of AUM or S$10 million must be invested in specified Singapore-linked assets, some categories counting at a multiple. Commercial funds have no deployment requirement. Source: MAS FDD Cir 05/2026; MAS SFO FAQs.
- Private-banking account
- SFO funds must hold a private-banking account with an MAS-licensed bank at application and throughout the award; it is not a condition on the commercial track. Source: MAS SFO FAQs.
- 13D, the offshore scheme
- No minimum fund size and no MAS application; the Singapore manager must employ at least one qualifying investment professional from the financial year ending 2027. Source: Income Tax Act 1947, s 13D; 2025 amendments.
- Closed-end election
- A drawdown fund may enter on total committed capital, called and undrawn, and faces no ongoing size test; local spending is waived from year 11; the election is irrevocable and the award ends at the close of the divestment phase or year 20. Source: MAS FDD Cir 05/2026.
- The 30/50 investor test
- For 13O, 13OA and 13D funds: with fewer than ten investors no Singapore-resident company may hold more than 30%; with ten or more, 50%. A breach is penalised on the investor, not the fund. 13U funds are exempt from the test. Source: Income Tax Act 1947.
- Beyond income tax
- Qualifying funds recover GST on Singapore expenses at a fixed annual rate under the fund GST remission, and receive withholding-tax exemption on qualifying payments. Source: IRAS.
- What a missed year costs
- On the SFO track, falling below the minimum or a spending tier at year-end loses the exemption for that year of assessment, not the award; on the commercial track there is no ongoing size test after entry. Source: MAS FDD Cir 05/2026.
- Award vintages
- Conditions bind by the date of the award: pre-18 April 2022, 18 April 2022, 5 July 2023 and 1 August 2026 SFO rulebooks coexist; new applicants clear the current bar at application, older awards keep theirs. Source: MAS FDD Cir 05/2026.
The three schemes at a glance
The schemes differ mainly by the fund's residence and scale. 13O is the onshore starter, 13U the institutional tier, and 13D the route for genuinely offshore vehicles:
| Scheme | Who it is for | Vehicle / residence | Minimum AUM | Investment professionals |
|---|---|---|---|---|
| Section 13O (Onshore / Resident Fund) | Smaller funds, single-family offices | Singapore-incorporated company or VCC | S$5M non-SFO / S$20M SFO reference thresholds; confirm measurement dates and transition rules | 2 (at the manager on the non-SFO track; at least 1 non-family on the SFO track) |
| Section 13U (Enhanced Tier) | Larger or institutional managers | Any vehicle, onshore or offshore | S$50M | At least 3 |
| Section 13D (Offshore Fund) | Non-resident funds managed from Singapore | Non-Singapore-resident fund | No formal floor | Manager-based in Singapore |
Two more pages round out the family: Singapore limited partnerships use Section 13OA, and designated investments and specified income defines exactly which assets and income types qualify across all the schemes.
Read the analysis and conditions
One entity, one return. For income tax an umbrella VCC is a single entity: the VCC files one corporate tax return with IRAS for the whole structure, while each sub-fund’s income, losses and exemption are computed separately and cannot be set against another sub-fund’s. The VCC also holds the Certificate of Residence for treaty claims, issued with the relevant sub-fund named. Source: IRAS e-Tax Guide: Tax Framework for VCCs.
What do these schemes exempt?
The schemes address specified income from designated investments, including qualifying dividends, interest and gains. The detailed asset, income and eligibility conditions differ. The 13O and 13U application process should not be treated as a universal process for every scheme; assess the requirements of the chosen exemption.
13O or 13U — which do I qualify for?
The short version: if your fund is Singapore-incorporated and under roughly S$50M, 13O is usually the starting point; at institutional scale, or where you need offshore investors or vehicles, 13U fits better and carries no investor-residency restriction. The trade-off is headcount and spend — 13U asks for at least three investment professionals and a higher commitment. The full decision tree, with worked thresholds, is in 13O vs 13U: which do I qualify for?
What changed on 1 January 2025?
The 2025 revisions introduced changes to AUM, personnel and local spending. Subsequent amendments and the distinction between commercial funds and single family offices must be considered before relying on those figures. The table below retains a spending-tier reference, not a universal current schedule. See the 2025 changes to 13O and 13U for the historical context.
| Fund AUM | Local spending reference — confirm track and award terms |
|---|---|
| Below S$250M | S$200,000 |
| S$250M – S$2B | S$300,000 |
| Above S$2B | S$500,000 |
How does the exemption sit on top of a VCC?
A VCC qualifies for these incentives the same way a company does — the award attaches to the fund, not the structure. The one structural advantage: an umbrella VCC can apply at the umbrella level and have the incentive flow to its sub-funds, so a multi-strategy manager does not file a fresh application per strategy. Alongside the income-tax exemption, a qualifying VCC also picks up GST remission (recovering most GST on fund expenses, currently to 31 December 2029) and favourable stamp-duty treatment of shares issued and redeemed at NAV — both covered on the Section 13O page.
How do I apply?
For 13O and 13U, prepare the fund and manager details, investment-team information, and projected AUM and spending for the MAS application. Confirm the submission and effective-date requirements for the applicable track. See how to apply for 13O / 13U via MAS and the separate family office tax-incentive requirements.
Not sure which incentive fits your fund?
Describe your fund structure, AUM and investment team to request an introduction to a provider for an incentive assessment.
Check my eligibility →Frequently asked questions
What are Singapore's fund tax incentives?
Three schemes under the Income Tax Act, administered with MAS: Section 13O (the onshore or resident fund exemption), Section 13U (the Enhanced Tier, for larger funds), and Section 13D (the offshore fund exemption). Each exempts a qualifying fund's income from designated investments from Singapore tax when MAS conditions are met.
What is the difference between 13O and 13U?
13O is the resident-fund scheme, while 13U accommodates qualifying onshore and offshore structures. Compare the applicable track before using the AUM and personnel figures: the 13O non-SFO and SFO thresholds differ, and eligibility depends on more than scale.
Do these incentives apply to a VCC?
Yes. A VCC qualifies the same way a company does — the tax award attaches to the fund, not the structure. An umbrella VCC can apply at the umbrella level and have the incentive flow to its sub-funds.
What changed in 2025?
The 2025 revisions addressed AUM, investment professionals and tiered local spending. The S$5 million non-SFO and S$20 million SFO reference figures concern different tracks. Current testing and spending requirements must also account for subsequent amendments, transition provisions and award terms.
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.