Singapore eyes hedge fund tax cuts to boost financial hub role: report

[SINGAPORE] The Monetary Authority of Singapore (MAS) has held talks with investment firms on reducing taxes for fund managers in a bid to maintain the island’s competitiveness and retain talent, the Financial Times reported. 

Fund executives have told the regulator that planned changes in Hong Kong’s tax laws are likely to lead to a push for relocations to that city, FT said, citing unidentified people familiar with the discussions. 

Responding to a query by Bloomberg News, an MAS spokesperson said that it is “reviewing measures to sharpen the competitiveness of Singapore as a trusted and dynamic financial centre to financial institutions and talent”.

The Hong Kong government is proposing tax exemptions for a wide range of alternative asset managers on so-called carried interest.

That is the share of investment profits paid to fund managers, often making up a huge chunk of their annual compensation. 

The move is part of a broader push to attract global firms and executives.

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Hong Kong has already eased red tape for family offices, embraced cryptocurrencies and proposed looser regulations for mutual funds to maintain its place among the world’s major financial hubs.

One measure that the MAS is discussing is to cut the tax rate of a special incentive programme where investment groups pay 10 per cent compared with Singapore’s standard corporate tax rate of 17 per cent, the FT said.

That would allow the firms to pass on savings to portfolio managers, it added. BLOOMBERG