Singapore pushes fund managers to deepen local presence

Tax, talent, and government investment measures seek to anchor more investment decision-making and financial-services activity locally.

Singapore’s latest asset management incentives could strengthen its ability to attract investment teams, but their success will depend on whether they generate higher-value jobs and deeper business activity locally.

Amy Ang, Head of Tax at Ernst & Young Solutions LLP, said tax incentives have long formed part of Singapore’s efforts to remain competitive as an asset management hub.

“Having a tax exemption is definitely a sweetener in itself,” Ang said, adding that tax is only one part of the measures being rolled out.

The exemption is limited to qualifying funds, with conditions covering minimum investment professionals, assets under management, and business spending in Singapore.

Ang said these requirements could help ensure that managers establish substantive operations rather than simply shift paperwork.

Talent access is another factor influencing where global asset managers base their operations. Ang said the ONE Pass investment management track aims to make it easier for global talent to relocate to Singapore, giving managers access to experienced investment professionals.

Government investment provides another incentive. Ang said the hedge fund investment programme sends a signal that Singapore is prepared to invest alongside managers willing to expand or anchor their presence locally.

She added that the measures respond to industry feedback as Singapore faces growing global competition for asset management activity.

Assets under management alone, however, would not determine whether the measures succeed.

Ang said Singapore’s asset management industry currently supports 25,000 jobs, with future progress depending on both employment growth and the quality of those positions.

More roles involving investment decision-making would indicate that greater activity is being anchored locally, she said.

Growth could also create spillovers across the financial-services ecosystem, including prime brokers, tax advisers, auditors, and lawyers.

The longer-term test is whether Singapore converts further asset management growth into quality employment and broader economic activity.