Key Tax Policy Changes (2025–2026)

Singapore’s Monetary Authority (MAS) and the Inland Revenue Authority of Singapore (IRAS) have implemented significant tax policy shifts effective January 1, 2025, with further refinements active as of July 2026. These changes are specifically designed to attract institutional-grade crypto fund managers by providing structural flexibility and long-term tax certainty, while simultaneously raising the barrier to entry for smaller players.

Key Tax Policy Changes (2025–2026)

The core of Singapore's strategy is the extension and refinement of the Section 13O and Section 13U tax incentive schemes, which have been extended to December 31, 2029.

1. Structural Flexibility for Crypto VC/PE

For awards commencing on or after January 1, 2025, MAS introduced a "Closed-End Fund" treatment. This allows crypto Venture Capital (VC) and Private Equity (PE) funds to maintain their tax-exempt status even after they begin divesting assets.

• AUM Waiver: The annual AUM requirement is waived from the 6th incentive year onward.
• Cumulative Spending: Local business spending (LBS) can be met cumulatively over 10 years rather than annually.
• Impact: This prevents fund managers from losing tax exemptions as they distribute capital back to Limited Partners (LPs), a major historical pain point for crypto-native funds.

2. Lower Friction for Migration

Existing offshore funds (e.g., Cayman or BVI vehicles) can now migrate to Singapore and qualify for Section 13O without needing to incorporate a brand-new entity. This significantly lowers the administrative burden for established global managers looking to redomicile.

Impact on Fund Manager Attraction

Positive Drivers

• Institutional Credibility: The high compliance bar acts as a "quality filter." While the precise rejection count is not independently confirmed, the rigorous licensing process attracts managers seeking a "gold-standard" regulatory stamp [Note: not independently confirmed].
• Zero Capital Gains: Singapore maintains zero capital gains tax for personal and long-term fund investments, remaining more competitive than regional neighbors like Thailand (15% withholding).
• Liquidity Support: The Equity Market Development Programme (EQDP) was topped up by S$1.5 billion in 2026 to support asset managers committed to the local ecosystem.

Potential Deterrents & Risks

• Hong Kong Competition: Hong Kong's 2026-27 Budget explicitly expanded its tax-exempt "Designated Investments" to include digital assets. Singapore's framework remains more conservative, often requiring specific MAS/IRAS clarification for certain token types [Source: https://www.mas.gov.sg].
• Increased Reporting (CARF): Singapore is committed to the Crypto-Asset Reporting Framework (CARF), with automatic exchange of crypto-asset information set to commence in 2028 [Source: https://www.iras.gov.sg].
• Retail Restrictions: The 2026 ban on retail staking and lending, along with a 90% cold storage mandate, signals that Singapore is prioritizing institutional safety over retail-driven growth.

Conclusion

Singapore's tax refinements are highly effective at attracting large-scale, institutional crypto fund managers (S$50M+ AUM) who value structural flexibility and regulatory certainty. However, the increased AUM thresholds and local spending requirements (S$200k+ annually) may push smaller, "crypto-native" startups toward more lenient jurisdictions or the newly aggressive Hong Kong market. Specific comparative data on the exact number of managers relocating between Singapore and Hong Kong remains a gap in current reporting.