Tax Changes For Companies

Tax Incentive to Promote Boutique Fund Management

Since the early nineties, fund management activity has grown rapidly. Compared to 1991, there has been a five-fold increase in the amount of funds managed in Singapore to $124 billion in 1997. This is expected to grow further, despite the Asian economic crisis. Many large and internationally reputable fund management companies have established a presence in Singapore.

The Banking and Finance Subcommittee of the Committee on Singapore's Competitiveness has, however, recommended that Singapore should also encourage the growth of boutique fund managers. Boutique fund managers are primarily indigenous fund management companies set up and run by professionals who typically have considerable experience in the fund management industry.

Nurturing boutique fund managers will create more diversity and also contribute towards the growth of our local fund management industry. I have therefore decided to exempt from tax, the qualifying income derived by foreign investors from funds managed by qualifying boutique fund managers. The types of income qualifying for exemption will be the same as that under the Approved Fund Manager scheme. The scheme will be effective for a period of five years from 27 February 1999 and will be administered by MAS. MAS will be releasing the details separately.