Two tax-incentive schemes sit at the centre of almost every Singapore fund and family-office structure: Section 13O and Section 13U of the Income Tax Act 1947. Both exempt qualifying income of a fund vehicle managed by a Singapore-based fund manager from Singapore tax. The difference is in the conditions — and getting the choice wrong is expensive.
What the two schemes do
Both schemes grant a tax exemption on "specified income" from "designated investments" for a fund managed out of Singapore. 13O (the Onshore Fund scheme) is the more common entry point for single family offices and smaller funds; 13U (the Enhanced Tier scheme) is built for larger and more complex structures, including those with offshore or multiple fund vehicles.
The conditions that differ
| Condition | Section 13O | Section 13U |
|---|---|---|
| Minimum AUM | S$20M at application, maintained through the incentive period | S$50M at application |
| Fund vehicle | Singapore-incorporated company or VCC | Flexible — onshore or offshore; supports umbrella VCCs and multiple funds |
| Investment professionals | At least 2 (for a single family office, at least one must be a non-family member) | At least 3 |
| Fund administration | Singapore-based administrator required | No mandatory local administrator, but substance still required |
An investment professional means a portfolio manager, research analyst or trader earning more than S$3,500 a month and spending more than 50% of their time on the qualifying activity.
Local business spending — tiered by fund size
Both schemes require a minimum amount of annual local business spending, tiered by AUM under the updated family-office framework:
- Under S$50M: at least S$200,000 per year.
- S$50M to S$100M: at least S$500,000 per year.
- Above S$100M: at least S$1,000,000 per year.
The Singapore investment requirement
Family-office funds under these schemes must also keep capital working locally: at least 10% of AUM or S$10 million, whichever is lower, invested in Singapore-based investments at any one time — including during the application. Eligible investments include Singapore equities, qualifying debt, funds distributed in Singapore and private-market investments into Singapore-incorporated companies.
Substance: the physical office rule
MAS requires the fund administration company to operate from physical commercial premises in Singapore. Virtual offices are not accepted and will result in rejection. This is part of a wider substance expectation — real people, real office, real local spend.
Which one fits?
- 13O suits a single family office or smaller fund: a Singapore company or VCC, S$20M+, two investment professionals, a local administrator.
- 13U suits larger or multi-fund structures: S$50M+, three professionals, and the flexibility to use offshore vehicles or an umbrella VCC with several sub-funds.
The scheme choice interacts with your structure decision. If you are still choosing a vehicle, read How to Set Up a VCC in Singapore (2026), and use the MAS Fund Administration Licence Estimator to confirm which licensing regime your manager needs and the VCC Setup Cost Estimator to budget the structure.
This guide is general information, not tax or legal advice. Thresholds reflect MAS and IRAS requirements as understood in 2026 and are revised periodically — confirm the current conditions with MAS/IRAS and a licensed tax adviser before applying.
Building a 13O or 13U structure? Talk to our team about running the fund — accounting, capital accounts and investor reporting — on aama.io once the incentive is in place.