The battle for the financial hub is heating up! Singapore is considering cutting taxes on hedge funds to curb capital flow to Hong Kong.

The Monetary Authority of Singapore (MAS) is discussing tax reduction measures for fund managers with investment firms, following Hong Kong's efforts to promote tax incentives to attract investment and talent, in order to maintain its status as Asia's financial hub.

On July 19, 2026, at 4:46 PM, Bloomberg News reported that the Financial Times reported that the Monetary Authority of Singapore (MAS) had discussed with investment firms the possibility of reducing taxes for fund managers in order to maintain the country's competitiveness and prevent the loss of quality personnel.

Sources indicate that several fund managers have informed the MAS that Hong Kong's planned reforms to its tax laws could encourage investment firms to relocate their operations back to Hong Kong.

A spokesperson for MAS told Bloomberg that the agency is reviewing measures to strengthen Singapore's competitiveness as a reliable and dynamic financial hub for both financial institutions and personnel.

Previously, the Hong Kong government proposed a tax exemption for “carried interest” income earned by alternative asset fund managers. This refers to the share of investment profits received by fund managers and is often a significant component of their annual compensation.

These measures are part of Hong Kong's strategy to attract financial companies and executives from around the world. Previously, it had relaxed regulations for family offices, supported cryptocurrency businesses, and proposed reforms to mutual fund regulations in order to maintain its status as a global financial center.

The Financial Times report also stated that one of the measures MAS is considering is reducing the tax rate on investment incentive programs for fund management businesses, which currently pay a 10% tax rate, lower than Singapore's general corporate tax rate of 17%. Further tax reductions would allow companies to pass on the benefits of lower tax costs to fund managers and investment personnel.

This move reflects the intense competition between Singapore and Hong Kong for the role of Asia's financial hub, with both sides accelerating the introduction of tax and regulatory measures to attract investment, asset management companies, and skilled personnel from around the world.

Reference: bloomberg.com

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