Section 13O vs 13U: Comparing Singapore Family Office Tax Incentives (2026)

For high net worth individuals and families establishing a family office in Singapore, the choice between a Section 13O and a Section 13U fund tax exemption is one of the most consequential structuring decisions they will make. Both schemes offer exemption from Singapore income tax on qualifying investment income, but they differ significantly in their eligibility criteria, asset under management thresholds, local hiring obligations, and local business spend requirements.

This guide compares the two schemes side by side, so that founders and their advisers can make an informed choice before applying.

What Are Sections 13O and 13U?

Sections 13O and 13U of the Income Tax Act 1947 are fund tax exemption schemes administered by the Monetary Authority of Singapore (MAS). They grant an exemption from Singapore income tax on specified income derived from designated investments — broadly speaking, returns from an internationally diversified investment portfolio managed by a Singapore-based fund manager.

Both schemes are available to family offices structured as Singapore-incorporated companies or Variable Capital Companies (VCCs). The exemption is granted at the fund vehicle level, and the fund manager — typically a wholly-owned entity of the family — must hold a Singapore capital markets services licence or be an exempt fund manager under the Securities and Futures Act.

The two schemes are administered together by MAS, and applications are submitted through the MAS family office application portal.

Key Differences: Section 13O vs Section 13U

Assets Under Management (AUM) Threshold

Section 13O requires a minimum AUM of S$20 million at the point of application. This threshold must be maintained throughout the incentive period. Section 13O is the more accessible of the two schemes, making it the typical entry point for smaller single family offices.

Section 13U requires a minimum AUM of S$50 million at the point of application — also subject to ongoing maintenance. The higher threshold reflects the greater regulatory oversight and business contribution expected from Section 13U family offices.

Local Hiring Requirements

Section 13O requires the family office to employ at least two investment professionals, at least one of whom must be a non-family member. Both investment professionals must be Singapore citizens, Singapore permanent residents, or Employment Pass holders. The minimum annual salary for each investment professional is S$3,500 per month.

Section 13U requires at least three investment professionals, at least one of whom must be a non-family member. The salary requirements are higher — at least one investment professional must earn a minimum of S$5,000 per month. Section 13U offices are expected to hire at a more significant level, contributing meaningfully to Singapore’s asset management talent pool.

Local Business Expenditure (IBE)

Section 13O requires a minimum Incentivised Business Expenditure (IBE) of S$200,000 per year. IBE covers qualifying local spending such as salaries, fund management fees paid to a Singapore-based manager, professional fees (legal, compliance, audit), and investment-related expenses incurred in Singapore.

Section 13U requires a minimum IBE of S$500,000 per year — more than double the Section 13O threshold, reflecting the larger scale and local economic contribution expected from a Section 13U office.

Investment in Singapore Assets

Both schemes require a minimum allocation to Singapore-listed equities, Singapore-based funds, or other qualifying Singapore assets as part of the portfolio — typically 10% of the fund’s AUM (subject to a S$10 million cap). This local investment requirement encourages family offices to participate in Singapore’s domestic capital markets rather than using Singapore purely as an administrative hub.

Fund Structure

Both Section 13O and 13U can be held through a Singapore-incorporated private limited company or a Variable Capital Company (VCC). The VCC structure is increasingly preferred for Section 13U offices with multiple sub-funds or complex multi-asset mandates. For an overview of the VCC structure and its advantages, see our guide on the pros and cons of a Variable Capital Company in Singapore.

Comparison Table: Section 13O vs Section 13U

Which Scheme Should You Choose?

The choice between Section 13O and 13U largely comes down to the size of the investible assets and the family’s plans for the Singapore office.

Families with assets between S$20 million and S$50 million — or those in the earlier stages of consolidating their global wealth into a Singapore structure — will typically start with Section 13O. It is more accessible, has lower ongoing costs, and can be upgraded to Section 13U as the AUM grows.

Families with S$50 million or more in assets, or those planning to build a genuinely active Singapore investment office with a dedicated professional team, will generally find Section 13U more appropriate. The higher IBE and hiring thresholds, while costlier, are consistent with what a family office of that scale would typically spend anyway.

It is also worth noting that Section 13U may offer marginal reputational benefits in the Singapore market — institutional partners, private banks, and co-investment partners may view a Section 13U licence as a signal of greater substance and commitment to Singapore. For those considering relocation alongside the family office setup, see our guide on how to move to Singapore as a high net worth individual.

Corporate Secretarial and ACRA Requirements

Regardless of which scheme is chosen, the fund vehicle (Pte Ltd or VCC) must comply with Singapore’s corporate secretarial obligations: maintaining a registered office, filing annual returns with ACRA, holding AGMs (or passing written resolutions in lieu), and keeping statutory registers up to date. See our Singapore compliance calendar for key filing deadlines.

The fund manager entity — the MAS-licensed management company — also has its own compliance obligations under the Securities and Futures Act, including annual audits, MAS reporting, and CMS licence renewal. These are separate from the fund vehicle’s ACRA obligations and require specialist fund administration support.

For those considering property investment in Bangkok or other overseas real estate as part of a diversified family office portfolio, it is worth noting that direct overseas property holdings are generally not qualifying designated investments under either Section 13O or 13U — specialist structuring advice is needed for cross-border property allocations.

If you need legal advice on structuring your family office and choosing the right tax incentive scheme, we can point you in the right direction. For Singapore investment news and updates, there are useful resources for family office principals and wealth managers.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We assist with family office corporate secretarial work, VCC incorporations, and liaising with MAS and ACRA on behalf of our clients.

— The Editorial Team, Raffles Corporate Services