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

Singapore’s two family office tax incentive schemes — Section 13O and Section 13U of the Income Tax Act 1947 — are both administered by the Monetary Authority of Singapore (MAS) and both exempt qualifying fund income from Singapore tax. Yet they are not interchangeable. The right choice between them shapes your minimum asset requirements, fund structuring options, staffing obligations, and annual compliance costs for years to come.

MAS extended both schemes to 31 December 2029 in 2025, and tightened the qualifying conditions. In 2026, the decision between 13O and 13U is more consequential than ever — and more nuanced than it may first appear.

This guide compares the two schemes side by side and helps you identify which is the better fit for your family’s circumstances. Read this alongside our complete guide to setting up a family office in Singapore and our comparison of single vs multi-family office structures.

Section 13O: Enhanced-Tier Fund Tax Exemption (Formerly 13R)

Fund Vehicle Requirement

Section 13O is only available to funds incorporated in Singapore — typically a Singapore private limited company or a Variable Capital Company (VCC). Offshore fund structures (Cayman Islands, BVI, Luxembourg) do not qualify. This makes 13O the natural starting point for families who want a Singapore-domiciled structure from the outset.

AUM Threshold

The minimum assets under management (AUM) for Section 13O is S$5 million in designated investments at the end of each financial year. This is significantly lower than the Section 13U threshold and makes 13O accessible to mid-tier high-net-worth families who may not yet have S$50 million in investable assets.

Investment Professionals

Section 13O requires a minimum of two investment professionals (IPs). At least one must be a non-family member. All IPs must be Singapore tax-resident and earn above MAS’s minimum salary floor. The non-family IP requirement prevents 13O from becoming a vehicle for pure administrative cost reduction without genuine Singapore-based fund management substance.

Local Business Spending (LBS)

Annual local business spending requirements under 13O are tiered by AUM:

• AUM below S$250 million: minimum S$200,000 per year
• AUM S$250 million to S$2 billion: minimum S$300,000 per year
• AUM above S$2 billion: minimum S$500,000 per year

Qualifying local business spending includes Singapore-based fund administration, audit, tax advisory, legal fees, and investment management fees paid to Singapore entities. This is designed to ensure that 13O family offices contribute meaningfully to Singapore’s financial services ecosystem.

Section 13U: Ultra-High-Net-Worth Tier Fund Tax Exemption (Formerly 13X)

Fund Vehicle Requirement

Section 13U is structure-agnostic. The fund vehicle can be incorporated anywhere — Singapore, Cayman Islands, BVI, Luxembourg, or another jurisdiction — as long as it is managed by a Singapore-based family office. This gives ultra-high-net-worth families significantly more flexibility in how they structure existing offshore assets without requiring a full redomiciliation.

Many large family offices use 13U specifically because they already have Cayman or BVI fund structures in place and do not wish to restructure their entire investment architecture simply to access Singapore’s tax exemption. See our guide on VCC vs Cayman SPC for a fuller discussion of how Singapore-domiciled and offshore structures compare.

AUM Threshold

The minimum AUM for Section 13U is S$50 million in designated investments at the end of each financial year. This is ten times the 13O threshold and effectively restricts 13U to ultra-high-net-worth families with substantial investable wealth.

Investment Professionals

Section 13U requires a minimum of three investment professionals, compared to two under 13O. At least one must be a non-family member — the same requirement as 13O. All must be Singapore tax-resident and meet the MAS salary floor. The additional IP requirement reflects MAS’s expectation that larger, more complex fund structures require deeper investment management teams.

Local Business Spending (LBS)

Section 13U applies the same tiered LBS structure as 13O:

• AUM below S$250 million: minimum S$200,000 per year
• AUM S$250 million to S$2 billion: minimum S$300,000 per year
• AUM above S$2 billion: minimum S$500,000 per year

At the S$50 million AUM entry level, 13U families face the same S$200,000 LBS floor as 13O families at the same AUM level — but with an additional investment professional requirement and a higher AUM hurdle. However, 13U families at S$50 million AUM will typically have substantially higher operational costs than 13O families at S$5 million AUM, making the S$200,000 LBS floor relatively easier to achieve in practice.

Side-by-Side Comparison Table

Which Scheme Should You Choose?

Choose Section 13O If:

• Your investable assets are between S$5 million and S$50 million
• You are comfortable incorporating a Singapore company or VCC as the fund vehicle
• You want a simpler, lower-AUM structure to begin building a Singapore family office
• You do not have existing offshore fund structures to preserve
• You plan to grow the fund over time and may eventually migrate to 13U

Choose Section 13U If:

• Your investable assets exceed S$50 million
• You have existing offshore fund structures (Cayman, BVI, Luxembourg) you wish to preserve
• You need the flexibility to hold assets across multiple jurisdictions without restructuring
• You can support a three-person Singapore-based investment team
• You are seeking the highest level of MAS recognition and credibility with institutional counterparts

The MAS Application Process

Both 13O and 13U require a formal application to MAS, including submission of a business plan that demonstrates:

• The family’s identity and the source of the investable assets
• The investment strategy and asset classes to be managed
• The proposed team of investment professionals and their qualifications
• How the local business spending requirements will be met
• Details of the fund vehicle and corporate structure

The approval process typically takes four to six months from initial submission to in-principle approval. MAS may request additional information at any stage. Families are strongly advised to engage professional advisers — including a licensed fund administrator, a Singapore law firm, and a tax adviser — before submitting their application. If you need legal advice on structuring your family office application, we can point you in the right direction.

Full details of MAS’s requirements are available on the MAS Fund Tax Incentive Scheme for Family Offices page.

Singapore as a Family Office Hub: The Wider Picture

Singapore’s 13O and 13U schemes exist within a broader ecosystem of reasons why ultra-high-net-worth families choose Singapore as their family office base. These include political and economic stability, an extensive tax treaty network, world-class banking infrastructure, a robust legal system, and a highly educated English-speaking talent pool.

For families considering relocating to Singapore alongside their family office, the Global Investor Programme (GIP) offers a direct pathway to Singapore Permanent Residence for qualifying investors — and can be pursued in parallel with the 13O or 13U family office application.

High-net-worth individuals often hold property assets as part of their broader wealth strategy. For those exploring property investment in Bangkok as part of an Asia-based wealth diversification strategy, there are compelling opportunities alongside a Singapore family office structure.

Beyond tax structuring, sound investment decisions and financial planning are the foundation of any successful family office — independent of which incentive scheme is chosen.

Conclusion: 13O for Accessibility, 13U for Scale

In practice, the choice between Section 13O and Section 13U is often straightforward: if you have more than S$50 million in investable assets and existing offshore fund structures, 13U is typically the right fit. If you are building a family office from a Singapore base with a more modest initial AUM, 13O provides the entry point — with the option to migrate to 13U as the fund grows.

Both schemes offer genuine, long-term tax exemptions on qualifying fund income, and both require meaningful substance in Singapore. The right choice depends on your AUM, your existing structure, your investment team capacity, and your long-term governance preferences.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

— The Editorial Team, Raffles Corporate Services