13O vs 13U for Singapore Family Office Setup

Section 13O is generally more suitable for a Singapore family office using an eligible Singapore-based fund vehicle with at least S$20 million in assets under management. Section 13U is an enhanced-tier incentive with a minimum AUM of S$50 million and greater flexibility over the fund vehicle’s legal form and tax residence.

The headline differences are not limited to AUM. Section 13O generally requires at least two investment professionals, while Section 13U requires at least three. Both schemes also impose local business-spending, capital-deployment, fund-management and ongoing compliance conditions.

Neither scheme is automatically better. The appropriate choice depends on the family’s assets, investment strategy, preferred fund vehicle, staffing capacity and ability to maintain the conditions after approval.

Most importantly, Sections 13O and 13U are fund tax-incentive schemes. They are not family-office licences, legal entities or immigration programmes.

13O vs 13U at a Glance

The following comparison reflects the Singapore government guidance available as at 3 September 2026.

Requirement	Section 13O	Section 13U
Official description	Onshore Fund Tax Exemption Scheme	Enhanced-Tier Fund Tax Exemption Scheme
Minimum AUM	S$20 million	S$50 million
Investment professionals	At least 2	At least 3
Fund structure	Intended for an eligible Singapore-based fund structure	Greater flexibility over the fund vehicle’s legal form and tax residence
Singapore fund manager	Required	Required
MAS approval	Required	Required
Local business spending	Tiered requirement, with a minimum of S$200,000	Tiered requirement, with a minimum of S$200,000
Capital deployment	Lower of S$10 million or 10% of AUM in eligible investments	Lower of S$10 million or 10% of AUM in eligible investments
Typical suitability	Families able to maintain a Singapore-based fund with the lower AUM and staffing thresholds	Larger families requiring greater structural flexibility and able to support the higher thresholds
Ongoing obligations	Conditions must continue to be monitored after approval	Conditions must continue to be monitored after approval

The figures above are only a high-level comparison. The detailed eligibility of a proposed fund and its investments must be checked against the applicable legislation, regulations, MAS requirements and conditions in the relevant incentive award.

The Singapore Economic Development Board’s current setup guide sets out the S$20 million and S$50 million AUM thresholds, the respective investment-professional requirements and the capital-deployment conditions. Singapore EDB guide to setting up a single family office

What Are Sections 13O and 13U?

Sections 13O and 13U are tax-incentive provisions under Singapore’s Income Tax Act 1947 for qualifying funds managed by a Singapore-based fund manager.

Where the relevant conditions are satisfied, the fund vehicle may receive an exemption on specified income derived from designated investments.

This distinction is important. The schemes do not create a blanket exemption for:

• Every form of investment income
• The single family office management company
• The family’s operating businesses
• Personal income received by family members
• Singapore immovable property income
• Every asset placed inside a fund vehicle

The tax position must therefore be examined at the level of each entity, income stream and investment.

A typical family-office arrangement may include:

1. A family ownership vehicle or trust;
2. A fund vehicle holding the investment portfolio;
3. A Singapore single family office providing investment-management functions;
4. An investment-management agreement between the fund and the single family office;
5. Banks, custodians, brokers and other service providers; and
6. Separate special-purpose vehicles for particular investments.

The correct legal and tax treatment depends on how these components are structured and operated.

How Section 13O Works

Section 13O is commonly considered by families that want to establish an eligible Singapore-based fund vehicle and can satisfy the S$20 million AUM threshold.

It may be suitable where:

• The family wants the fund structure to be based in Singapore
• The initial portfolio is above S$20 million but does not justify the scale of Section 13U
• The family can employ and retain at least two qualifying investment professionals
• The required investment decisions and fund-management functions will be carried out in Singapore
• The family can meet the local business-spending and capital-deployment conditions
• The family is prepared to maintain the required AUM and supporting records

Following changes effective from 1 January 2025, the Section 13O scheme was expanded to include eligible limited partnerships registered in Singapore. The detailed eligibility of a company, variable capital company, limited partnership or other proposed structure should still be checked before implementation. IRAS overview of the fund tax-incentive changes

Section 13O should not be selected merely because its entry thresholds are lower. If the family expects to use a structure that Section 13O cannot efficiently accommodate, or expects AUM and operational complexity to grow materially, Section 13U may deserve consideration from the beginning.

How Section 13U Works

Section 13U is the enhanced-tier fund tax-incentive scheme. It generally requires at least S$50 million in AUM and at least three investment professionals.

It may be suitable where:

• The family already manages a portfolio comfortably above S$50 million
• The proposed fund structure requires greater flexibility over legal form or tax residence
• The family uses multiple holding vehicles or a more complex investment architecture
• The family intends to maintain a larger Singapore investment-management operation
• The investment strategy involves several asset classes or jurisdictions
• The family can support the higher staffing, governance and operating requirements over the long term

Section 13U is not automatically preferable simply because the family meets the minimum AUM threshold. A family with more than S$50 million may still find Section 13O more appropriate if the proposed Singapore fund vehicle, staffing plan and investment strategy fit that scheme.

Similarly, a family should not choose Section 13U for perceived prestige. The additional structural flexibility is only valuable when the family has a commercial or operational need for it.

The Tax Incentive Applies to the Fund Vehicle

One of the most common sources of confusion is the assumption that the entire family office becomes tax-exempt after a Section 13O or Section 13U award.

The incentive applies to qualifying specified income derived by the approved fund from designated investments. It does not automatically exempt every entity connected with the family office.

The following items require separate analysis:

• Management fees received by the single family office
• Employment income paid to investment professionals
• Income from the family’s operating businesses
• Income from non-designated investments
• Singapore-sourced income outside the incentive
• Gains affected by other Singapore tax provisions
• Distributions made to family members
• Foreign tax, withholding tax and reporting obligations

Families should model the entire structure rather than evaluating the fund vehicle in isolation.

AUM Is an Ongoing Requirement

The AUM threshold should not be treated as a one-time application figure.

The family should determine:

• Which assets qualify for the AUM calculation
• Whether the value is based on net or gross assets under the applicable conditions
• Whether the portfolio contains designated investments
• How market movements may affect compliance
• How withdrawals and distributions will be managed
• Whether illiquid investments can be valued consistently
• How frequently AUM will be monitored
• Who will produce and approve the supporting records

MAS guidance confirms that if a Section 13O awardee falls below the required S$20 million AUM threshold, it cannot use the tax exemption for the affected basis period. It may use the exemption again in a subsequent period if the applicable conditions are restored. MAS guidance on maintaining Section 13O AUM

A family with AUM close to the minimum threshold should therefore consider an operating buffer. Establishing a structure that depends on consistently remaining just above the threshold may create avoidable compliance risk.

Investment Professionals Must Perform Genuine Investment Roles

Meeting the headcount requirement is not simply a matter of appointing employees with investment-related job titles.

MAS states that qualifying investment professionals are expected to work primarily as portfolio managers, research analysts or traders. Relevant responsibilities may include:

• Developing and implementing investment strategies
• Building and managing investment portfolios
• Conducting investment research and market analysis
• Making recommendations on investments
• Trading financial instruments
• Managing liquidity
• Structuring investment transactions

Roles focused mainly on administration, accounting, budgeting, cash-flow monitoring, tax support, legal documentation or trade settlement are not generally treated as qualifying investment-professional roles. MAS guidance on qualifying investment-professional functions

Before selecting Section 13O or Section 13U, the family should prepare:

• Job descriptions
• Reporting lines
• Delegated investment authority
• Employment arrangements
• Professional biographies
• Academic and professional qualifications
• Evidence of relevant investment experience
• An operating budget for maintaining the team

The higher Section 13U headcount requirement can materially affect annual operating costs. The comparison should therefore consider the real employment model rather than the minimum number alone.

Local Business-Spending Requirements

Both schemes apply tiered local business-spending requirements, with the minimum level beginning at S$200,000 under the current Singapore EDB guidance.

The applicable threshold depends on the scheme, AUM and relevant conditions. The family should determine which projected expenses qualify as local business spending instead of assuming that every cost connected with the structure will count.

Potential expenditure categories may include:

• Remuneration for eligible Singapore-based personnel
• Fund-administration expenses
• Accounting and tax-compliance expenses
• Corporate-secretarial support
• Audit expenses
• Technology and investment systems
• Singapore office expenses
• Fees paid to qualifying Singapore service providers
• Banking, custody and investment-related costs

The expense classification and supporting documents should be reviewed before relying on them for compliance purposes.

The operating budget should also distinguish between:

• Costs required to meet an incentive condition
• General family-office operating expenses
• Fund-level expenses
• Personal family expenses
• Costs incurred outside Singapore
• One-time setup costs
• Recurring annual costs

Capital Deployment Requirement

Under the current EDB guide, both Section 13O and Section 13U applicants are generally required to deploy the lower of:

• S$10 million; or
• 10% of the fund’s AUM

into eligible investments.

The eligible categories described by EDB include:

• Equities, REITs, business trusts or exchange-traded funds listed on MAS-approved exchanges
• Qualifying debt securities
• Non-listed funds distributed by licensed financial institutions in Singapore
• Investments in qualifying non-listed Singapore operating companies
• Qualifying climate-related investments
• Qualifying blended-finance structures with substantial Singapore involvement

An investment should not be counted merely because it has a superficial connection with Singapore. The asset, issuer, distribution arrangement and underlying business may need to satisfy specific conditions.

The capital-deployment plan should therefore be aligned with the family’s actual investment strategy. Making investments solely to satisfy an incentive condition, without an appropriate investment rationale, may create portfolio and governance problems.

13O and 13U Are Separate from the SFO Licensing Exemption

A family must distinguish between two regulatory questions:

1. Does the fund qualify for the Section 13O or Section 13U tax incentive?
2. Does the single family office qualify for an exemption from holding a capital markets services licence for fund management?

These are separate assessments.

Under Singapore’s revised single-family-office licensing-exemption framework, a qualifying single family office manages the assets of a single family and does not serve third-party customers or manage third-party money.

The current framework also includes requirements relating to:

• Filing a Notice of Commencement of Business with MAS
• Maintaining relevant accounts with an MAS-licensed bank
• Maintaining appropriate fund-vehicle banking arrangements
• Submitting annual returns
• Continuing to satisfy the exemption conditions

A Section 13O or Section 13U award does not automatically establish that the single family office satisfies the licensing exemption. Conversely, qualification for the licensing exemption does not automatically produce a Section 13O or Section 13U tax incentive. MAS guidance on the SFO licensing exemption

If the structure will manage money belonging to unrelated investors, friends, business partners or multiple families, it may fall outside the intended scope of a single family office and require a different licensing and fund-structuring analysis.

Can a VCC Use Section 13O or Section 13U?

A variable capital company may be considered for either Section 13O or Section 13U, subject to the applicable eligibility requirements.

However, the following concepts should not be confused:

• A VCC is a legal form for an investment fund
• Section 13O is a fund tax-incentive scheme
• Section 13U is a fund tax-incentive scheme
• A single family office is the organisation carrying out the family’s investment-management and related functions
• A fund manager’s licensing or exemption position is a separate regulatory matter

A family does not need to use a VCC merely because it is applying for Section 13O or Section 13U. The choice between a company, VCC, limited partnership, trust or another eligible vehicle should follow the investment, governance and ownership requirements.

IRAS confirms that VCCs may be considered for the Section 13O and Section 13U incentives. IRAS tax framework for VCCs

Which Scheme May Be More Suitable?

Family circumstances	Potential direction	Reason
AUM is above S$20 million but below S$50 million	Section 13O	Section 13U’s minimum AUM would not be met
AUM is only slightly above S$20 million	Review sustainability before applying	Market movements or withdrawals may affect ongoing compliance
AUM is comfortably above S$50 million	Compare both	Meeting the Section 13U threshold does not automatically make it the better structure
The family wants an eligible Singapore-based fund vehicle	Section 13O may be suitable	The onshore structure may align with the family’s operating model
The proposed fund requires greater legal-form or residence flexibility	Section 13U may be relevant	The enhanced-tier regime can accommodate a broader structural model
The family cannot maintain the required investment team	Neither may currently be suitable	Substance must be operationally sustainable
The family expects significant portfolio growth	Model both options	Initial simplicity should be compared with future restructuring costs
The structure will accept unrelated third-party money	Separate fund and licensing review	It may no longer operate as a qualifying single family office
The family wants the incentive primarily for immigration purposes	Reassess the objective	Sections 13O and 13U do not independently grant immigration status
The family cannot meet local spending or capital deployment conditions	Neither may currently be suitable	AUM alone is insufficient

Common 13O and 13U Planning Mistakes

Choosing based only on AUM

AUM is important, but it is not the entire assessment. Fund domicile, legal form, staffing, investment strategy, spending and future expansion must also be considered.

Assuming Section 13U is always better

Section 13U provides greater structural flexibility but requires a higher AUM threshold and more investment professionals. Additional complexity should serve a genuine purpose.

Treating the family office as tax-exempt

The incentive applies to qualifying income of the fund vehicle. Other entities and income streams require separate tax analysis.

Hiring nominal investment professionals

Employees must perform genuine qualifying investment functions. Administrative or accounting roles should not be relabelled as investment roles.

Ignoring post-approval obligations

A family may be ready to submit an application without being ready to operate the structure for several years. AUM, staffing, spending, investment and reporting conditions require ongoing monitoring.

Combining family and third-party capital

Managing unrelated investor money may change the licensing and compliance position. External capital should be identified before the structure is finalised.

Selecting investments only to meet the capital-deployment test

The deployment plan should remain consistent with the family’s mandate, risk limits and governance arrangements.

Assuming approval is guaranteed

No professional adviser can guarantee a Section 13O or Section 13U outcome. The authorities may request clarification, additional evidence or structural changes.

Documents and Information to Prepare

A readiness review will typically require information concerning:

Family and ownership

• Family tree and relevant family relationships
• Ultimate beneficial owners
• Trust, foundation or holding-company arrangements
• Proposed ownership of the fund and single family office
• Existing succession and governance documents

Assets and investments

• Current portfolio statements
• Asset-location and ownership schedules
• Valuation information
• Proposed investment strategy
• Expected asset transfers
• Designated-investment analysis
• Capital-deployment plan

Investment team

• Proposed organisational chart
• Job descriptions
• Employment arrangements
• Professional biographies
• Qualifications and investment experience
• Delegated investment authority

Financial and operating model

• Setup budget
• Annual operating budget
• Local business-spending forecast
• Fund-administration process
• Accounting and valuation policies
• Banking and custody arrangements
• Reporting and approval procedures

Compliance

• Source-of-wealth and source-of-funds information
• KYC/AML documentation
• Tax-residency analysis
• CRS and FATCA classifications
• Licensing or exemption assessment
• Annual compliance calendar
• Record-retention arrangements

Application and Implementation Process

Step 1: Define the family-office mandate

Determine whether the principal objectives are investment management, succession, wealth consolidation, philanthropy, governance or a combination of these.

Step 2: Map the family and assets

Identify the beneficial owners, family relationships, asset locations, investment entities and any third-party interests.

Step 3: Compare 13O and 13U

Model the proposed vehicle, AUM, investment-professional headcount, business spending and capital deployment under both schemes.

Step 4: Design the structure

Confirm the ownership vehicle, fund entity, single family office, management agreement and any special-purpose vehicles.

Step 5: Build the Singapore operating model

Prepare the staffing plan, investment process, delegated authority, office arrangements, service-provider model and operating budget.

Step 6: Review tax and regulatory eligibility

Separate the fund tax-incentive analysis from the single-family-office licensing-exemption analysis.

Step 7: Prepare supporting evidence

Compile the ownership, AUM, investment, employment, expenditure, banking and compliance documents.

Step 8: Submit and respond to questions

The current EDB guide states that applicants can generally expect an application outcome from MAS within three months. This should not be treated as a guaranteed end-to-end setup timeline because preliminary planning, documentation, bank onboarding and regulatory questions may require additional time.

Step 9: Implement ongoing controls

After approval, monitor AUM, investment-professional roles, business spending, capital deployment, material changes and annual reporting.

MAS guidance indicates that changes involving beneficial owners, SFO personnel and intermediate ownership entities may need to be notified. MAS guidance on reporting changes after approval

Frequently Asked Questions

What is the main difference between 13O and 13U?

The main differences are the minimum AUM, number of investment professionals and structural flexibility. Section 13O has a minimum AUM of S$20 million and requires at least two investment professionals. Section 13U has a minimum AUM of S$50 million and requires at least three.

Is 13U better than 13O?

Not automatically. Section 13U may suit larger or more structurally complex funds, while Section 13O may be more efficient for an eligible Singapore-based fund that does not require Section 13U’s additional flexibility.

Can a family with more than S$50 million use 13O?

Potentially, subject to the applicable requirements. Exceeding S$50 million does not automatically require the family to use Section 13U.

Does a Singapore family office need 13O or 13U?

No. A family office can be established without either tax incentive. However, its corporate, tax, licensing and operational position must still be assessed.

Does approval make all family-office income tax-free?

No. The incentive applies to specified income derived by the qualifying fund from designated investments. It is not a blanket exemption for every entity or type of income.

Can a VCC apply for 13O or 13U?

A qualifying VCC may be considered for either scheme. The VCC structure and tax-incentive application remain separate legal and tax questions.

Can a 13O fund later move to 13U?

A future change may be possible, but it should not be assumed to occur automatically. The family would need to assess the applicable approval process, restructuring implications and conditions in force at that time.

Can friends or external investors invest through the family office?

Introducing unrelated third-party money may affect the single-family-office licensing exemption and require a different fund and regulatory structure. This should be reviewed before accepting external capital.

Do 13O or 13U guarantee Singapore permanent residence?

No. Sections 13O and 13U are fund tax-incentive schemes. Immigration and permanent-residence programmes have separate eligibility requirements and assessment processes.

Can an adviser guarantee approval?

No. A responsible provider can assess readiness, coordinate the application and identify gaps, but cannot guarantee the decision of the relevant authorities.

How Jenga Anderson Global Singapore Can Help

Jenga Anderson Global Singapore supports family-office structure planning, Section 13O and Section 13U readiness assessment, fund and VCC workstreams, fund administration and related governance within an agreed scope.

The work may include:

• Comparing the proposed structure against 13O and 13U requirements
• Coordinating ownership and structure documentation
• Supporting fund and single-family-office setup
• Preparing accounting and administrative operating processes
• Coordinating KYC/AML documentation
• Supporting governance and ongoing compliance calendars
• Coordinating with appropriately qualified professionals where regulated legal, tax or investment advice is required

The appropriate structure should be determined by the family’s actual assets, investment mandate and capacity to maintain the operating requirements—not by a preference for one incentive label.

Contact Jenga Anderson Global Singapore to review your proposed family-office structure and assess its readiness for Section 13O or Section 13U.