Why the fund incentives matter for digital assets

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Singapore's fund industry rests on three statutory exemptions. Sections 13D, 13O and 13U of the Income Tax Act 1947 exempt "specified income" derived by an approved fund from "designated investments", provided the fund is managed by a Singapore-based fund manager and meets the conditions that MAS sets. Without an exemption a fund that is tax-resident in Singapore would pay 17 per cent on its trading profit. A fund that buys and sells assets frequently is a trader under the badges analysis of Chapter I. With an exemption the fund pays nothing on the specified income regardless of its trading pattern. For a digital-asset fund the exemptions matter more than for a long-only equity fund, since the trading intensity of most crypto strategies makes the capital-gains argument weak and the exemption the only reliable shield.¹

The three schemes were extended by Budget 2024 to 31 December 2029 and their conditions revised by MAS Circular FDD Cir 10/2024 of 1 October 2024 with effect from 1 January 2025. Budget 2025 and the circulars that followed made further adjustments. The state of the conditions on 30 June 2026 is set out below.²

Notes

Income Tax Act 1947 (2020 Rev. Ed.), ss. 13D (formerly 13CA), 13O (formerly 13R) and 13U (formerly 13X); Income Tax (Exemption of Income of Prescribed Persons Arising from Funds Managed by Fund Manager in Singapore) Regulations 2010 and the parallel regulations for ss. 13O and 13U. The sections were renumbered in the 2020 Revised Edition of the Act, in force 31 December 2021. ↩
MAS Circular FDD Cir 10/2024 of 1 October 2024 (revised conditions for ss. 13D, 13O and 13U with effect from 1 January 2025), as summarised in Deloitte Singapore, Tax Bytes, 3 October 2024. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

All Singapore law advice is provided through KGP Legal LLC, an established and duly licensed firm of Singapore advocates and solicitors.

KGP Legal LLC is a medium-sized law firm in Singapore that is capable of providing the full range of legal services and corporate administration work. Please contact me directly at [email protected] if you need any further information.

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SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

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