Singapore VCC insights
VCC 13U Enhanced-Tier (Application and Conditions): Common Mistakes and Rejection Reasons
Short answer: A VCC 13U enhanced-tier application usually fails because the single family office falls short of the higher bar: at least S$50 million in Designated Investments, at least 3 qualifying investment professionals (one not a family member), the tiered spending test and the capital deployment requirement. Each must hold at application and throughout the incentive period. Section 13U is a different scheme from the fund-industry Enhanced-Tier Fund scheme.
Key facts at a glance
- Section 13U requires at least S$50 million in Designated Investments at application and throughout the incentive period.
- The fund must employ at least 3 investment professionals, with at least 1 who is not a family member of the beneficial owners.
- Each professional must earn more than S$3,500 a month, spend more than 50% of their time on the qualifying activity, and be a Singapore tax resident.
- Spending is tiered by AUM: S$200,000 below S$50 million, S$500,000 from S$50 million to under S$100 million, and S$1 million at S$100 million or more, with a S$200,000 local business floor.
- The capital deployment requirement is the lower of S$10 million or 10% of AUM in eligible investments.
- A private banking account with a MAS-licensed financial institution is required.
- Section 13U of the Income Tax Act 1947 provides the exemption for qualifying single family office funds.
This article is general information only and is not legal advice. For matters needing legal advice, we work with a panel of experienced Singapore law firms.
The VCC 13U enhanced-tier route is the higher tier of MAS’s two single family office schemes. It carries more headcount and a larger asset test than Section 13O, and the review is correspondingly stricter. This article lists the mistakes we see most often so that you can fix them before filing. Start with our complete 2026 guide to VCC 13U and the planning note on Section 13U family office planning; for the lower tier, see our companion piece on VCC 13O common mistakes.
How does the VCC 13U enhanced-tier differ from 13O?
| Criterion | Section 13O | Section 13U |
|---|---|---|
| Designated Investments | At least S$20 million | At least S$50 million |
| Investment professionals | At least 2 (1 non-family) | At least 3 (1 non-family) |
| Local business spending | Tiered, minimum S$200,000 | Tiered, minimum S$200,000 |
| Capital deployment | Lower of S$10 million or 10% of AUM | Lower of S$10 million or 10% of AUM |
| Private banking account | Required | Required |
These figures come from MAS’s page on the fund tax incentive scheme for family offices. Confirm the version that applies to your submission date.
Which mistakes lead to a VCC 13U rejection?
Confusing 13U with the Enhanced-Tier Fund scheme
The name “enhanced-tier” is used loosely. Section 13U is the higher single family office scheme. The Enhanced-Tier Fund scheme under Section 13X serves a different fund category with its own conditions. Using the wrong criteria, or citing the wrong section in a submission, signals a weak understanding of the scheme.
Applying with assets that sit just above S$50 million
The S$50 million test must hold throughout the incentive period. A fund that applies at S$52 million and drops below S$50 million after a drawdown or market fall risks failing a continuing condition. Model downside scenarios, and consider whether Section 13O is the safer fit if the headroom is thin.
Hiring 2 professionals instead of 3
Section 13U needs 3, with at least 1 who is not a family member. Each must be a portfolio manager, research analyst or trader earning above S$3,500 a month with more than 50% of time on the qualifying activity, and each must be a Singapore tax resident throughout the period. A professional who starts after the application date does not repair the shortfall at that date. For work pass issues around these hires, see proving the Investment Professional role to MOM.
Treating spending as a one-off
Spending is measured for each Year of Assessment. A fund in the S$100 million tier needs a S$1 million total, of which at least S$200,000 must be local business spending, and the balance may include eligible donations and certain blended finance grants. Plan the budget at the start of the year, not at declaration time.
Capital deployment shortfalls
The lower of S$10 million or 10% of AUM must sit in eligible categories, such as listed equities, REITs, business trusts, ETFs, qualifying debt securities, certain non-listed funds distributed by licensed Singapore institutions, non-listed Singapore operating companies, climate-related investments and qualifying blended finance. Multipliers apply to some categories only.
What is the step-by-step process for a clean application?
- Compute Designated Investments at the application date and test the headroom above S$50 million.
- Recruit and document 3 investment professionals, with at least 1 non-family.
- Open the private banking account in the fund’s name.
- Set the local spending budget by Year of Assessment against the correct tier.
- Build the eligible investment schedule for the capital deployment requirement.
- File the preliminary submission and answer MAS queries promptly.
- Maintain the annual evidence file, as set out in our annual evidence file guide, and review the longer-term position in Section 13O and 13U after May 2026.
Which related points should family offices check?
Review AML/CFT duties in VCC AML/CFT compliance after MAS Circular IID 04/2025 and the wealth narrative in source of wealth documentation for MAS applications. For VCC fundamentals, refer to the MAS explainer on the VCC, ACRA and IRAS.
Frequently asked questions
Is the 13U investment test different from 13O?
Yes. The minimum Designated Investments is S$50 million for 13U against S$20 million for 13O, tested at application and throughout the incentive period.
How many investment professionals does 13U require?
At least 3, with at least 1 who is not a family member of the beneficial owners.
Is 13U the same as the Enhanced-Tier Fund scheme?
No. Section 13U is a single family office scheme. The Enhanced-Tier Fund scheme under Section 13X applies to a different category of fund.
Does the fund need its own bank account?
Yes. MAS requires a private banking account with a MAS-licensed financial institution at application and throughout the incentive period.
Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email hello@rafflescorporateservices.com. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
Last reviewed: 07 October 2026. The Editorial Team.