Singapore VCC insights

Hong Kong FIHV vs Singapore 13O and 13U: The Tax Tests Compared Line by Line

By VCC Editorial Team · Published 13 October 2026 · Updated 16 October 2026

Short answer: Hong Kong’s FIHV concession is a self-elected 0% profits tax rate with a HK$240 million asset floor, two local staff and HK$2 million of local spending. Singapore’s 13O and 13U schemes need MAS approval, S$20 million or S$50 million in designated investments, two or three investment professionals, tiered spending and local investment. Hong Kong’s 2026 Bill is not yet law.

This article is general information only and is not legal, tax or investment advice. For matters needing legal advice, we work with a panel of experienced Singapore law firms.

Advisers comparing Hong Kong FIHV vs Singapore 13O treatment usually find the headline numbers matter less than how each test is measured, when, by whom, and what happens on failure. This article sets the regimes side by side, with each point tied to the Hong Kong Inland Revenue Department (IRD), Legislative Council (LegCo), Monetary Authority of Singapore (MAS) or Singapore Statutes Online text it comes from. All sources were checked on 13 October 2026. For the broader licensing, residency and banking comparison, see our earlier piece on family office Singapore vs Hong Kong; this one stays with the tax tests.

Where is Hong Kong’s 2026 Bill on 13 October 2026?

It is still a Bill, with no Ordinance number or commencement date. The 2023 FIHV rules remain the law.

The Bill was gazetted on 12 June 2026 and had its first reading on 24 June 2026. On 12 August 2026 the Financial Services and the Treasury Bureau (FSTB) said the Bill was “currently under scrutiny by the LegCo’s Bills Committee, with the clause-by-clause examination completed”, and that the Government targets resuming the second reading debate within the second half of 2026. The IRD’s What’s New page, read on 13 October 2026, lists no passage announcement up to 12 October 2026. The LegCo Legal Service Division report (LC Paper No. LS35/2026) states that the Bill, if passed, “would come into operation on the day on which it is published in the Gazette as an Ordinance”, and that its amendments would apply to years of assessment beginning on or after 1 April 2025.

On 12 June 2026 the IRD also announced a transitional administrative measure: taxpayers eligible under the Bill may file 2025/26 returns on that basis and must notify the IRD in writing of any revision needed once it is enacted.

How do the core tests compare in a single table?

Both regimes exempt a locally managed family vehicle, but Hong Kong relies on statutory self-qualification and Singapore on an approval whose conditions can be varied.

Test	Hong Kong FIHV (current law)	Singapore 13O / 13U (SFO funds)
Legal basis	Ord. No. 8 of 2023, in operation 19 May 2023; Schedules 16C and 16E to Cap. 112 [IRD FIHV guidance]	Income Tax Act 1947 ss 13O, 13U; conditions in the letter of approval and MAS FDD Circular 05/2026 [s 13O(1), s 13U(1)]
Vehicle	Any entity, in or outside Hong Kong, including a company, partnership or trust, normally managed or controlled in Hong Kong [IRD]	13O: company incorporated and resident in Singapore [s 13O(1)]. 13U: an approved person, partner, trustee or taxable entity, not an individual [s 13U(5)]
Minimum assets	HK$240 million aggregate net asset value of Schedule 16C assets at the basis period end, or at either of the two preceding period ends [IRD]	13O: S$20 million; 13U: S$50 million, in designated investments at application and at the end of each basis period [MAS Circular paras 4.3(b), 4.4(b)]
Local investment professionals	At least two qualified full-time employees in Hong Kong; outsourcing to the SFO permitted [IRD]	13O: two; 13U: three; at least one non-family; more than S$3,500 a month, more than 50% of time, Singapore tax resident [MAS family office tax schemes page]
Local spending	At least HK$2 million operating expenditure in Hong Kong, commensurate with the activities [IRD]	S$200,000 below S$250 million; S$500,000 up to S$2 billion; S$1 million above [MAS page]
Local investment	No local investment condition in the IRD guidance [IRD]	Lower of 10% of assets in designated investments or S$10 million, in three categories, with 2x multipliers for some [MAS page]
Qualifying investments	Schedule 16C classes, including securities, private company shares, futures, OTC derivatives and deposits; incidental transactions capped at 5% [IRD]	Designated investments; investment in the family’s operating businesses does not count towards the minimum [MAS Circular 05/2026, footnote 20]
Anti-round-tripping	Anti-round tripping provisions, excluding resident individuals, the eligible SFO and qualifying interposed entities [IRD]	Penalty on an owner whose stake exceeds a prescribed percentage, computed on the fund’s income at the s 43(1)(a) rate [s 13O(3)]
Approval or self-assessment	Irrevocable written election; advance ruling available but optional [IRD]	Approval by the Minister or an authorised body is a precondition [s 13O(1), s 13U(5)]
Retrospectivity	Concession applies from years of assessment commencing on or after 1 April 2022, before the Ordinance came into operation [IRD]	Approval may be revoked from a date before the non-compliance [s 13O(7)(ca), s 13U(4)(cc)]
Sunset	No end date appears in the IRD guidance [IRD]	No new approvals after 31 December 2029 [s 13O(2); s 13U(2)]

How is the minimum asset test measured in each hub?

Hong Kong tests net asset value at each basis period end with a two-year look-back; Singapore tests designated investments at application and each basis period end, with no look-back.

The IRD guidance on FIHVs says that if aggregate net asset value falls below HK$240 million for the subject year, the threshold is still met if it was at least HK$240 million at the end of either of the two preceding basis periods. The measure aggregates all of the family’s FIHVs managed by the same eligible single family office (SFO), including assets held by family-owned special purpose entities (FSPEs).

Singapore has no equivalent cushion. Under MAS FDD Circular 05/2026, a 13O SFO fund must hold at least S$20 million in designated investments at the point of application and at the end of each basis period to claim exemption for the corresponding year of assessment, and a 13U fund at least S$50 million on the same basis. The consequence of a shortfall is also different: under the circular, failing an economic condition in a basis period generally costs the exemption for that period rather than ending the award. Our note on family office minimum AUM in Singapore covers the separate licensing exemption, whose published conditions contain no asset floor.

The asset bases also differ. Hong Kong counts Schedule 16C assets, which include shares and debentures of a private company, subject to the private company tests discussed below. Singapore’s circular states that investment in the operating businesses of the family cannot be counted towards the minimum. A family concentrated in its own operating group may find Hong Kong’s base wider.

What substance does each regime require?

Hong Kong asks for two qualified full-time employees and HK$2 million of local spending. Singapore asks for qualifying investment professionals, tiered spending and local investment.

Hong Kong frames substance around the FIHV’s core income generating activities, which may be outsourced to the eligible SFO if not to circumvent the rule. The IRD says it “will not apply a mechanical multiplication or division exercise”; the figures are floors, and staff and spending must be commensurate with the activity.

Singapore’s conditions are more prescriptive but more predictable. A qualifying investment professional is a portfolio manager, research analyst or trader meeting the pay, time and tax residence tests in the table. Under the circular, a new 13O fund may apply with one professional and a 13U fund with two, but the full complement must be in place by the end of the first year of assessment’s basis period, or the award is revoked from commencement. The capital deployment requirement then directs the lower of 10% of assets or S$10 million into instruments listed on approved exchanges, distributed by MAS-licensed institutions, or non-listed Singapore operating companies. Hong Kong has no comparable test.

Hong Kong FIHV vs Singapore 13O: how do the anti-abuse rules differ?

Hong Kong polices the asset side and Hong Kong residents; Singapore polices large investors in a 13O company through a statutory penalty.

In Hong Kong, profits from a private company investment are taxed if that company holds more than 10% of its assets in Hong Kong immovable property (excluding infrastructure). Where that test is passed but the holding is under two years, the concession is denied if the FIHV controls the company and more than 50% of its assets are short-term assets held for under three years. Failure taints only that transaction. The anti-round tripping provisions exclude resident individuals, the eligible SFO and a passive interposed entity where the family holds at least 95% of the FIHV, and a main-purpose anti-avoidance rule also applies.

In Singapore, section 13O(3) of the Income Tax Act 1947 makes a person who, with associates, owns more than a prescribed percentage of a 13O company’s securities liable to a penalty computed by formula on the company’s income and the section 43(1)(a) tax rate. Section 13O(5) looks through a non-bona fide entity to the person behind it. Section 13U contains no equivalent owner-penalty subsection. The prescribed percentage sits in regulations, so check it rather than assume a figure.

Election or approval: who decides whether the vehicle qualifies?

In Hong Kong the taxpayer elects and bears the risk on audit; in Singapore approval comes first and conditions can change later.

The FIHV election is made in writing, applies to all later years and is irrevocable. An advance ruling is optional; the IRD lists the evidence it expects, including a family tree, group chart and investment management agreement.

In Singapore, exemption under section 13O applies only to a company “approved by the Minister or an authorised body”, and section 13O(1B) allows the Minister or authorised body to add, vary or delete conditions at any time, including for approvals granted before that power commenced. The circular’s new SFO conditions apply to awards approved on or after 1 August 2026. Our guides to 13O application mistakes and the annual evidence file for 13O and 13U cover the Singapore process.

What would the Hong Kong Bill change for FIHVs if enacted?

It would widen qualifying investments, remove the 5% incidental cap, give FSPEs full exemption and narrow the private company tests. It would not, on the official papers, change the HK$240 million threshold or the substance floor.

The LegCo Legal Service Division summarises clause 26 as amending Schedule 16E “e.g. expanding the scope of qualifying investments, removing the 5% incidental transactions threshold and granting full profits tax exemption for FSPEs”. The FSTB paper of 2 March 2026 applies the following fund-regime proposals to FIHVs, all subject to enactment:

1. Qualifying investments extended to immovable property outside Hong Kong, carbon credits and emission allowances, insurance-linked securities, equity interests in non-corporate private entities, loans including private credit, digital assets, precious metals and specified commodities.
2. All profits from qualifying investments eligible, replacing the 5% incidental transactions cap, with an exclusion list that would capture income from private companies trading or developing Hong Kong property.
3. FSPEs exempt in full regardless of the FIHV’s ownership percentage.
4. The private company tests confined to equity investments in private companies and non-corporate private entities.
5. Specific anti-round tripping rules for profits from loans, aimed at financial institutions, insurers, money lenders and intragroup financiers holding 20% or more of the vehicle, or having control or significant influence.

None of the official papers we read moves the FIHV threshold from a net asset value test; the only new HK$240 million reference concerns single-investor funds. Model the current test until the enacted text is published.

How do retrospectivity and sunset risk compare?

Hong Kong legislated backwards in the taxpayer’s favour in 2023 and proposes to do so again; Singapore’s schemes stop taking new approvals after 31 December 2029 and can be revoked with backdated effect for non-compliance.

The 2023 Ordinance came into operation on 19 May 2023 but applied from years of assessment commencing on or after 1 April 2022; the Bill would reach back to years beginning on or after 1 April 2025.

Singapore’s retrospection runs the other way. Sections 13O(7)(ca) and 13U(4)(cc) allow regulations to revoke an approval from a date before the non-compliance, and sections 13O(7A) and 13U(4A) allow the Comptroller to raise assessments accordingly. On sunset, section 13O(2) bars approvals after 31 December 2029, and section 13U sets the same closing date. The circular says funds awarded by then keep the exemption for the life of the fund if they meet the conditions, and that the Government will review the schemes before expiry. For SFOs still adapting to the separate licensing changes, see our note on the 15 June 2027 transition.

Frequently asked questions

Has Hong Kong’s 2026 FIHV Bill been passed?

Not as at 13 October 2026. The Bills Committee completed clause-by-clause examination by 12 August 2026 and the Government targets resuming the second reading debate in the second half of 2026. No Ordinance number exists yet.

Can a Hong Kong FIHV count shares in the family’s operating company towards HK$240 million?

Schedule 16C includes shares of a private company, so they are specified assets. Profits from them remain subject to the immovable property, holding period and control tests. Singapore’s circular excludes family operating businesses from the 13O and 13U asset minimum.

Does Singapore require family members to be excluded as investment professionals?

No. At least one required professional must be a non-family member; the others may be family. A new 13O fund may apply with one professional, family or not, if the second is hired by the end of the first year’s basis period.

What happens to a Singapore 13O fund after 31 December 2029?

No new approvals can be granted after that date. Funds already approved continue to enjoy the exemption for the life of the fund, provided they keep meeting the conditions, which MAS may vary.

Sources

• Inland Revenue Department: Tax Concessions for Family-owned Investment Holding Vehicles
• IRD press release, 12 August 2026: FSTB on the 2026 Bill
• Income Tax Act 1947, section 13O (Singapore Statutes Online)
• MAS: Fund Tax Schemes for Family Offices

Raffles Corporate Services helps families and their tax advisers set up Singapore single family offices and 13O or 13U fund vehicles, including VCCs, and keeps them compliant year to year. Email hello@rafflescorporateservices.com or Call/SMS/WhatsApp +65 8501 7133, or visit Raffles Corporate Services.

Last reviewed: 13 October 2026. The Editorial Team, Variable Capital Companies Act.

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