Singapore VCC insights

13O Minimum AUM for Fund Managers: The S$5 Million Entry Test After the 2026 Circular

By VCC Editorial Team · Published 5 November 2026

Short answer: A non-SFO fund applying for section 13O or 13OA needs S$5 million of assets under management in designated investments, tested once: at application, or by the end of the basis period of the award’s third year of assessment. MAS FDD Circular 05/2026 removed the annual minimum AUM condition for non-SFO funds, retroactively from 1 January 2025.

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.

The 13O minimum AUM fund manager question changed on 31 July 2026, when the Monetary Authority of Singapore (MAS) issued FDD Circular 05/2026, “Tax Incentive Schemes for Funds”. For funds run by licensed or exempt managers for third-party investors (non-SFO funds), the size test is now a one-time entry gate. Much commentary still mixes in the higher family office figures, which are tested every year. This guide covers the fund manager’s position only, using primary sources checked on 28 October 2026 and re-checked on 5 November 2026.

What is the 13O minimum AUM for a fund manager’s non-SFO fund?

S$5 million of assets under management invested in designated investments, measured at the point of application. A fund that has not reached S$5 million when it applies has until the end of the basis period of the third YA of its award to get there.

Paragraph 3.4(b) of the circular states that a section 13O or 13OA non-SFO fund “with award commencing on or after 1 January 2025 must have at least S$5 million in AUM in DI at the point of application”, the “S$5m AUM in DI entry condition”. Section 13O covers funds that are companies incorporated and resident in Singapore, including a variable capital company (VCC): the IRAS e-Tax Guide “Tax Framework for Variable Capital Companies” (Fourth Edition, 22 April 2026) lists sections 13O and 13U among the incentives a VCC may be considered for. Section 13OA extends the scheme to limited partnerships registered under the Limited Partnerships Act 2008.

Only investments that qualify as designated investments count: since 1 January 2025 a fund’s AUM means “AUM in DI”, the value of its investments that qualify as DI under Annex 3 of the circular. From 1 August 2026 the 5% cap on physical investment precious metals in the DI list has also gone (paragraph 7.2).

Was the annual minimum AUM condition removed, and from when?

Yes. For non-SFO funds under sections 13O, 13OA and 13U, MAS removed the condition to maintain an annual minimum AUM in DI, and the removal is retroactive to 1 January 2025.

Paragraph 3.2 of the circular reads: “the condition for non-SFO funds to maintain annual minimum AUM in DI under the S13O, S13OA and S13U schemes will be removed. The removal of the annual minimum AUM in DI condition will be retroactive, taking effect from 1 January 2025.” Paragraph 3.4(b) adds that “there is now no annual minimum AUM in DI condition to qualify for the tax exemption in subsequent YAs”.

The retroactive date matters for funds awarded in 2025 or early 2026: on the circular’s terms, a dip in AUM in DI at a 2025 year end no longer costs the exemption on AUM grounds. For awards that commenced before 1 January 2025, Annex 6A paragraph 2(c) states plainly: “There is no AUM in DI condition for such funds.” Where an older letter of award contains its own size condition, check the position with MAS: paragraph 8.2 makes the Annex 13 standard terms prevail over inconsistent letter terms from 1 August 2026, but Annex 13 was not in the text we could extract, and we have not confirmed how it treats a legacy AUM clause.

AUM still matters: the local business spending tier is read from AUM in DI at each basis period end.

How does the S$5 million entry grace period work in practice?

The fund has until the end of the basis period of its third YA to reach S$5 million; once it is met, it does not have to be tracked again. If it is not met by that date, the award is revoked from the day it started, not just for the future.

The circular’s own example (footnote 14) uses a fund with a 31 December year end and an award commencing on 1 July 2027. Its first three basis periods end on 31 December 2027, 2028 and 2029. If it reaches S$5 million by 31 December 2027, “it is not required to track and meet the S$5m AUM in DI entry condition in 2028 and 2029”. If it has still not reached S$5 million by 31 December 2029, its award “will be revoked retrospectively from 1 July 2027”.

Retrospective revocation is the real risk for an emerging manager, so the fundraising plan should reach S$5 million in DI well before the third basis period closes. The other conditions depend on when the award starts:

Award commencement	S$5 million entry test	Investment professionals	Spending
Before 1 January 2025	No AUM in DI condition	2 qualifying IPs from YA 2028	S$200,000 total business spending before YA 2028; tiered local business spending from YA 2028
1 January 2025 to end of the basis period for YA 2027	By end of basis period of third YA of the award	2 qualifying IPs from YA 2028	S$200,000 total business spending before YA 2028 (prorated in a part year); tiered local business spending from YA 2028
Basis periods relating to YA 2028 onwards	By end of basis period of third YA of the award	2 qualifying IPs at application and throughout each basis period	Tiered local business spending from the first YA

A worked illustration, applying Annex 6A paragraph 2(a) and the proration rule in Annex 6 paragraph 2 (our arithmetic): a 13O VCC with a 31 December year end and an award commencing on 1 November 2026 falls in the middle row. For YA 2027 the S$200,000 total business spending condition is prorated to about S$33,425 (61 of 365 days). From YA 2028 (the 2027 basis period) it needs 2 IPs and tiered local spending. The S$5 million must be reached by 31 December 2028, the end of the basis period for its third YA (YA 2029).

What does the 13U entry test require of a fund manager?

S$50 million in AUM in DI at the point of application, with no annual minimum afterwards. The circular states no third-year grace period for 13U.

Paragraph 3.6(b) sets the S$50 million figure. Under Annex 7 paragraph 11, a real estate, infrastructure, private equity, debt or credit fund operating on committed capital is regarded as meeting the minimum at application if it has secured at least that amount in commitments; the commitments must be legally enforceable, part of the manager’s fees must be charged on committed capital including undrawn amounts, and annual declarations are required. Under Annex 7 paragraph 6, a 13U structure adding a feeder fund or special purpose vehicle (SPV) must meet S$50 million again at that application. We found no equivalent committed capital concession for section 13O in Annex 6.

Which fund managers qualify, and how many investment professionals are needed?

A Singapore fund management company that holds a capital markets services licence for fund management under the Securities and Futures Act 2001, or is exempt from holding one (for 13O and 13OA, a manager approved by the Minister also qualifies). It must employ 2 qualifying investment professionals (IPs) for 13O and 13OA, or 3 for 13U.

The licensing limb is in Annex 6 paragraph 1(c) and Annex 7 paragraph 1(a). Non-SFO funds must have capital from third-party investors, or a bona fide intention to raise it (paragraph 3.1); third-party investors are those who are not a “related party” of the manager under section 2 of the Income Tax Act 1947. If a fund relies on intention and cannot later evidence third-party capital, MAS may revoke the award. A 13O fund must also be Singapore resident (generally, board meetings where strategic decisions are made are held in Singapore) and use a Singapore-based fund administrator. Since 1 January 2025 it need not be newly set up, but all investments must be acquired on market terms (paragraph 5.1(a)).

An IP is a portfolio manager, research analyst or trader who is a Singapore tax resident, earns more than S$3,500 a month and engages substantially in fund management (footnote 13). Headcount is tested at the manager, so one manager can support several funds. The non-SFO test has no family or non-family split. Managers hiring IPs from abroad should plan Employment Pass timing; Singapore Employment Agency handles pass applications for fund staff.

What else must a non-SFO fund meet after entry?

Local business spending, the 30/50 investor rule, and the general conditions in its letter of award. A closed-end fund may elect a cumulative spending test.

Local business spending is tiered by AUM in DI at each basis period end: S$200,000 below S$250 million, S$300,000 from S$250 million to below S$2 billion, and S$500,000 from S$2 billion (Tables A and B); our guide to the 13O and 13U local business spending tiers covers composition and shortfalls. For 13O and 13OA funds, a resident non-individual investor holding more than 30% (fewer than 10 investors) or 50% (10 or more investors) faces a financial penalty unless it is a qualifying investor (Annex 6 paragraphs 3 to 7). Non-SFO funds with awards commencing on or after 1 January 2025 may irrevocably elect closed-end fund treatment, which tests spending cumulatively to the tenth incentive year (paragraphs 3.9 to 3.11); see our analysis of when a non-SFO fund should elect closed-end treatment.

Failing an economic condition costs the exemption for that basis period only (paragraph 2.4); failing a non-economic condition, such as not producing documents on request, can lead to permanent revocation. Our note on the annual evidence file for 13O and 13U lists what to keep.

How do SFO fund conditions differ from non-SFO fund conditions?

SFO funds face a higher, recurring AUM test and three conditions that non-SFO funds do not.

Condition	Non-SFO fund (licensed or exempt manager)	SFO fund (awards approved on or after 1 August 2026)
Manager	Fund management company licensed or exempt under the Securities and Futures Act 2001	SFO exempt under paragraph 5(1)(ba), Second Schedule, Securities and Futures (Licensing and Conduct of Business) Regulations
Investors	Third-party capital, or bona fide intention to raise it	Assets primarily from members of the same family
AUM in DI, 13O and 13OA	S$5 million at entry, grace to third YA; no annual test	S$20 million at application and at the end of each basis period
AUM in DI, 13U	S$50 million at application; no annual test	S$50 million at application and at the end of each basis period
Investment professionals	2 (13O and 13OA) or 3 (13U)	2 or 3, at least 1 not a family member; may apply with 1 or 2 and reach full complement by end of first YA basis period
Spending tiers	S$200,000 / S$300,000 / S$500,000 local business spending	S$200,000 / S$500,000 / S$1,000,000, partly through eligible donations and grants above an LBS floor
Capital deployment requirement	None listed in Annexes 6A and 7A	Lower of 10% of AUM in DI or S$10 million in specified investments
Banking	None listed in Annexes 6A and 7A	Private banking account with an MAS-licensed financial institution
Closed-end election	Available	Not available (Annex 8 covers non-SFO funds)

The SFO column follows paragraphs 4.3 to 4.5 of the circular and the MAS page on fund tax schemes for family offices. See also our family office minimum AUM guide and the 13O vs 13U decision guide for a new SFO fund.

How should a fund manager plan a 13O application around the S$5 million test?

Treat the S$5 million as a fundraising milestone with a retrospective deadline, and settle elections before applying.

1. Confirm the manager’s licence or exemption and enough qualifying IPs for the award’s cohort.
2. Choose the vehicle: VCC or company (13O), limited partnership (13OA), or a 13U fund or structure if S$50 million is available at application.
3. Map the year end against the likely award date to fix the third-YA deadline, and plan to reach S$5 million in DI with a margin.
4. Check that seed assets qualify as DI and were acquired on market terms.
5. Record the third-party investor position or the evidence of intended external fundraising.
6. Decide on closed-end treatment at the outset; switching later means revoking the award and reapplying.
7. Budget local business spending by tier, prorated for the first part-year.

For a first view of set-up and running costs, see the Raffles Corporate Services free tools.

Frequently asked questions

Does a 13O fund lose its exemption if AUM falls below S$5 million after entry?

Not on AUM grounds. Once the S$5 million entry test is met, the fund need not track it again. Spending and IP conditions still apply each basis period.

Is the S$5 million figure the same for 13U?

No. A 13U non-SFO fund needs S$50 million of AUM in DI at the point of application. Real estate, infrastructure, private equity, debt and credit funds operating on committed capital may meet it through enforceable commitments.

Does the S$20 million figure apply to fund managers?

No. S$20 million is the 13O and 13OA threshold for SFO funds, tested at application and at the end of each basis period. It does not apply to non-SFO funds run by licensed or exempt managers.

What happens if the fund misses the third-year deadline?

The award is revoked with effect from the award commencement date. Income previously treated as exempt for the earlier basis periods would then lose the exemption.

Sources

• MAS FDD Circular 05/2026, Tax Incentive Schemes for Funds (31 July 2026)
• MAS: Fund Tax Schemes for Family Offices
• IRAS e-Tax Guide: Tax Framework for Variable Capital Companies (Fourth Edition, 22 April 2026)
• Income Tax Act 1947 (Singapore Statutes Online)

Raffles Corporate Services helps fund managers with VCC incorporation, 13O and 13U application preparation and ongoing compliance, and supports family offices on set-up. Email hello@rafflescorporateservices.com or Call/SMS/WhatsApp +65 8501 7133, or visit Raffles Corporate Services.

Last reviewed: 5 November 2026. The Editorial Team, Variable Capital Companies Act.