Singapore VCC insights

ADGM Funds Framework vs Singapore: Where Should a Fund Manager Base Itself in 2026?

By VCC Editorial Team · Published 14 October 2026 · Updated 16 October 2026

Short answer: ADGM now offers lighter routes for smaller closed-ended managers (up to USD 200 million committed) and institutional-only managers, a 0% free zone rate on qualifying fund management income and no personal income tax. Singapore offers deeper Asian distribution, banking and talent, a VCC regime and fund tax exemptions, but at a 17% corporate rate.

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 ADGM funds framework changed on 16 September 2026, giving Abu Dhabi Global Market (ADGM) a category built for the emerging manager with one or two closed-ended funds. This article compares ADGM and Singapore from the manager’s side: licensing, tax on fees and carry, people and cost. Family offices are covered in our ADGM family office vs Singapore guide. All rules were checked against FSRA, UAE Ministry of Finance, Monetary Authority of Singapore (MAS), Ministry of Manpower (MOM), IRAS and Singapore Statutes Online sources on 14 October 2026.

What did the ADGM FSRA change in its funds framework on 16 September 2026?

The FSRA formalised New Rules with streamlined regimes for managers of smaller funds and of institutional-only funds. It also eased employee investment in an employer’s private funds and revised the Foreign Fund Manager regime.

The changes follow Consultation Paper No. 12 of 2025 (published 24 November 2025, closed 30 January 2026). The FSRA points to amended FSRA Rules (Funds) and to Supplementary Guidance on Specialised Fund Manager Categories (VER01.160926).

The FSRA’s change-of-status forms show how the new categories work:

• Sub Threshold Fund Manager (STFM): it may manage only closed-ended funds. Those funds must be Exempt Funds, Qualified Investor Funds, or foreign funds not available to ADGM Retail Clients. The manager must not accept more than USD 200 million of aggregate committed capital across all its funds.
• Institutional Fund Manager (IFM): every unitholder must be a Professional Client and none may be a natural person. The fund documents must exclude anyone else, each investor’s minimum subscription must be USD 5 million or more, and the manager may manage only Qualified Investor Funds or their foreign equivalent.
• Institutional Fund Asset Manager: an asset manager with a Managing Assets permission can apply for streamlined treatment where it acts only for institutional funds.

An existing manager applies for the new status on an FSRA declaration form, with a fee of USD 1,000. The new status takes effect only when the FSRA confirms it in writing, and further conditions are placed on the licence. Branches, Venture Capital Fund Managers seeking IFM status and firms with wider permissions must instead discuss a variation of permission with their supervisor.

We could not open the amended rulebook text, so we do not describe which capital or reporting requirements are reduced for STFMs and IFMs. Read the Supplementary Guidance before budgeting on lighter requirements.

How is a fund manager licensed in ADGM today?

The FSRA licenses by activity. A fund manager applies for a Financial Services Permission for the regulated activity of Managing a Collective Investment Fund, under the Financial Services and Markets Regulations 2015.

The FSRA’s Getting Started Guide (May 2025) sets out the main requirements:

• Prudential category and capital: Managing a Collective Investment Fund sits in Category 3C. The base capital requirement is USD 250,000. Where that is the firm’s only Category 3C activity, it falls to USD 150,000 if the firm manages a Public Fund or any fund open to retail clients, and to USD 50,000 otherwise. An expenditure-based minimum of 13/52 of annual audited expenditure (18/52 if holding client assets) applies if higher.
• Fees: USD 10,000 to apply for the activity and USD 10,000 a year in supervision fees, plus USD 500 for each individual approved for a controlled function. A fees consultation (Consultation Paper No. 6 of 2026) is open until 6 November 2026.
• People: the firm needs a Senior Executive Officer, a Finance Officer, a Compliance Officer and a Money Laundering Reporting Officer. The Senior Executive Officer, Compliance Officer and Money Laundering Reporting Officer must live in the UAE, and the Senior Executive Officer cannot also hold either compliance role. The FSRA sets no minimum headcount.
• Premises: the firm needs a physical presence on Al Maryah Island or Al Reem Island.

ADGM funds are Public Funds (registered with the FSRA), Exempt Funds or Qualified Investor Funds (both notified). The FSRA’s 2020 brochure gave minimums of USD 50,000 and USD 500,000 for the last two; check the current Funds Rulebook before relying on them.

How is a fund manager licensed in Singapore?

A Singapore manager needs a capital markets services licence for fund management. Section 82 of the Securities and Futures Act 2001 prohibits carrying on business in a regulated activity without one. Breach carries a fine of up to S$150,000, up to 3 years’ imprisonment, or both.

MAS licenses managers as licensed fund management companies (LFMCs), with a simplified regime for venture capital fund managers. Under MAS Guidelines SFA 04-G05 (last revised 3 September 2025), LFMCs are Retail or Accredited/Institutional, with base capital from S$250,000 to S$1,000,000 depending on category and business. MAS’s fund management licensing page states that:

• Applications are made on Form 1 through the eLicensing system.
• Review takes up to 6 months for a complete application; after in-principle approval the applicant has up to 6 months (extendable by 3) to meet conditions.
• The firm needs dedicated, secure office space.
• The annual corporate fee is S$4,000 for an LFMC, plus S$5 for each representative from the 101st.

Our fund management licence guide covers staffing, track record and compliance.

The Variable Capital Company (VCC) is tied to this licence. Under section 46 of the Variable Capital Companies Act 2018, a VCC must at all times have a manager. That manager must hold a capital markets services licence for fund management, be a person under section 99(1)(a) to (d) of the Securities and Futures Act 2001, or be a prescribed person. The registered fund management company limb was deleted from 6 May 2026 (see who can manage a VCC after 6 May 2026).

How is fund management income taxed in ADGM and Singapore?

An ADGM manager can pay 0% on its qualifying fund management income if it meets every free zone condition. A Singapore manager pays corporate tax at 17% on its fees. Singapore’s planned carried interest exemption narrows the gap for performance income.

Under Article 3 of Federal Decree-Law No. 47 of 2022, a Qualifying Free Zone Person pays 0% on Qualifying Income and 9% on its other taxable income. Article 18 requires adequate substance in the UAE, Qualifying Income, no election into the standard regime, compliance with Articles 34 and 55 (arm’s length pricing and transfer pricing documentation) and any ministerial conditions.

Ministerial Decision No. 229 of 2025 (28 August 2025, applying from 1 June 2023) replaced Ministerial Decision No. 265 of 2023. It lists “fund management services” and “wealth and investment management services” as Qualifying Activities where they are regulated by a Competent Authority in the UAE, and it names the FSRA as one. Transactions with natural persons do not disqualify these activities. Further conditions:

• Non-qualifying revenue must not exceed 5% of total revenue or AED 5,000,000, whichever is lower.
• The manager must prepare audited financial statements.
• A manager that fails any condition loses its status from the start of that tax period and for the next 4 tax periods.

Funds have their own route. Under Article 10, an investment fund may apply to the Federal Tax Authority for exemption as a Qualifying Investment Fund. The fund or its manager must be regulated by a UAE or recognised foreign authority, its interests must be listed or marketed sufficiently widely, and avoiding tax must not be its main purpose. The UAE does not tax individuals on income.

Singapore taxes a manager’s fee income at 17%. On 19 August 2026, MAS announced with the Ministry of Finance a planned exemption for profit-related returns from fund management services to qualifying funds. Expected from Year of Assessment 2027, it would cover a contractual share of a qualifying fund’s profits received by companies, partnerships or individuals. Details are due at Budget 2027; it is not yet law.

At the fund level, the 13O, 13OA, 13U and 13D schemes under the Income Tax Act 1947 exempt specified income of qualifying funds managed from Singapore. MAS FDD Circular 05/2026 (31 July 2026) removed the annual minimum assets under management condition for funds not managed by single family offices. The schemes run to 31 December 2029; funds awarded by then keep the exemption for life if they continue to qualify.

ADGM funds framework vs Singapore: how do they compare side by side?

The table sets out the position for a manager on 14 October 2026.

Factor	ADGM (Abu Dhabi)	Singapore
Manager licence	FSRA Financial Services Permission for Managing a Collective Investment Fund (Category 3C)	MAS capital markets services licence for fund management (LFMC or venture capital fund manager)
Light-touch tiers	STFM (closed-ended, up to USD 200 million committed); IFM (Professional Clients only, USD 5 million minimum); venture capital regime	Accredited/Institutional LFMC; venture capital fund manager regime
Base capital	USD 50,000 (non-retail fund manager only) to USD 250,000, or expenditure-based if higher	S$250,000 to S$1,000,000 depending on category, per MAS Guidelines
Regulator fees	USD 10,000 application, USD 10,000 a year (fees under consultation to 6 November 2026)	S$4,000 annual corporate fee for an LFMC
Tax on manager	0% on Qualifying Income for a Qualifying Free Zone Person; otherwise 9%	17%; planned carried interest exemption from Year of Assessment 2027
Fund tax	Qualifying Investment Fund exemption on application (Article 10)	13O, 13OA, 13U, 13D schemes to 31 December 2029
Personal income tax	None on individuals	Progressive, top resident rate 24%
Local staff	Senior Executive Officer, Compliance Officer and Money Laundering Reporting Officer must be UAE resident	Resident CEO and executive directors; Employment Pass at S$6,200 a month in financial services

Where is it easier to hire and move investment staff?

Singapore has the deeper pool of investment staff. ADGM requires fewer mandatory roles, but three of them must live in the UAE.

MAS puts Singapore’s asset management workforce at close to 25,000, about 80% of them local. Assets have grown 7.5% a year on average over five years, to almost S$7 trillion. For foreign hires, MOM sets the Employment Pass qualifying salary in financial services at S$6,200 a month, rising with age. For new applications from 1 January 2027 it rises to S$6,600, and candidates must also pass the points-based COMPASS framework. MAS and MOM also plan a new Investment Management Track under the Overseas Networks & Expertise (ONE) Pass., which may count performance-linked returns when assessing salary. Our sister site Singapore Employment Agency handles passes for fund management teams.

Which hub suits which fund manager?

The new ADGM categories favour a Gulf-facing manager with a small closed-ended programme or an institutional-only investor base. Singapore suits a manager raising from Asian investors, running a VCC platform, or building a larger team.

A practical way to decide:

1. Map the investors. If most capital is Gulf sovereign or institutional money and every ticket exceeds USD 5 million, the ADGM IFM category fits. If it comes through Asian private banks, Singapore’s distribution matters more.
2. Size the first fund. A closed-ended fund under USD 200 million of committed capital fits the ADGM STFM category. Larger or open-ended programmes need the full-scope ADGM regime or a Singapore LFMC.
3. Choose the vehicle. If you want a VCC with umbrella sub-funds, the manager must meet section 46 of the Variable Capital Companies Act 2018, which usually means a Singapore licence.
4. Model tax on both fees and carry. Compare conditional 0% in ADGM with 17% in Singapore, then add Singapore’s carry exemption once Budget 2027 confirms it.
5. Test substance. Both tax outcomes depend on real people and premises. Count who will live where.

Some managers run both: an ADGM entity for Gulf investors and a Singapore LFMC managing a VCC for Asia. That works if each entity has its own decision-makers and transfer pricing between them is documented. Our Singapore vs Dubai tax comparison covers the wider UAE and Singapore tax position.

Frequently asked questions

What is a Sub Threshold Fund Manager in ADGM?

It is a fund manager category introduced on 16 September 2026. The manager manages only closed-ended, non-retail funds and does not accept more than USD 200 million of aggregate committed capital across all its funds. Existing managers apply on an FSRA form, with a USD 1,000 fee.

Is fund management income tax-free in ADGM?

Only for a Qualifying Free Zone Person. Fund management services regulated by the FSRA are a Qualifying Activity under Ministerial Decision No. 229 of 2025, but the manager must keep substance, pass the de minimis test, prepare audited accounts and meet Article 18 throughout the tax period.

Can an ADGM manager manage a Singapore VCC?

Not on its ADGM licence alone. Section 46 of the Variable Capital Companies Act 2018 requires a Singapore capital markets services licence holder for fund management, a person under section 99(1)(a) to (d) of the Securities and Futures Act 2001, or a prescribed person.

Is Singapore’s carried interest exemption in force?

Not yet. MAS announced it on 19 August 2026 as a planned exemption, expected from Year of Assessment 2027, with details at Budget 2027.

Sources

• ADGM FSRA: Regulatory Update, FSRA Finalises Enhancements to its Funds Framework (16 September 2026)
• ADGM FSRA: Getting Started Guide (May 2025)
• UAE Ministry of Finance: Ministerial Decision No. 229 of 2025
• MAS: Measures to Strengthen Singapore’s Competitiveness as a Leading Asset Management Hub (19 August 2026)
• MAS: Fund Management Licensing

Raffles Corporate Services helps fund managers compare hubs and then build the Singapore side: LFMC application support, VCC incorporation and ongoing compliance. Email hello@rafflescorporateservices.com or Call/SMS/WhatsApp +65 8501 7133, or visit Raffles Corporate Services.

Last reviewed: 14 October 2026. The Editorial Team, Variable Capital Companies Act.

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