Singapore Tax Frameworks: What’s the Difference?

10 Feb 2021

What is it?: 

Section 13X: Enhanced-Tier Fund Tax Incentive Scheme 

Creates flexibility for Singapore-based funds to source for investment mandates, with no restrictions or financial penalties on the investments made by Singapore resident persons.

Section 13R: Onshore Fund Tax Incentive Scheme

Designed to facilitate domiciliation of funds into Singapore and to attract the funds of non-Singapore investors.

Section 13H: Tax Incentive

Provides tax exemption for income from funds that meet the scheme’s requirements to invest in unlisted Singapore-based companies (subject to a maximum tenure of 15 years).

 

The Breakdown

Section 13X

Section 13R

Section 13H

Fund’s Residence Can be offshore or onshore Must be a tax resident of Singapore
Fund Expenditure Minimum S$200k local business spending in a year Minimum S$200k business spending in a year Cumulative local business spending (LBS) ≥ S$100,000 multiplied by the incentive tenure
Assets Under Management  Minimum S$50mil  No Restrictions Minimum S$10mil 
Investors (13X/13R)

Investment (13H)

No Restrictions Must not be 100% owned by SIngapore investors Invests a certain percentage into unlisted Singapore-based companies by year five of the incentive or by the end of the incentive, whichever is earlier
Accepted Fund Legal Structures Any funds that meet qualifying conditions including Company, Trust, Limited Partnerships, VCCs that are Singapore incorporated or redomiciled into Singapore Company incorporated in Singapore Limited Partnership, Company (incorporated in Singapore or elsewhere), and Variable Capital Company (VCC).

 

References:

https://www.svca.org.sg/assets/upload/toolkit/pdf/Factsheet_S13H_FMI_13_Jan_2021.pdf

https://www.svca.org.sg/editor/source/Publication/Advocacy%20Files/S13X%20Paper%20by%20SVCA%20Advocacy%20Subcommittee.pdf

https://www.envysionwealth.com/what-does-the-13r-and-13x-tax-incentive-scheme-provide/#:~:text=13R%20Scheme%20is%20designed%20to,funds%20of%20non%2DSingapore%20investors.&text=The%2013X%20Scheme%20has%20no,made%20by%20Singapore%20resident%20persons

https://www.svca.org.sg/assets/upload/toolkit/pdf/Factsheet_S13H_FMI_13_Jan_2021.pdf