PI26 Advisory — Cross-border tax & corporate counsel

Singapore's Section 13U regime, used widely by family-office funds and some non-fund holding structures, was updated in 2025 to tighten the qualifying conditions. The structural implications for users of the regime are material; the political signal is clearer than the political signal sent by the 2023 Section 13O changes.

What changed

Minimum AUM threshold. The minimum AUM threshold for a Section 13U fund has been raised. The exact figure is set by reference to the MAS administrative thresholds rather than the statutory text, so the operative number is in the application package rather than the Act.

Investment Professional headcount. The minimum number of qualifying Investment Professionals (IPs) employed in Singapore has been increased for new applicants. The headcount is no longer a one-off entry condition; the regime now requires the IPs to be in place on a rolling basis, with periodic confirmation.

Local business spending floor. The annual local business spending floor has been raised. The eligible categories have not changed materially (salary, professional services, premises) but the floor has.

Capital deployment commitment. New applicants must commit to a minimum deployment of capital into Singapore-eligible investments within a defined window. The deployment-confirmation step is now part of the annual reporting rather than a one-off post-grant filing.

Structural implications

For groups using Section 13U as a holding vehicle for family-office capital with Asia-Pacific exposure:

The cost of maintaining the regime has gone up, both fixed (headcount, premises) and variable (deployment discipline). The break-even AUM at which the regime is cost-effective vs the alternatives has shifted upward.
The deployment-confirmation requirement makes the regime less useful as a passive holding wrapper. Groups using it as a top-of- structure holding for non-Singapore operating subsidiaries need to re-baseline.
The grandfathering provisions for existing 13U funds are clear but narrow: a change of investment manager, a material change in investment mandate, or a fund restructuring may push the existing fund out of grandfathered status.

What we are recommending

For new applicants: model the all-in cost against the alternative holding jurisdictions (Hong Kong, Mauritius, Luxembourg via a fund-of-funds wrapper). Section 13U remains attractive for groups with a genuine Asia-Pacific investment thesis and the AUM to justify the regime cost. It is not the right tool for a structurally passive holding entity.