Investment Funds in Singapore

Foreign investors targeting the financial industry in Singapore can choose to set up investment funds here. With a highly regulated financial sector, Singapore is an excellent financial center in Southeast Asia, being commended various times for the assistance it offers to foreign entrepreneurs.

Those who want to open investment funds in Singapore have several options and must also comply with the laws related to this industry. Our company formation specialists can offer information on the investment funds industry in the city-state and can also assist clients who want to open a company in Singapore.

Legislation related to investment funds in Singapore

Foreign professional investors who want to start investment funds in Singapore must comply with the following laws:

• the Code for Collective Investment Schemes Act, also known as the CIS Regulations;
• the Securities and Futures Act;
• the Financial Advisers Act;
• the Financial Advisers Regulations.

The Singapore Company Act also provides for the type of structures that can be used when opening an investment fund. Speaking of investment vehicles, at the beginning of the year the government included a new type of company for the incorporation of investment funds: the variable capital company. Our company registration agents in Singapore can offer more information on this matter.

Types of investment funds in Singapore

The following types of investment funds can be established in Singapore:

• open-ended retail funds;
• closed-ended retail funds;
• foreign funds.

These types of funds can further be divided into various sub-types, among which equity and hedge funds are among the most appreciated in Singapore.

Requirements to start an investment fund – presented by our Singapore company formation firm

In order to set up a Singapore investment fund, an investor must comply with a few requirements imposed by the Monetary Authority of Singapore, the main regulatory body for the financial markets in the city-state. Among these requirements are:

• selecting one of the available types of companies which can be registered as investment companies;
• applying for a capital markets license;
• appointing a manager who will administer the fund.

Types of investors addressed by Singapore funds

Considering there are various types of investment funds that can be established in Singapore, these address different categories of investors. According to our company formation advisors in Singapore, these are:

• expert or professional investors who are persons in charge of  the purchase, sale, or holding of capital market products;
• retail investors who enter the category of non-professional investors and who make financial investments in their own accounts, usually through traditional or online brokerage houses;
• institutional investors that can be companies or governmental bodies that own and use their own, respectively government finances;
• accredited investors who are individuals with more than USD 2 million in net personal assets, or more than USD1 million in net financial,  or more than USD300,000 in income during the previous 12 months.

If you are interested in setting up a company in Singapore with the purpose of establishing an investment fund, you can rely on our local agents.

Types of management companies and licenses for Singapore investment funds

Singapore is a highly regulated jurisdiction when it comes to creating investment funds, so it provides for several types of licenses that can obtained by administering companies.

Management companies are divided into:

• the registered management fund company which is a company that manages assets worth SGD250 million and has the potential to attract up to 30 institutional and accredited investors;
• the retail licensed management company which is a business that manages funds for a variety of investors, including retail and individual investors;
• the accredited institutional licensed company – this type of business exclusively manages money for institutional and accredited investors;
• the venture capital management company – the majority of this business’ investments are in startups. Additionally, only institutional and accredited investors may invest in this kind of business.

With respect to the licenses that can be obtained by such companies, they are divided into:

• the Capital Markets Services (CMS) license;
• the Financial Advisor’s license.

These licenses are issued by the Monetary Authority of Singapore.

If you want to open a company in Singapore for investment management purposes, you can rely on us.

Under the CMS license, a management company can offer the following services:

• securities trading and funding;
• futures contracts;
• trading in foreign exchange with leverage;
• providing corporate financial advice;
• management of trusts for real estate investments;
• supplying custodial services.

Under the Financial Advisor’s license, a company can engage in the following activities:

• promotion of unit trusts;
• provision of life insurance goods;
• services for providing advice on investment goods, such as foreign exchange contracts and life insurance policies;
• investment report issuance.

Our consultants can advise on how to set up a company in Singapore with the purpose of creating an investment fund management company. We can also handle the registration of the selected business entity for this reason.

Such a company can take one of the following corporate forms:

• private limited liability company;
• limited partnership;
• company with a variable capital;
• unit trust.

If you need guidance in choosing between them, you can get in touch with our Singapore company formation advisors.

The investment funds sector in Singapore

According to a survey issued by the MAS, at the level of 2022:

• the total value of assets under management was SGD 4.9 trillion;
• 76% of the funds operating in Singapore were foreign-owned;
• also, 88% of the funds operating in the city-state had investments outside Singapore;
• the net inflow of investments was SGD 435 billion.

For full information on how to create an investment fund in the city-state, please feel free to contact our company formation advisors. We can also assist businessmen who intend to open a company in Singapore.