Beijing's Same-Day Stock Connect Answer To Singapore's Tax Play
Two Incomplete Regimes
Singapore's Monetary Authority announced on August 19 a tax-exemption package for fund managers, exempting qualifying profit-related returns from tax starting the 2027 assessment year, alongside a new Hedge Fund Investment Programme and an Investment Management Track under the ONE Pass visa scheme. AIMA's Asia-Pacific co-head Kher Sheng Lee called it proof that 'MAS listened widely, and then it moved fast' (AIMA had warned MAS in July that Hong Kong's own carried-interest reforms would widen the tax gap in Hong Kong's favor). The detail that actually matters to a fund manager deciding where to book performance fees, the tax rate and the qualifying criteria, is deferred to Budget 2027.
Hong Kong's answer was supposed to be its own carried-interest bill: gazetted June 12, First Reading June 24, the Bills Committee finished clause-by-clause work by mid-August, and the government is still only targeting a second reading debate 'in the latter half of 2026,' per the Inland Revenue Department's August 12 statement. The week's coverage cast this as Hong Kong pulling ahead in the talent war. Look, that framing skips the part where neither government has actually delivered anything: Singapore's numbers arrive at a budget speech eighteen months out, and Hong Kong's bill is still sitting in LegCo without a floor date.
The Money Beijing Moved
The bigger move came from the mainland, on the same day. China's National Financial Regulatory Administration said mainland insurers can now buy Hong Kong-listed ETFs through Stock Connect, according to deputy head Xiao Yuanqi. That is not a tax carrot. It is a plumbing change, live the moment the exchanges implement it, that lets mainland insurers allocate directly into Hong Kong-listed ETFs, a pool of capital a Hong Kong-based manager can plausibly capture without a single vote in any legislature.
The scale is why it matters. Southbound Stock Connect inflows hit a record HK$938.9 billion year to date as of mid-August, and Hong Kong's asset and wealth management industry already grew its assets under management 20 percent to a record HK$42.202 trillion in 2025, per SFC data cited by Hedgeweek. Insurer money is long-duration by mandate (an insurer buying ETFs to match liabilities is not the same buyer as a hedge fund chasing a quarter's alpha, and it does not leave when a tax rate looks better somewhere else). Singapore's tax package competes for the manager. Beijing's Stock Connect expansion competes for the pool of money that manager is trying to attract.
The fund managers deciding between Singapore and Hong Kong this cycle are watching one live capital pool against two tax regimes that exist mostly as press releases. Beijing does not need LegCo's calendar to move insurer money through Stock Connect; Hong Kong's own government does. Watch whether the carried-interest bill actually reaches its second reading debate before the year is out, the government's own deadline, or joins Singapore's Budget 2027 promises in the pile of incentives nobody can yet collect on.
Sources
- Reuters via SCMP -- Singapore plans tax and visa incentives to boost fund industry (scmp.com)
- AIMA -- MAS announces measures to strengthen Singapore as an asset management hub, with member reaction (aima.org)
- SCMP -- Singapore's carrots for fund managers set to sharpen competition with Hong Kong (scmp.com)
- Inland Revenue Department, HKSAR -- Press release on carried interest tax bill status (ird.gov.hk)
- Caixin Global -- China to let mainland insurers buy Hong Kong ETFs through Stock Connect (caixinglobal.com)
- Hedgeweek -- Singapore moves to cut asset management taxes as HK talent war intensifies (hedgeweek.com)