25th August 2026
By Shubhii Verma
Singapore and Hong Kong are intensifying their competition to attract investment managers, with each financial hub pursuing a different strategy. Hong Kong is considering tax incentives for fund managers and private equity professionals, while Singapore is emphasizing easier access to advanced artificial intelligence tools.
The rivalry reflects a broader battle for financial talent, institutional capital and technology-driven investment firms across Asia.
Hong Kong Targets Fund Managers With Carried Interest Tax Breaks
Hong Kong is reviewing proposals that could reduce taxes on carried interest and performance-related income for eligible investment professionals. The measures are designed to make the city more attractive to hedge funds, private equity firms and family offices. However, proprietary trading companies may initially be excluded from the incentives because they do not fall under the traditional definition of investment funds.
The proposed tax changes are particularly significant for senior fund managers, some of whom can earn millions of dollars in performance fees. Hong Kong hopes that lower tax costs will encourage firms and high-earning professionals to establish or expand operations in the city.
Singapore Bets on AI Access to Attract Investment Firms
Singapore, meanwhile, is positioning access to AI as a competitive advantage. The city-state has relatively open access to advanced AI models and technology from both Western and Chinese developers. This is increasingly important for quantitative investment firms that rely on AI and sophisticated algorithms to analyse large datasets, develop trading strategies and manage risk.
Hong Kong faces challenges because access to some advanced Western AI models remains restricted. Although the city operates separately from mainland China in many areas, technology restrictions imposed by US companies can still affect access to certain AI services.
Why AI Access Could Influence Where Quant Firms Locate
This technology gap is becoming a factor in decisions about where firms locate research and trading operations. Some quantitative investment businesses are reportedly considering Singapore because it offers access to a wider range of AI tools while maintaining strong connections with both China and the United States.
The competition was highlighted by moves involving major financial firms relocating or considering relocation of technology and research staff to Singapore.
Hong Kong vs Singapore: Which Financial Hub Has the Edge?
Hong Kong, however, retains important advantages, including its proximity to mainland China, deep capital markets, strong financial infrastructure and growing digital-asset ecosystem. Singapore offers political and technological connectivity with both major economic powers, along with an established reputation as a regional financial centre.
Ultimately, the competition may come down to more than tax rates. Hong Kong is betting on financial incentives, while Singapore is betting that access to cutting-edge AI and technology talent will be more valuable to the next generation of investment firms.
