# Hong Kong and Singapore Are Racing to Cut Taxes for Hedge Fund Managers > Hong Kong's push to erase taxes on carried interest has set off a scramble among hedge funds weighing a move from Singapore, and Singapore has responded within days by promising its own tax breaks for fund managers who deliver strong returns. - Source: Continental - Canonical URL: https://continental.today/article/hedge-fund-tax-race-hong-kong-singapore - Author: Continental Newsroom - Section: Markets - Published: 2026-08-22T12:59:58.000Z - Updated: 2026-08-22T12:59:58.000Z - Tags: Hedge Funds, Hong Kong, Singapore --- Hong Kong has opened a new front in its long running rivalry with Singapore for hedge fund business, introducing legislation that would erase taxes on carried interest, the share of investment profits that fund managers keep as pay. For high earning managers, the change could be worth millions of dollars a year, and it has already set off a wave of maneuvering across the city's financial sector. Investment banks in Hong Kong are reportedly bracing for an exodus of proprietary traders drawn by the new structure, and the scramble to qualify for the tax treatment has gotten specific enough that at least one fund has considered rebranding a receptionist as an investor relations official to help meet the rules. The Alternative Investment Management Association, an industry body, says some of its member firms are already in active conversations with portfolio managers and staff about relocating within months. Singapore, which has spent years building itself into a hub for hedge funds and family offices, is not waiting to see how much business it might lose. Just days after Hong Kong's move became public, Singapore pledged its own tax exemptions for individual fund managers, including a proposal to exempt a share of the profits managers earn when they deliver strong returns for investors in qualifying funds. The dueling proposals amount to a direct bid by each financial center to keep or attract the kind of highly compensated, highly mobile talent that hedge funds depend on. Because fund managers can often relocate with relatively little friction compared with a bank or a large company, tax treatment on carried interest has become one of the sharper tools each government has to compete for that business. The stakes go beyond a handful of star managers. Hedge funds bring with them lawyers, prime brokers, administrators and other service businesses that tend to cluster around wherever fund managers set up, so a shift in where those managers choose to be based carries consequences for the broader financial ecosystems of both cities. For now, the two governments appear to be locked in an escalating match of matching offers rather than any resolution to where that business ultimately lands. --- Originally published by Continental. Free to cite with attribution and a link to https://continental.today/article/hedge-fund-tax-race-hong-kong-singapore.