GIP Scheme B: Transferring SGD 25 Million in Assets to a GIP-Managed Fund

The Global Investor Programme (GIP) Scheme B requires applicants to transfer SGD 25 million in investable assets into a fund managed by a Monetary Authority of Singapore (MAS)-regulated entity. As of Q3 2025, MAS has approved 38 fund managers for GIP Scheme B participation, down from 42 in 2023, reflecting stricter oversight. This article provides a procedural roadmap for applicants: selecting an approved fund manager, conducting due diligence, and ensuring full compliance with MAS regulations. Each step carries specific legal and financial implications, with non-compliance risking application rejection or revocation of the Permanent Residence (PR) status.

Unlike passive investment routes, Scheme B mandates that the SGD 25 million be placed in a GIP-managed fund—a vehicle where the fund manager retains discretionary control over asset allocation. The applicant cannot direct individual trades or withdraw funds for 5 years. As of 2025, the average annual management fee for these funds is 1.2–1.8% of assets under management (AUM), with performance fees capped at 15% of profits per MAS guidelines. This article is structured for high-net-worth individuals (HNWIs) and their advisors navigating this capital-intensive pathway.

Selecting a MAS-Approved Fund Manager for GIP Scheme B

The first procedural hurdle is identifying a MAS-licensed fund manager on the GIP-approved list. As of June 2025, MAS maintains a public register of 38 firms, including DBS Private Bank, UOB Asset Management, and independent boutiques like APS Asset Management. Each manager must hold a Capital Markets Services (CMS) license for fund management under the Securities and Futures Act (SFA).

Applicants cannot choose an unlicensed manager. The list is updated quarterly; in 2024, MAS removed 3 firms for non-compliance with AML/CFT requirements. The process involves:

• Requesting the current list from Contact Singapore (the GIP administering agency).
• Reviewing track records: At least 5 years of fund management experience is required for the manager, with a minimum AUM of SGD 500 million.
• Conducting initial interviews: Applicants typically shortlist 3–5 managers based on fund performance, fee structure, and alignment with risk appetite.

A critical point: the fund manager must be independent of the applicant’s business or family office. This prevents self-dealing and ensures the SGD 25 million is deployed per MAS’s “arm’s length” principle. In 2024, MAS rejected 2 applications where the fund manager was related to the applicant’s corporate group.

Due Diligence: Evaluating Fund Structures and Legal Frameworks

Due diligence for GIP Scheme B goes beyond standard investment checks. Applicants must verify that the fund vehicle complies with MAS’s Code on Collective Investment Schemes and the SFA. Key areas include:

• Fund domicile: Most GIP-managed funds are domiciled in Singapore as variable capital companies (VCCs). As of 2025, 92% of GIP Scheme B funds use the VCC structure, offering tax transparency and flexibility. Non-Singapore domiciled funds (e.g., Cayman Islands) are not accepted.
• Audit and reporting: The fund must undergo annual audits by a MAS-approved auditor (e.g., Big 4 firms). Quarterly reports must be submitted to the applicant and MAS, detailing asset allocation, performance, and any material changes.
• Custody arrangements: Assets must be held by a MAS-licensed custodian bank (e.g., HSBC, Standard Chartered). The applicant’s funds cannot be commingled with the manager’s proprietary assets.

Applicants should engage a Singapore-licensed law firm to review the fund’s offering memorandum and management agreement. Key clauses to negotiate include:

• Lock-in period: The mandated 5-year lock-in is non-negotiable, but early redemption may be allowed for medical emergencies or death (subject to MAS approval).
• Fee caps: Management fees should not exceed 2% p.a., and performance fees must be calculated on a high-water mark basis.
• Exit provisions: After 5 years, the applicant can redeem the full principal plus any returns, but must give 90 days’ notice.

Compliance with MAS Regulations: AML, KYC, and Reporting

MAS imposes stringent anti-money laundering (AML) and know-your-client (KYC) requirements on GIP Scheme B. The fund manager must conduct enhanced due diligence (EDD) on the applicant, including:

• Source of funds verification: The applicant must provide bank statements, tax returns, and audited financial statements for the SGD 25 million. Funds from jurisdictions on the FATF grey list (e.g., Myanmar, Nigeria as of 2025) face additional scrutiny.
• Beneficial ownership disclosure: If the applicant uses a trust or holding company to channel the funds, the ultimate beneficial owner (UBO) must be identified. MAS requires UBOs holding >25% of the fund to be disclosed.

The fund manager must file Suspicious Transaction Reports (STRs) with the Commercial Affairs Department (CAD) if any red flags arise. In 2024, CAD processed 12 STRs related to GIP applications, leading to 2 rejections.

Post-investment, the fund manager must submit annual compliance certificates to MAS, confirming adherence to the SFA and the GIP Scheme B terms. The applicant must also declare the investment in their annual PR renewal filings. Failure to maintain the SGD 25 million for the full 5 years (e.g., due to early redemption) results in PR revocation—MAS revoked 3 PRs in 2024 for this reason.

Step-by-Step Process for Transferring SGD 25 Million

The actual transfer of SGD 25 million involves a structured timeline of 4–6 months from fund selection to completion:

1. Month 1: Fund Selection and Due Diligence – Identify 3–5 approved managers, review their fund documents, and sign a non-disclosure agreement (NDA). Engage a law firm to audit the fund’s compliance with MAS rules.
2. Month 2: Subscription Agreement – Execute a subscription agreement with the chosen fund manager. The agreement must specify the lock-in period, fee structure, and reporting obligations. The applicant deposits SGD 1 million as a commitment fee (refundable if the application is rejected).
3. Month 3: Source of Funds Verification – Provide bank statements, tax returns, and a sworn declaration of fund origin. The fund manager conducts EDD and submits a compliance report to MAS.
4. Month 4: Transfer Execution – Wire the full SGD 25 million from a Singapore bank account to the fund’s custodian account. MAS requires the transfer to be in SGD; foreign currency conversions must be done at market rates.
5. Month 5–6: MAS Approval and PR Issuance – The fund manager files a confirmation of investment with Contact Singapore. MAS reviews the compliance report and issues the PR in-principle approval (IPA). The applicant must activate the PR within 6 months.

As of 2025, the average processing time from fund selection to PR IPA is 5.2 months, per Contact Singapore data. Delays occur in 15% of cases, typically due to incomplete source of funds documentation.

Risks and Pitfalls in the Transfer Process

Despite the structured process, several risks can derail the GIP Scheme B application:

• Currency fluctuation risk: The SGD 25 million must be in SGD. If the applicant’s assets are in USD or EUR, conversion costs can reach 1–2% of the principal. In 2024, the SGD appreciated 4.5% against the USD, reducing the effective value of non-SGD assets.
• Manager underperformance: The fund manager is not required to guarantee returns. In 2024, the average GIP-managed fund returned 6.2% p.a., but 12% of funds underperformed the MAS savings bond yield (3.1% p.a.). Applicants cannot switch managers mid-lock-in.
• Compliance failures: If the fund manager later violates MAS regulations (e.g., misreporting), the applicant’s PR status may be jeopardized. In 2023, MAS fined one fund manager SGD 500,000 for AML breaches, affecting 4 GIP investors whose PRs were placed under review.
• Tax implications: The SGD 25 million investment is subject to Singapore’s income tax if the fund generates dividends or interest. As of 2025, the corporate tax rate is 17%, but capital gains are tax-free. Applicants should structure the investment to minimize taxable income.

Mitigation strategies include: using a multi-currency account to hedge forex risk, selecting a fund manager with a 10+ year track record, and purchasing tax insurance to cover unexpected liabilities.

Case Study: A Successful Transfer Under 2025 Rules

Consider a hypothetical applicant, a Chinese tech entrepreneur with SGD 30 million in liquid assets. They select UOB Asset Management (UOBAM), an approved manager with SGD 18 billion AUM. The due diligence process takes 6 weeks, revealing that UOBAM’s fund has a 7.5% p.a. return over 5 years with a 1.4% management fee.

The subscription agreement includes a 5-year lock-in, a high-water mark performance fee of 12%, and quarterly reporting. The applicant transfers SGD 25 million from a DBS account to HSBC (the custodian). MAS approves the PR within 5 months. The applicant’s PR status is confirmed in October 2025, and they relocate to Singapore with their family.

Key lessons: The applicant engaged a law firm early to review the fund documents, avoided unregulated managers, and maintained a buffer of SGD 5 million for living expenses and taxes. The total costs (legal, conversion, management fees) amounted to SGD 420,000 (1.68% of the investment).

FAQ

Q1: Can the SGD 25 million be transferred in installments under GIP Scheme B?

No. MAS requires the full SGD 25 million to be transferred as a single lump sum within 90 days of the subscription agreement being signed. Partial transfers are not permitted. In 2024, 2 applications were rejected because the applicant attempted to stagger the transfer over 6 months. The funds must be fully deployed in the GIP-managed fund before the PR in-principle approval is granted. The only exception is for force majeure events (e.g., bank holiday delays), which require MAS pre-approval.

Q2: What happens if the fund manager goes bankrupt during the 5-year lock-in?

If the fund manager becomes insolvent, MAS steps in to protect investors. The custodian bank (e.g., HSBC) retains control of the assets, and MAS appoints a replacement manager within 30 days. The applicant’s SGD 25 million is ring-fenced and cannot be seized by the manager’s creditors. However, the applicant cannot redeem the funds early—the lock-in period resets with the new manager. In 2024, one manager (Global Capital Partners) went bankrupt, and the replacement manager (DBS) took over within 2 weeks, with no loss of principal for GIP investors.

Q3: Are there any tax exemptions for the SGD 25 million investment under GIP Scheme B?

The investment itself is not tax-exempt. However, capital gains from the fund (e.g., sale of shares) are tax-free in Singapore. Dividend income earned by the fund is subject to Singapore’s 17% corporate tax, but the fund manager can claim a tax deduction for management fees. The applicant, as an individual, pays no income tax on fund distributions if they are classified as capital gains. As of 2025, MAS and IRAS have a joint guideline that GIP-managed funds structured as VCCs are eligible for the Variable Capital Companies Act’s tax exemption on fund-level income, subject to conditions.

References

• Monetary Authority of Singapore, 2025, Global Investor Programme: Approved Fund Managers List and Regulatory Requirements
• Contact Singapore, 2025, GIP Scheme B Application Guide and Processing Statistics
• Commercial Affairs Department, 2024, Annual Report on Suspicious Transaction Reports in Investment Schemes
• Singapore Academy of Law, 2025, Legal Framework for Variable Capital Companies in GIP-Managed Funds
• IRAS, 2025, Tax Treatment of Collective Investment Schemes and GIP Investments