FMI and VCFI are complementary schemes administered by Enterprise Singapore. VCFI provides tax exemption at the fund level, while FMI reduces tax on the fund manager’s fees. This guide explains how they work together and which applies to your situation.
Read This First
- FMI requires VCFI approval: You cannot apply for FMI standalone. Your fund must first be approved under VCFI before the fund manager can access FMI benefits.
- Different beneficiaries: VCFI benefits the fund (and its investors). FMI benefits the fund management company.
- Same administering body: Both schemes are administered by Enterprise Singapore under the Startup SG Investor umbrella.
- Stackable benefits: Most fund managers apply for both—VCFI for the fund, then FMI for the management company.
Quick Decision Matrix
| FMI | VCFI | |
|---|---|---|
| Setting up a new VC fund | — | ✓ (apply first) |
| Already have VCFI-approved fund | ✓ | ✓ (prerequisite) |
| Want tax exemption on fund gains | — | ✓ |
| Want reduced tax on management fees | ✓ | — |
| Fund manager with MAS license | ✓ | — |
| Multiple VCFI funds under management | ✓ | — |
| Family office investing in startups | — | ✓ |
| S$10M+ committed capital | — | ✓ (minimum) |
| S$40M+ AUM in VCFI funds | ✓ (minimum) | — |
Legend: ✓ = Applicable | — = Not applicable
At a Glance
| FMI | VCFI | |
|---|---|---|
| Type | Concessionary tax rate | Tax exemption |
| Beneficiary | Fund management company | VC fund (and investors) |
| Tax benefit | 5% on fees/bonuses | Exempt qualifying income |
| Duration | Up to 5 years (renewable) | Up to 15 years (fund life) |
| Minimum threshold | S$40M AUM (VCFI funds) | S$10M committed capital |
| Key requirement | MAS license + hire 1 professional | LBS: S$100K × tenure |
| Prerequisite | VCFI approval required | None (apply first) |
| Administering body | Enterprise Singapore | Enterprise Singapore |
How FMI and VCFI Work Together
| Action | Benefit Unlocked | |
|---|---|---|
| 1 | Apply for VCFI for your fund | Tax exemption on qualifying fund income |
| 2 | Meet S$40M AUM in VCFI funds | Eligibility for FMI |
| 3 | Apply for FMI for fund manager | 5% tax on management fees and bonuses |
| 4 | Hire investment professional | Maintain FMI status |
Key insight: Most fund managers target both schemes. Start with VCFI for your fund, then apply for FMI once you have sufficient AUM in VCFI-approved funds.
Decision Flow
Step 1: Do you have a VCFI-approved fund?
Has your fund already been approved under the Venture Capital Fund Incentive scheme?
Step 2: What's your AUM in VCFI funds?
Build fund size first
Less than S$10M committed capital
Minimum S$10M committed capital required for VCFI approval
- Fundraising from LPs
- Anchor investor commitment
- Fund-of-funds partnership
VCFI only (for now)
S$10M-S$40M in VCFI funds
VCFI benefits active. FMI requires S$40M AUM threshold.
- Tax exemption on fund gains
- Attractive to LPs
- Path to FMI with growth
VCFI + FMI
S$40M+ AUM in VCFI funds
Eligible for both schemes. Stack the benefits.
- Fund-level tax exemption
- 5% tax on management fees
- 5% tax on carried interest
Eligibility Requirements
VCFI Requirements
| Requirement | Details |
|---|---|
| Minimum fund size | S$10M committed capital at application |
| Local Business Spending | Cumulative LBS of S$100,000 × incentive tenure |
| Investment mandate | Must invest % into unlisted Singapore-based companies by year 5 |
| Fund structure | Limited Partnership, Company, or VCC |
| Application timing | Before final close of fund |
FMI Requirements
| Requirement | Details |
|---|---|
| Prerequisite | Must manage VCFI-approved fund(s) |
| Minimum AUM | S$40M comprising VCFI funds |
| MAS license | Valid fund management license required |
| Hiring commitment | Hire at least 1 additional investment professional by end of FMI award |
| Duration | Up to 5 years, renewable in 5-year tranches |
Common Scenarios
- “I’m launching my first VC fund” - Apply for VCFI before final close. FMI comes later when you reach S$40M AUM.
- “I manage multiple funds, one has VCFI” - You may qualify for FMI if your VCFI fund AUM reaches S$40M.
- “I want to reduce tax on my carried interest” - FMI provides 5% tax on performance bonuses (carried interest) for fund managers.
- “My fund invests in regional startups, not just Singapore” - VCFI requires investing a percentage in Singapore-based companies. Check the specific requirement with Enterprise Singapore.
- “I’m a family office, not a fund manager” - VCFI may apply to your fund structure. FMI is specifically for fund management companies with MAS licenses.
Tax Benefit Comparison
| Without Incentive | With VCFI | With FMI | |
|---|---|---|---|
| Fund gains (dividends, exits) | 17% corporate tax | Exempt | N/A |
| Management fees | 17% corporate tax | N/A | 5% |
| Performance bonus (carry) | 17% corporate tax | N/A | 5% |
Note: VCFI exempts income at the fund level. FMI reduces tax at the fund manager level. These are different entities and different income streams.
Before You Apply
For VCFI:
- Ensure minimum S$10M committed capital before application
- Plan for Local Business Spending commitment (S$100K × tenure years)
- Define Singapore startup investment strategy to meet percentage requirement
- Apply before final close of fund
- Contact SSG_Investor_VCFI@enterprisesg.gov.sg to discuss eligibility
For FMI:
- Ensure your fund has VCFI approval first
- Verify S$40M AUM threshold is met with VCFI fund assets
- Confirm valid MAS fund management license
- Plan for hiring commitment (1 additional investment professional)
- Contact Enterprise Singapore after VCFI approval
Related Guides
- EDBI vs VCFI Decision Matrix - VCFI for fund managers vs EDBI for startups
- Startup SG Decision Matrix - Overview of Startup SG schemes
- Grant Pitfalls Guide - Common mistakes when applying for government support
- Singapore Grants Glossary - Key terms and acronyms explained
- Fund Management Incentive - Full FMI scheme details
- Venture Capital Fund Incentive - Full VCFI scheme details
Official Links
- VCFI/FMI: Startup SG - Official scheme information
- MAS Fund Management Licensing - MAS licensing information
- Enterprise Singapore - Administering agency
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