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The Singapore government on Wednesday announced a package of measures, including a tax exemption for investment profits earned by managers of single-family offices and other qualifying funds.

“We want to be able to grow this further as part of our plans to grow Singapore’s position as an international financial sector,” Minister for National Development Chee Hong Tat said Wednesday.

Following the move, Hong Kong analysts are now urging for the city to move forward with its proposed tax break on carried interest, the performance fees earned by hedge fund and private equity managers.

The bill, submitted to lawmakers in June and expected to come to a vote later this year, has sparked debate in the financial industry. Some participants argue that the exemption is too narrow in scope, while others question the fairness of exempting ultra-wealthy fund managers from tax.

“Hong Kong needs to proceed quickly with the proposed law change to continue strengthening our established reputable position as the No. 1 global wealth management centre,” said Jasmine Lee Shun-yi, vice-president of Hong Kong Institute of Certified Public Accountants, as quoted by the South China Morning Post.

She added that Singapore had taken action to “try to match our bill.”

“The tax break will be vital for Hong Kong to further increase its competitiveness to attract global fund managers to establish the entirety of their businesses in Hong Kong. In conjunction, it will also attract relevant diverse talent to consider moving to Hong Kong as well.”

Singapore’s top personal income tax rate is currently 24%, compared with 45% in the UK. The top U.S. federal rate is 37%, although combined federal and state taxes can exceed 50% in high-tax states such as California and New York. Corporate tax rates follow a similar pattern: 17% in Singapore, 25% in the U.K. and 21% in the US.

By contrast, Hong Kong’s salaries tax is capped at a standard rate of 15%, while its corporate profit tax rate is 16.5%.

Under the proposal, fund employees would be exempt from salaries tax on performance fee income, while fund houses would not have to pay profit tax on such income.

The changes would take effect retroactively from April 2025, according to a government paper presented to lawmakers earlier this year.

According to the paper, the exemption would give Hong Kong the world’s lowest tax rate for managers of hedge funds, private equity funds and venture capital funds whose income is largely performance-based.