MAS Licensed Fund Management Company (LFMC) — Costs and fees breakdown
A MAS Licensed Fund Management Company (LFMC) is a Singapore entity authorised to carry on fund management under a Capital Markets Services licence. Expect set-up costs of roughly S$70,000 to S$180,000 plus S$250,000 base capital, and annual running costs of S$200,000 to S$500,000, depending on whether you serve retail or only accredited and institutional investors.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
What a Licensed Fund Management Company is
A MAS Licensed Fund Management Company is the standard vehicle for running a fund-management business in Singapore. It holds a Capital Markets Services licence for fund management under the Securities and Futures Act 2001. There are two principal types: an A/I LFMC, which may serve only accredited and institutional investors, and a Retail LFMC, which may also serve the general public and faces higher capital and governance requirements. Most boutique managers and family-office spin-outs start as A/I LFMCs because the bar is lower.
For a closely related perspective, see our guide on VCC Act 2018 — Section 46 Permissible Fund Manager rules — Step-by-step walkthrough.
Who should apply for an LFMC licence
The LFMC route suits managers running discretionary mandates, private equity and venture funds, hedge funds and multi-family offices managing external capital. If you manage only your own or a single family’s money, an exemption may apply instead. If you intend to market funds to the Singapore retail public, you must take the heavier Retail LFMC path. Choosing the wrong category early is an expensive mistake to unwind, so scope your investor base before applying.
Refer to the official guidance from the relevant Singapore authority for the latest position.
Capital and headcount requirements (numerical)
An A/I LFMC and a Retail LFMC both carry base capital of S$250,000, with Retail LFMCs subject to additional financial-resources and risk requirements. Every LFMC must have at least two directors with relevant experience (at least one executive and resident in Singapore), a resident CEO with at least ten years of relevant experience, and at least two full-time professionals resident in Singapore. The Securities and Futures (Licensing and Conduct of Business) Regulations set the staffing and conduct conditions, and the financial-resources rules require capital to be maintained on an ongoing basis, not just at licensing.
Set-up cost breakdown
Indicative one-off costs to stand up an A/I LFMC:
- Application support (law firm or consultant): S$35,000 to S$90,000
- Compliance, AML and risk framework: S$12,000 to S$35,000
- Incorporation and corporate secretarial: S$3,500 to S$8,000
- Professional indemnity insurance (first year): S$8,000 to S$25,000
- Base capital held: S$250,000
The MAS application fee for a fund-management CMS licence is in the low thousands of Singapore dollars per year of the licence period.
See also the published material at this official source.
Annual running cost stack
Recurring costs centre on the team and compliance. Budget compliance support of S$36,000 to S$100,000 a year (outsourced) or an in-house officer from S$90,000, annual audit S$15,000 to S$35,000, fund administration S$25,000 to S$70,000, MAS returns and ongoing legal S$8,000 to S$25,000, plus office and the salaries of the required professionals. A realistic all-in run rate for a lean A/I LFMC is S$200,000 to S$350,000, rising to S$500,000 or more for a Retail LFMC.
Step-by-step process and timeline
1. Decide A/I versus Retail. 2. Incorporate the company and inject base capital. 3. Appoint the CEO, directors and two professionals. 4. Build the compliance and risk frameworks. 5. Prepare the Form 1 and business plan. 6. File with MAS and clear queries. 7. Meet pre-licensing conditions and receive the licence. Expect MAS review of 3 to 6 months for an A/I LFMC and longer for Retail; the whole project usually runs 5 to 9 months.
Common mistakes and gotchas
The recurring pitfalls are: appointing a CEO who cannot evidence ten years of relevant experience; treating base capital as spendable working capital; weak AML and customer due-diligence procedures; and underestimating the cost of fund administration and audit once a fund is live. Many first-time applicants also forget that the financial-resources requirement is continuous, so a loss-making first year can breach capital rules if the firm is not adequately funded beyond the bare S$250,000.
Outsourced administration and the realistic team
Most new LFMCs run lean by outsourcing fund administration, custody and parts of compliance while keeping the investment team in-house. A typical first-year A/I LFMC team is the CEO, a second investment professional, and a part-time or outsourced compliance officer, supported by an external fund administrator and auditor. This keeps fixed costs manageable while the firm builds assets under management. As the book grows past roughly S$100 million to S$200 million, firms usually bring compliance in-house and add operations and investor-relations staff. Planning the hiring path against projected assets under management is essential, because the financial-resources rules require capital to be maintained continuously and an under-funded firm can breach them in a slow fundraising year.
Ongoing obligations and reporting
An LFMC must submit periodic returns to MAS, maintain a risk-management framework proportionate to its strategies, conduct customer due diligence, value its funds properly and have them audited annually. It must also keep its representatives’ competency current and notify MAS of material changes such as new shareholders or a change of CEO. The Securities and Futures Act 2001 and its subsidiary regulations underpin all of this, and MAS expects the governance to scale as the firm grows. Treating the licence as a living obligation rather than a one-off hurdle is what separates firms that thrive from those that stumble into enforcement.
Related guides on mas licensed fund management company
Explore more across the Raffles group: Exempt Private Company (EPC) mechanics — Costs and fees breakdown, and our related article MAS AML / CFT for licensed entities — Step-by-step walkthrough.
FAQs
What is the difference between an A/I and a Retail LFMC?
An A/I LFMC may serve only accredited and institutional investors, while a Retail LFMC may also serve the general public and faces higher capital, governance and disclosure requirements.
What base capital does an LFMC need?
Both A/I and Retail LFMCs require base capital of S$250,000, maintained on an ongoing basis. Retail LFMCs face additional financial-resources requirements.
How experienced must the CEO be?
The resident CEO of an LFMC should have at least ten years of relevant fund-management experience, and the firm needs at least two directors and two full-time Singapore-resident professionals.
How long does LFMC licensing take?
MAS review usually takes 3 to 6 months for an A/I LFMC; the full project, including incorporation and hiring, commonly runs 5 to 9 months.
Can an LFMC manage a VCC?
Yes. A licensed or registered fund manager can act as the manager of a Variable Capital Company, which is a common pairing for Singapore fund launches.
What happens if my capital falls below S$250,000?
Breaching the financial-resources requirement is a serious matter that must be reported to MAS and remedied. Firms should hold a buffer above the bare minimum, especially in early loss-making years.
Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.