2026 Budget Law Introduces Tax Benefits for Investment Funds Activities

We have summarized the key features below:

I.  Tax Benefits for Fund Managers

The tax benefits available to qualifying fund managers are the following:

        1) An overall complementary income tax (profit tax) rate of 5% levied over the taxable income derived from carrying out fund management business.
        2) Full exemption of complementary income tax (profit tax) over performance-based remuneration derived from the management of private funds.
        3) General exemption from stamp duty payable in connection with activities related to investment fund management (with certain exceptions).
        4) Exemption from stamp duty for the acquisition of commercial real estate to be used for the operation of its own business activities, with a limit of one property per applicant.

To qualify for the abovementioned tax benefits, fund managers need to be licensed under the Investment Funds Law and must meet all the following conditions:

        1) Be registered with the Macau Commercial Registry and be headquartered in Macau
        2) Be a Group A complementary income (profits) taxpayers
        3) Manage an assets’ portfolio equal to or greater than MOP 300 million
        4) Have operating premises and core management team localized in Macau
        5) Employ a minimum of 3 Macau residents working in investment fund activities, and
        6) Have no debts to the Macau SAR subject to enforced collection through tax execution proceedings.

II.  Tax Exemptions for Real Estate Portfolios

Real estate owned by investment funds formed under the Investment Funds Law, or by their Macau-domiciled project vehicles, is exempt from Urban Property Tax and from Stamp Duty on leasing activities.

III.  Tax Exemptions for Fund Investors

Complementary Income (Profits) Tax over interests or distributed profits from investment funds domiciled in Macau, as well as income derived from the sale or other forms of disposal of fund participation units is exempted.

IV.  Granting of Benefits 

The director of the Macau Tax Bureau will make a determination on granting the above-mentioned tax benefits following review of:
For Item I: an opinion issued by the Macau Monetary Authority confirming that the cumulative requirements for the Fund Manager have been met;
For Item II: an opinion issued by the Macau Monetary Authority confirming that the qualifying conditions have been met; and
For Item III: the Complementary Income (Profits) Tax declarations and supporting information submitted by the taxpayer.