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Setting up family office in Singapore is similar to setting up company in Singapore, with a few more steps and considerations involved.
Singapore has a reputation as a jurisdiction with a stable government and robust legal structures that is conducive for business. It has a measured approach to regulation with agencies such as the Economic Development Board (EDB) and Monetary Authority of Singapore (MAS) promoting a business-friendly environment.
Wealthy families worldwide are always looking for ways to manage their wealth in a more efficient and professional manner, often by establishing family offices.
Factors that make Singapore an attractive location to set up a Single Family Office include:
In Singapore, a Single Family Office (SFO) manages the wealth of members of a single family and is typically incorporated as a private limited company limited by shares. These shares may be held by the holding company of the family office, by common shareholders with the family fund entity, or by a family trust.
Setting up an SFO instead of having ad-hoc solutions to resolve wealth management problems for the family has many benefits. These benefits include:
The graphic below gives a typical structure of a family office and the general outline of activities of the various components.
There are various tax incentive schemes for SFOs established in Singapore. These are:
What is “Family”?
Under the Section 13(O) or Section 13(U) tax incentive scheme, the Monetary Authority of Singapore (MAS) defines “family” as individuals who are lineal descendants from a single ancestor, as well as the spouses, ex-spouses, adopted children and step-children of these individuals.
Minimum spending requirements for SFO
Family offices under the S13O scheme must incur a minimum total business expenditure of S$200,000 annually. This is governed by a tiered framework based on the value of the Assets Under Management (AUM).
Single family offices under the S13U scheme must incur a minimum local business spending of S$500,000 annually. For the local business spending requirements, expenses incurred should relate to the operating activities of the fund, as opposed to financing activities.
All minimum spending requirements are pro-rated from the commencement date of the incentive to the first financial year end after commencement. After that, the full minimum spending requirements apply for all subsequent years. Incorporation expenses would not be eligible as business spend as they are deemed capital in nature.
For more requirements, read our FAQ below.
There are a few tax exemption schemes available to a single family office in Singapore. The table below gives an outline of the various schemes.
| Section 13D The Offshore Fund Tax Exemption Scheme | Section 13O The Onshore Fund Tax Exemption Scheme | Section 13U The Enhanced Tier Fund Tax Exemption Scheme | |
|---|---|---|---|
| Fund’s Legal Form | Companies, trusts and individuals | Singapore incorporated company, including VCC | Any, including Singapore VCC |
| Fund’s Residency | Non-tax resident of Singapore with no presence in Singapore | Singapore tax resident | Any |
| Fund Administrator | No restriction | Singapore based | No restriction |
| Assets under Management (AUM) | None | Fund must have a minimum fund size of S$10 million at the point of application, and commit to increasing its AUM to S$20 million within a 2 -year grace period. | Minimum of S$50 million (committed capital concession available for real estate, infrastructure, private equity, debt and credit funds) |
| Approval Requirement | No approval required from the MAS | Approval required from the MAS | Approval required from the MAS |
| Minimum Annual Business Spending | None | Subject to a tiered framework for minimum business spending as follows: – S$200,000 for AUM of less than S$50 million – S$500,000 for AUM of S$50 million and above, but less than S$100 million – S$1,000,000 for AUM of S$100 million and above | Subject to a tiered framework for minimum local business spending as follows: – S$500,000 for AUM of S$50 million and above, but less than S$100 million – S$1,000,000 for AUM of S$100 million and above |
| Minimum number of Experienced Investment Professionals | No | At least 2 investment professionals | At least 3 Investment professionals, with at least one IP being a non-family member |
| Local Investments Requirements | No restrictions | Yes, invest at least 10% or S$10 million of AUM (whichever is lower) in local investments | |
| Reporting Requirements | Annual statements to investors Tax filing to IRAS for non-qualifying investors | Annual statements to investors Tax filing to IRAS for non-qualifying investors | No requirement |
| Income Tax Filing | Generally not required | Annual tax return | Annual tax return |
| Annual Declaration to MAS | Not required | Required | Required |
| Exemption Restricted to “Specified Income” from Designated Investments | Yes | ||
We are a professional services company that can help families handle the setting up family office in Singapore. We have a comprehensive ecosystem of partners (including lawyers, auditors, tax advisers, property and insurance agencies, fund administrators, banks, and prime brokers/custodians) who can help you meet your needs. As such, we can provide customised solutions based on each family’s needs and goals.
Our services include:
There are generally 2 different entities established under an SFO setup: the SFO and the fund entity. The SFO is the management entity that fulfils the family’s needs and manages the family assets held by the fund entity.
The incorporated fund entities may be variable capital companies (VCC) that the SFO invests in or sets up on its own, subject to regulatory requirements.
For family offices registering under the S13O scheme – locally incorporated structures – the minimum fund size is S$10 million (correct as of 1 May 2023) at the point of application. Subsequently, the fund must increase its assets under management (AUM) to S$20 million within two years.
The value of the minimum AUM for the S13U scheme is S$50 million (correct as of 1 May 2023).
Family offices under the S13O scheme must hire at least two investment professionals (IP). Family offices that cannot hire two IPs by the point of application will be given one year to hire the second IP.
Under the S13U scheme, family offices are required to hire at least 3 IPs, with at least one IP being a non-family member.
An “investment professional” means Traders, Research analysts, and Portfolio managers. They must earn more than S$3,500 monthly and have substantial industry experience.
Investors who meet the minimum investment of S$2.5 million in a Singapore start-up or business may apply for permanent residence status for themselves and their immediate family under the Global Investor Programme (GIP).
Under the GIP SFO option, the family office principal (the person managing the SFO) may apply for permanent residency in Singapore. However, the SFO must have an Net Investible Assets* of at least S$200 million, with a minimum of S$50 million held in Singapore any of the 4 investment categories of:
Furthermore, the principal must have at least 5 years of entrepreneurial, investment or management track record and have net investible assets of at least S$200 million.
*Net Investible Assets include all financial assets, such as bank deposits, capital market products, collective investment schemes, premiums paid in respect of life insurance policies and other investment products, excluding real estate. The Singapore government has discretion to assess suitability of applicants’ Net Investible Assets.