Updates on Singapore Family Offices Tax Incentives

With the recent statements made by Mr. Alvin Tan, Minister of State, Ministry of Trade and Industry and Minister of Culture, Community and Youth, and Board member of MAS, the Singapore government is now encouraging family offices to make investments in local companies.

What does this mean for Singaporean Family Offices?

Singapore has earned a reputation as a desirable destination for high net-worth families (HNWIs) and there has been an increase in the number of Family Offices established to manage the affairs of these high net-worth families in recent years. Singapore’s legal and tax landscape, its political stability and conducive pro-business environment have contributed to its attractiveness as a wealth management hub for HNWIs.

On 11 April 2022, the Monetary Authority of Singapore (MAS) has updated the conditions and procedural requirements for a new set of guidelines. With the new regulations, these encourage more families offices to be established and at the same time local companies will benefit greatly from such scheme.

Some of the new guidelines are summarised below:

Requirements	Section 13O (formerly Section 13R) of the Act	Section 13U (formerly Section 13X) of the Act
Eligibility	The Enhanced-Tier Fund Tax Incentive Scheme, or Section 13O of the Act, exempts from Tax the income earned throughout each basis period in any year by a family office in Singapore.	The Enhanced-Tier Fund Tax Exemption Scheme, or Section 13U of the Act, exempts from tax the income arising from funds managed by a Singapore-based family office.
Minimum Fund Size (AUM)	a) Minimum fund size of S$10 million at the point of application b) The fund commits to increasing its AUM to S$20 million within a 2-year grace period	Minimum S$50 million at the point of application
Minimum Number of Investment Professionals	At least two investment professionalsemployed at the point of application, and will be given a one-year grace period to employ the second investment professional if it fails to do so by the point of application	At least three investment professionals employed at the point of application, with at least one investment professional being a nonfamily member, and will be given a one- year grace period to employ one nonfamily member as an investment professional if they are unable to do so by the point of application
Minimum Annual Business Spending	a) S$200,000 annual business spending if the Fund’s AUM is less than S$50 million; b) S$500,000 annual business spending if the Fund’s AUM range is between S$50 million and S$100 million; or c) S$1 million annual business spending if the Fund’s AUM is at least S$100 million

SW Wealth Services offers Single Family Office (SFO) which manages assets for or on behalf of only one family and is wholly owned or controlled by members of the same family. Read here for our services covered or you can talk to us for more details.