The Monetary Authority of Singapore (MAS) oversees the regulatory framework for family offices. While family offices don't demand a specific license from MAS if they serve only related family unit members, they have to comply with certain guidelines and ensure proper structuring. For an SFO, the household must create a legal entity, typically an exclusive limited company, to use the office. The entity must adhere to local company laws, including registration with the Accounting and Corporate Regulatory Authority (ACRA) and compliance with the Companies Act.The MAS provides a broad definition of family, typically like the family unit members, their spouses, and direct descendants. The family office must demonstrate so it serves only these related parties. For tax incentive purposes, particularly underneath the Enhanced-Tier Fund Scheme (13X) or the Financial Sector Incentive – Fund Management Scheme (13R), the family office must meet minimum asset under management (AUM) requirements, typically starting at SGD 50 million.
Singapore offers several tax incentives to attract family offices. The Enhanced-Tier Fund Scheme (13X) and the Financial Sector Incentive – Fund Management Scheme (13R) are particularly relevant. These schemes provide tax exemptions on qualifying income from designated investments, susceptible to meeting specific criteria, such as for example minimum spending requirements on local business costs and hiring at the very least three investment professionals. These incentives make Singapore an attractive hub for family wealth management.Establishing a family group office in Singapore involves creating the correct legal structure. Most families opt for a private limited company because flexibility and limited liability protections
Singapore family office requirements. The company should have one or more director who's ordinarily resident in Singapore, and it must maintain a registered office address in the country. Additionally, the family office must draft an obvious charter or mandate outlining its governance structure, operational guidelines, and investment strategy.
A fruitful family office requires an experienced team to manage its operations. Singapore's pool of financial professionals, including investment advisors, tax experts, and legal consultants, helps it be a great place for staffing a family group office. Any office must employ at the very least three investment professionals to qualify for tax incentives. These professionals needs to have relevant experience and qualifications to control the family's wealth effectively and conform to regulatory requirements.Compliance with local regulations and ongoing reporting obligations is critical for maintaining the operational integrity of a family group office in Singapore. The office must adhere to anti-money laundering (AML) and counter-terrorist financing (CTF) regulations, conduct regular audits, and submit annual financial statements to ACRA. Additionally, family offices benefiting from tax incentives underneath the 13X and 13R schemes must meet annual reporting requirements to MAS, demonstrating continued compliance with the scheme's conditions.
Given the complexity of creating and managing a household office, engaging professional advisors is crucial. Legal advisors can help with structuring any office and ensuring compliance with regulatory requirements, while tax advisors can optimize the family's tax position and navigate the application process for tax incentives. Investment advisors will help develop and execute the family's investment strategy, aligning with their financial goals and risk tolerance. These professionals provide invaluable support, ensuring the household office operates efficiently and effectively.Establishing a family group office in Singapore offers numerous benefits, from tax incentives to access to a highly skilled workforce. However, it requires careful planning and adherence to regulatory and operational requirements. By understanding the legal framework, establishing the right structure, and engaging experienced professionals, families can successfully establish a household office in Singapore, ensuring the effective management of their wealth and securing their financial legacy for future generations.
