This is a thought leadership article by PrimeGlobal member firm Joe Tan & Associates PAC which looks at setting up a family office in Singapore. 

There is tremendous growth of wealth and affluence in the Asian region. Due to the exponential increase in the number of high net worth individuals (HNWI)and their families, this has resulted in a deep concentration of wealth.

From the US and Europe to Asia now, the family office concept has emerged to be a wealth management solution for high net worth individuals (HNWI) and their families in the Asian region. Singapore is trying to promote family office and hedge funds. According to Senior Minister Tharman Shanmugaratnam, there are an estimated 200 single-family offices in Singapore managing assets of about US$20bn.

GOOGLE co-founder Mr Brin is planning to set up a family office in Singapore. Mr Brin is the world’s ninth-richest person with a net worth of US$86.5 billion. He is the latest tycoon to take advantage of Singapore's low taxes, high security and generous incentives for family offices.

Other well-known personalities include the family office of James Dyson, the billionaire founder of vacuum cleaning giant Dyson. James Dyson who has decided to relocate the company head office to Singapore from the UK has a net worth of about US$11.9 billion.

The objective of setting up a family office is the preservation, growth and intergenerational transfer of HNW family’s assets and investments. Broadly speaking, a single-family office is an organizational structure that manages the financial and personal affairs of one wealthy family.

Singapore ranks highly as one of the preferred countries in Asia for the setting up of fund vehicles. The main reasons why Singapore is a preferred choice are -

  • Stable government
  • Business friendly environment
  • Well-regulated financial hub/ Transparency of regulations.
  • Attractive tax incentives

Generic Scheme – Single Family Office (SFO)

Family members set up and therefore are owners of the Family/Holding Company. This legal entity manages and oversees the financial and personal matters of the entire family.

However, one can customise the structure to achieve the HNW families’ specific needs and goals which are:

  • Structure of the family office vehicle
  • Choice of assts/investments
  • Maximise the tax incentives


TAX REGIME

These are the tax incentives accorded to the family office –

  • Onshore Fund Tax Incentive
  • Enhanced-Tier Fund Exemption
  • Variable Capital Companies Fund tax incentive

The characteristics of each scheme are as follows:

Onshore Fund Tax Incentive scheme

  • Approval from the MAS (Monetary Authority of Singapore) re application of tax exemption scheme.
  • Fund Administrator has to be a company (including Variable Capital Company), resident in Singapore, holding a capital market service (CMS) license.
  • Shareholding/investors of the company – combination of Singapore and non-Singapore investors.
  • Fund can access Singapore’s tax treaty network.

  • No restriction on the quantum of assets in the fund.
  • Quantum of fund business expenses should be at a minimum of S$200,000 per annum. 

Enhanced-Tier Fund Exemption

  • Approval from the MAS re application of tax exemption scheme.
  • Fund Administrator has to be a company (including Variable Capital Company), resident in Singapore, holding a capital market service (CMS) license.
  • Shareholding/investors of the company – no restriction whether Singapore and/or non-Singapore investors.
  • The fund should have a minimum quantum of S$50 million.
  • Quantum of fund local business expenses should be at a minimum of S$200,000 per annum.


Variable Capital Companies

  • Variable Capital Companies (VCC) incorporated under the VCC Act are treated as companies incorporated under the Companies Act for income tax purposes.
  • The Variable Capital Company (VCC) is a new corporate structure for investment funds constituted under the Variable Capital Companies Act which took effect on 14 Jan 2020. This is a new corporate structure for investment funds that can be used across a wide range of fund strategies.
  • In addition to the incorporation of new funds, the VCC framework also allows fund managers to redomicile existing overseas investment funds with structures comparable to that of a VCC by transferring their registrations to Singapore as VCC’s.
  • A VCC can be set up as a single fund structure or an umbrella fund.

Content by:

Joe Tan & Associates PAC

JDT Management Services Pte Ltd / Joe Tan & Associates PAC is an established accounting firm in Singapore offering company registration, accounting, auditing and taxation services to MNC's, SME's and start-ups with a total staff strength of 28 consisting of accounting professionals and specialty team members. We are licensed by Accounting and Corporate Regulatory Authority (ACRA) as a Filing Agent to incorporate and maintain Companies as well as to carry out statutory audits and assurance services for companies.

Learn more