How to Set Up a Family Office in Singapore Successfully
Set up a family office in Singapore to protect the future of the next generations. The family office is highly popular with the rich families for the purpose. In addition to the safeguarding the interests of their offspring, a family office also allows them to optimise their wealth.
There is no doubt that a family office is a powerful tool for bringing efficiency to your asset management. It simplifies your wealth and succession planning and provisions for philanthropy initiatives. It also assist you in effective lifestyle management so that you do not lose or miss the things you love or enjoy.
It is easy to set up a family office in Singapore. The incorporation agents can help you set up a Single-Family Office (SFO) to service members of your family. The Company Law also provides for servicing of members of multiple families through Multi-Family Office (MFO).
Is It a Right Decision to Set Up a Family Office in Singapore?
As per Deloitte ranking 2021, Singapore is one of the main Wealth Management Centre in the world. Singapore ranks second, closely followed by Hong Kong.
Singapore is a highly competitive business hub. It is known for innovation as indicated by 1st ranking in FinTech sector. Its Wealth Management policies are well formed and attract local as well as high-net-worth (HNW) individuals.
The Key Factors that Attract HNW to Singapore
If you want to set up a family office in Singapore to protect and grow your wealth, you should know more about it. Here are factors that can help you take the final plunge.
- Singapore is a transparent and well-managed economy
- You get easy access to bankers, lawyers, company secretaries, and financial experts specialising in wealth management
- Singaporean corporate income tax is charged at the flat rate of 17%
- You don’t have to pay tax on inheritance or wealth and capital gains
- You can easily transfer your profits out of Singapore
- The government provides various tax incentives, rebates, and exemptions
- You benefit from more than 80 double tax avoidance treaties that Singapore has signed with other countries
- You can choose from various service providers to assist you set up company Singapore to run your family office compliantly
- Singapore is politically and economically stable
- As an entrepot, it serves Eastern and Western markets
- It is a pro-entrepreneur jurisdiction known for its strict implementation of law
- You have easy access to world-class medical facilities and schools, colleges, and universities for your kids
- Singapore is a secure and safe place to take your family
Tax Incentive Schemes for a Family Office in Singapore
With its affordable taxes and investment policies, Singapore attracts huge foreign capital investment. Still, it wants its banking sector to be competitive. IN 2023, it updated tax incentive schemes for SFOs. Let us know about these enhancements:
Global Investor Programme
Under Global Investor Programme initiative, you can be a permanent resident of Singapore. However, you must qualify the criteria led down by the authorities. It is granted to you, if have at least 5 years of track record as an entrepreneur, investor or manager. You also need:
- At least SGD 200 million of assets under management to set up a family office in Singapore
- To deploy at least SGD 50 million in the investment categories stipulated by government to get your single-family office
Singapore Resident Fund Scheme
Under the Singapore resident fund scheme, you can claim full tax exemption on the locally sourced funds for your family office. The stipulation is that you must spend SGD 200,000 per year locally.
The tax exemption is granted under Section 13O of the Singaporean Income Tax Act. You may have to meet additional conditions.
Enhanced-Tier Fund Tax Exemption
You can also claim tax exemption on income and gains on specific investments financed with local and offshore funds. Such investments amounting to a minimum of SGD 50 million get tax exemption under Section 13U of the Singaporean Income Tax Act.
Philanthropy Tax Incentive Scheme
Your family office in Singapore, if it is active in philanthropic work, can also claim tax deductions. This scheme came into force on 1 January 2024. It allows qualified donors to claim a 100% tax deduction on offshore donations through qualifying Singaporean intermediaries.
The tax deduction through this scheme is capped at 40% of the qualified donor’s statutory income in Singapore. And, your family office must meet certain conditions to avail the tax benefit.
Set Up a Family Office in Singapore
Before you initiate the process for company registration Singapore, you must have a fair idea about why you are setting up a family office. Be sure to know whether you are setting it up for investment and/or philanthropy or charitable purposes.
You will also consider the amount of funds you will need to set aside to fulfil the purpose of your family office. And you should be very clear about the benefits your HNW family will draw out of the move.
Knowing the objectives of your family office will help you understand its structure and functions. It will also help you resolve its legal responsibilities and taxation.
To set up company Singapore, hire an experienced registered filing agent. These authorised professionals know the process inside out and can be of great help.
- Depending on your needs, select SFO or MFO to establish
- Choose whether to register it as a company or a trust
- Your agent can initiate and complete the company registration Singapore process with ACRA
- Hire experienced providers for services such as managing wealth, tax filing, legal advice, concierge, and charitable donations
- Acquire permits and licences to start your company activities
- Set up compliance frameworks and corporate governance
- Write a feasible business plan
- Open a corporate bank account for your company
- Your provider can help you with installing better internal practices and procedures, the latest accounting software, reporting tools, and data security
- Hire qualified professionals like lawyers, tax consultant, investment managers and certified public accountants
- Write the family charter to control the company powers and activities
Benefits of Setting Up a Family Office
A family office assists you in planning ahead to protect the future of your children. It also helps you with:
- Wealth management
- Get tailor-made financial and investment solutions
- Spread your risk by diversifying assets
- Protect family values and inheritance
Regulatory Requirements a Singapore Family Office must Comply With
If you want to set up a family office in Singapore as an SFO, it may not need a fund management licence. Your SFO will still need to comply with certain criteria to claim tax exemptions under the Income Tax Act 1947.
However, MFO comes under the licensing or regulation under the Securities and Futures Act (SFA). For your MFO, you will need to apply to MAS and acquire a a capital market services licence to conduct its activities. Still, check with your corporate services provider for advice.
We at, SBS Consulting, assign a manager to you to take the charge of your task. This professional advice you on each stage of to set up a family office in Singapore successfully and in compliance with the law. In addition, we also provide accounting and taxation-related services.
A family office assists you in planning ahead to protect the future of your children. It also helps you with:
Contact us at +65-6536 0036 or email us at info@sbsgroup.com.sg to ask our experts how to set up a family office in Singapore hassle-free.
Also Read: Cost to Register a Company in Singapore
