Family Office Types

1. Single Family Office (SFO)

A family office established by a single family is called a single family office SFO. It is a private company where a single family manages its own assets. The assets are placed in a family fund, and the fund investment is selected by the applicant himself or with reference to a financial planner; a legal entity established by a wealthy family to conduct wealth management, wealth planning, and provide other services to family members. The operating expenses are borne by one family, which is more expensive, but privacy is more guaranteed.

Singapore's single family office SFO is exempt from the registered fund management company (RFMC) and licensed fund management company (LFMC) fund licenses. Singapore's single family office can not only help applicants achieve immigration purposes, but also enjoy tax-free benefits on investment income, thereby achieving the goals of identity, asset planning, and wealth inheritance in one step.

2. Multi Family Office (MFO)

A family office established by multiple families together is called a multi-family office MFO, and these families are not necessarily related to each other. There are three main sources: the first is from single family offices (SFOs) accepting other family clients, the second is from private banks to better serve large clients, and the third is from professionals.

Singapore multi-family offices (MFOs) require fund management company (RFMC) and licensed fund management company (LFMC) fund licenses, similar to enterprise asset management (EAM).

Family Office Singapore

The Singapore Family Office is a tax exemption program for high net worth individuals launched by the Monetary Authority of Singapore (MAS). Through a modern corporate management system, it provides high net worth families with overseas investment, asset allocation, tax planning, immigration planning and family wealth inheritance services. It is an effective corporate structure to maintain family cohesion and enable sustainable inheritance of family wealth.

Singapore has a fairly loose access to single family offices, which can apply for a financial license exemption. In February 2019, Singapore introduced tax incentives for funds, of which three fund tax exemption policies 13R (now 13O), 13X (now 13U) and 13CA (now 13D) were extended to December 31, 2024. Fund companies registered before this date can enjoy this tax exemption for life.

On April 11, 2022, the Monetary Authority of Singapore (MAS) announced the updated terms of the tax exemption program for Sections 13O and 13U for funds directly managed by family offices. Under the new regulations, the investment threshold is raised. The new regulations came into effect on April 18.

Singapore Family Office Tax Policy

The minimum asset size requirement has been increased from 5 million SGD, which is the general consensus in the market, to 10 million SGD, and the second year requires the management of at least 20 million SGD. The requirement for hiring professional investors has been increased from 1 to 2 professional investors for 13O. However, this change is not difficult to achieve. The main applicant and his family can meet the requirement by applying for EP at the same time. The professional investors for 13U have been changed from "not limited to family members inside and outside" to "at least one external professional must be hired". The requirements for business expenses have been changed from "not limited to family members inside and outside" to "at least one external professional must be hired". The requirements for business expenses have been changed from 200,000 SGD to 500,000 SGD for the minimum expenses of the 13U policy. The requirements for local investment have been raised by the Monetary Authority of Singapore. At least 10% or 10 million SGD (the lower of the two) of the family office funds must be invested in Singapore. The investment methods include: 1. Stocks listed on the Singapore Exchange; 2. Compliant securities; 3. Funds issued by local compliant fund companies; 4. Private investment in unlisted local companies.

Advantages of family offices

Low requirements: no rigid requirements such as gender, education, English, etc., and no residency requirements;

Singapore identity: can obtain Singapore tax residency;

Overseas assets: can realize overseas asset allocation;

Special tax exemption: The Monetary Authority of Singapore MAS specially approves tax exemption and license exemption;

Wealth inheritance: conduct wealth management and realize family inheritance;

Full family immigration: Fund managers of family offices can obtain two or three EP (Employee Pass) quotas. After meeting the conditions (the main applicant holds a work permit for about two years), their spouse and children under the age of 21 can apply for PR (Permanent Resident, i.e. Singapore Green Card) status at the same time;

Autonomy: EP status is approved first, then investment, and the investment initiative is completely in the hands of the customer;

Stable renewal: The applicant's establishment of a family office is a form of self-employment, and is not subject to the employer, and EP renewal is guaranteed;

No need to operate: Compared with general self-employed EPs, there are no company operation requirements.

Family Office Application Process

1. Evaluation/contract signing;

The application for a family office in Singapore is relatively complicated, and there are certain requirements for the applicant's conditions. For example, the applicant needs to provide personal information, such as passport, identity information, email, contact number, etc.; in addition, the Singapore government will appoint a professional agency to conduct an evaluation. At this time, the applicant must also provide proof of his overseas home address and basic information of the two companies (including company name, equity information, and dividend information).

2. Collect information and make an appointment for an interview with the Monetary Authority of Singapore;

After the evaluation is completed, the applicant must collect materials for the work permit EP and the application for opening a personal account in a private bank, etc. This step is actually very difficult, and it is necessary to hire a professional agency to assist.

3. Register two Singapore companies-family office and fund company;

After the materials are collected and approved, the applicant can register two companies in Singapore. This process is relatively simple. After successful registration, you must go to the bank to handle relevant document procedures.

4. Open personal and corporate bank accounts (including retail and private banking accounts);

For the sake of safety, you are now required to submit a detailed business plan when applying for a Singapore family office. After the plan is approved, you can submit source documents and apply for tax exemption to the MAS.

5. Write a business plan, prepare EP application materials and fund exemption documents;

When the source documents are submitted to the MAS, the other party will conduct a careful review and immediately give a principled approval after the review is correct. At this time, the applicant can apply for a MASNET account and enjoy formal tax exemption.

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