How to set up a Family Office in Singapore: A Comprehensive Guide

1. Executive Summary

Singapore is a leading global hub for family offices, recognized for its strategic location, political stability, robust legal framework, and attractive tax incentives. By the end of 2024, over 2,000 family offices benefited from tax incentives, marking a 43% increase from the previous year.

Establishing a family office in Singapore involves choosing between Single Family Offices (SFOs) and Multi-Family Offices (MFOs),selecting a legal structure (e.g., Private Limited Company, Trust, or Variable Capital Company (VCC)), and navigating MAS regulations and tax incentives. This complex process requires meticulous planning and engagement with professional advisors, including law firms in Singapore, family office lawyers, commercial lawyers, corporate lawyers and investment lawyers, to ensure successful setup and long-term operational efficacy.

At Triangle Legal LLC, our corporate lawyers advise family offices on how to secure the necessary licenses from the Monetary Authority of Singapore (MAS) . Contact us now for a complimentary and confidential discussion about your case.

2. Introduction to Family Offices in Singapore

A family office is a private wealth management firm dedicated to preserving and growing the financial and personal affairs of high-net-worth families across generations. Its core functions includes comprehensive investment management, financial planning, family governance(including succession planning), philanthropy, and administrative services.

Singapore's appeal as a prime jurisdiction to establish a family office stems from

• Political and Economic Stability: A secure, confidential environment with low corruption rates
• Robust  Financial Sector: A dynamic ecosystem supporting wealth management
• Targeted  Tax Incentives: Attractive schemes like Sections 13D, 13O, and 13U  offer income tax exemptions, alongside a Philanthropy Tax Incentive Scheme
• ‍Strong  Legal and Regulatory Framework: MAS and EDB actively refine the regulatory environment, with a strong and robust legal system rooted in English Common Law, vital for global asset management.‍
• Immigration  Opportunities: Programs like the Global Investor Programme (GIP) facilitate relocation.

3. Types of Family Offices: Single vs. Multi-Family Offices

The choice between a Single Family Office (SFO) and a Multi-Family Office (MFO) is a foundational decision for a family office in Singapore.

Single Family Office (SFO)

A SFO exclusively manages the assets and affairs of a single wealthy family.

• Advantages: Highly customized services, enhanced privacy, deep understanding of family needs, and direct control.
• Suitability: Ultra-high-net-worth families (often exceeding US$100 million) prioritizing control, customization, and privacy.
• Regulation: Generally exempt from MAS licensing under the Securities and Futures Act (SFA) if managing assets solely for family members; may apply for specific exemptions if conditions are not fully met.

Multi-Family Office (MFO)

A MFO manages assets and provides services for two or more unrelated families or groups.

Benefits: Cost-sharing advantages, access to diverse specialists, and broader investment opportunities due to pooled resources.

• Suitability:  Families seeking professional wealth management without the high costs and complexities of an SFO.
• Regulation:  Typically requires a Capital Markets Services (CMS) license from MAS, as they manage third-party funds.

MAS's flexible regulatory approach, with exemptions for SFOs and regulation for MFOs, attracts a diverse range of wealthy families, strengthening Singapore's position as a reputable and stable financial hub.

4. Legal Structures for Family Offices

Choosing the right legal structure is fundamental for a family office in Singapore, impacting governance, regulatory obligations, and operational flexibility.

Private Limited Company (PLC) Structure

A widely adopted structure due to its distinct legal identity and limited liability, safeguarding personal assets. PLCs are registered with ACRA. For SFOs, a common setup involves a Singapore-incorporated SFO company managing an onshore or offshore Fund entity, providing investment management and administrative services.

Trust Structure

A legal arrangement where a settlor transfers property to a trustee for beneficiaries.

Advantages: Facilitates succession planning, offers asset protection from creditors and litigation, ensures confidentiality, provides wealth planning flexibility, and can offer tax efficiencies.

• Requirements: Must meet "three certainties" (intention, subject matter, objects). Administered by institutional trustees or private trust companies (PTCs).

Variable Capital Company (VCC) Structure

Introduced in 2020, the Variable Capital Company (VCC) is an innovative, flexible, and tax-efficient corporate structure for investment funds, suitable for both traditional and alternative strategies, open-ended and closed-ended funds.

• Benefits: Flexible fund management, segregation of assets via sub-funds for  enhanced asset protection and succession planning, tailored  funds, umbrella efficiency (shared directors/service providers for cost savings), built-in confidentiality (non-public financial statements), and tax efficiency (single entity for filing, eligible for 13O/13U incentives).
• Requirement: Must be managed by a Singapore-licensed fund manager (external firm or licensed family office).

The VCC Fund framework enables family offices to operate with institutional-level sophistication, agility, robust asset protection, and superior tax efficiency, reinforcing Singapore's reputation as a well-regulated financial hub.

5. The Step-by-Step Setup Process

Establishing a family office in Singapore typically follows a structured five-phase process:

Phase 1: Defining Objectives and Scope

Clearly articulate the family office's purpose (investment, estate planning, philanthropy) and decide between an SFO or MFO. Draft a comprehensive business plan.

Phase 2: Choosing and Registering the Legal Structure with ACRA

Select the most suitable legal structure (Private Limited Company Singapore, Trust Singapore, or Variable Capital Company (VCC)) and register with ACRA.

• PLC  Registration: Secure name, appoint resident director/secretary, establish physical address, define share capital (min S$1), create     constitution, and submit via ACRA's BizFile+.
• Trust Setup: Decide form (will, deed), select Singaporean trustee, identify assets/beneficiaries, and draft Trust Deed (plus Letter of Wishes for discretionary trusts)
• VCC Setup: Adhere to VCC naming guidelines, provide registered office, appoint Singapore-licensed fund manager, appoint resident director(s) and company secretary, appoint auditor, and establish VCC constitution.

Phase 3: Applying for Licenses and Tax Incentives with MAS

• Licensing:  SFOs may qualify for CMS licensing exemption; MFOs generally require a CMS license. All VCCs must be managed by a Singapore-licensed fund manager.
• Tax Incentives: Apply for Sections 13O and 13U schemes once registered and criteria are met. New applications (from Jan 2, 2025) are via the MAS Tax Scheme portal; processing can take 3-18 months.
• Regulatory Approval: Initial MAS approval is required for setup and subsequent changes in investment strategy. A private banking account with an MAS-licensed financial institution is mandatory.

Phase 4: Building the Team and Operational Setup

Recruit qualified professionals (investment, legal, tax, compliance). At least one investment professional must be unrelated to the family for tax incentives (e.g., 13O requires 2 IPs, 13U requires 3 IPs, each earning ≥ S$3,500/month). Secure office space, IT systems, and external service providers (e.g., lawyers in Singapore, accountants, fund administrators).

Phase 5: Developing Governance Policies and Investment Plans

Draft comprehensive governance rules (e.g., Family Charter)defining roles, responsibilities, and succession plans. Develop a long-term investment strategy aligned with risk tolerance. Implement robust internal controls for regulatory compliance (AML/CFT) and conduct regular risk reviews.

This structured approach ensures meticulous planning and patience, positioning the family office as a sophisticated, enduring wealth management platform.

6. Regulatory Framework and Tax Incentives

Singapore's regulatory framework and MAS tax incentives, overseen by MAS, significantly bolster its appeal as a family office hub.

MAS is Singapore's central bank and financial regulator, fostering a supportive ecosystem for family offices through a comprehensive legal, tax, and regulatory framework.

Capital Markets Services (CMS) Licensing and Exemptions for Family Offices

• General Rule: Entities engaged in fund management generally need a CMS license under the SFA.
• SFO Exemption: SFOs are typically exempt if they manage assets exclusively for family members and the SFO company is part of the same corporate group as the fund vehicle. Otherwise, they may apply for a specific exemption.
• MFO  Requirement: MFOs generally require a CMS license.
• VCC  Requirement: Variable Capital Companies must be managed by a Singapore-licensed fund manager.

Key Tax Incentive Schemes (under Income Tax Act 1947)

These schemes offer exemptions on "specified income" from "designated investments" for qualifying funds managed by Singapore-based fund managers.

• Offshore  Fund Exemption Scheme (Section 13D): For offshore funds managed by a local fund manager. No direct MAS application; eligibility reviewed     annually by IRAS.
• Onshore Fund Incentive Scheme (Section 13O): For Singapore-incorporated companies managed by a Singapore fund manager.
• Enhanced-Tier Tax Incentive Scheme (Section 13U): Broader scheme for offshore and Singapore-based funds, covering various structures.
• Philanthropy Tax Incentive Scheme: For SFOs under 13O or 13U, offering 100% tax deduction for overseas donations (capped at 40% of statutory income) through local intermediaries.

Recent Updates (Effective Jan 1, 2025):

• Revised Quantitative Criteria: Increased minimum AUM (13O: S$5M; 13U: S$50M), new IP requirements for 13O (min 2 IPs), and tiered Local Business Spending (LBS) requirements (starting S$200,000).
• Removed Conditions: Prior 13O "newly set-up company" condition removed; MAS approval for investment strategy changes removed.
• Waiver of 30/50 Rule: Waived for 13O funds structured as trusts/unit trusts incentivized under 13D (from YA 2025).
• New  Section 13OA: Extends 13O to Singapore-registered Limited Partnerships (LPs).
• New  Application Process: All new applications (from Jan 2, 2025) via the new MAS Tax Scheme portal.

These updates signal MAS's preference for family offices with substantial assets and a demonstrable commitment to generating economic activity in Singapore, requiring a more rigorous qualification process and a genuine operational footprint.

I. Minimum AUM Requirements for MAS Tax Incentives

• Section 13O: Funds must maintain at least SGD 5 million in designated investments annually. Previously, no specific AUM threshold existed.
• Section 13U: Funds are now required to maintain the SGD 50 million AUM threshold annually, ensuring sustained investment activities.

II. Tiered Local Business Spending (LBS)

The following minimum LBS has been introduced for both schemes:

• AUM less than SGD 250 million: Minimum LBS of SGD 200,000 annually.
• AUM between SGD 250 million and less than SGD 2 billion: Minimum LBS of SGD 300,000 annually.
• AUM of SGD 2 billion or more: Minimum LBS of SGD 500,000 annually.

III. Investment Professional (IP) Requirements

• Section 13O: Requires at least two IPs who are tax residents in Singapore and at least 1 who is not a family member of the beneficial owners.
• Section 13U: Maintains the existing requirement for three IPs with relevant expertise and at least 1 who is not a family member of the beneficial owners.

7. Roles of Professional Advisors in Family Office Setup and Operation

Establishing and managing a family office in Singapore is a complex undertaking that requires specialized legal expertise. At Triangle Legal, our team of experienced lawyers in Singapore is dedicated to providing comprehensive and tailored legal solutions to ultra-high-net-worth families and their advisors. We act as your trusted partner, guiding you through every stage of the family office establishment and ongoing operations.

AT Triangle Legal, our Services Include:

• Strategic Legal Structuring: We are a family office law firm and our family office lawyers provide expert advice on selecting the optimal legal structure for your family office and its underlying fund entities, whether it's a Private Limited Company Singapore, a Trust Singapore, or a Variable Capital Company (VCC). We ensure the chosen structure aligns perfectly with your family's unique objectives for control, privacy, and asset protection.
• Regulatory Compliance and Licensing: We navigate the intricate MAS regulatory landscape on your behalf, advising on Capital Markets Services (CMS) licensing requirements, exemptions for Single Family Offices (SFOs), and the specific obligations for VCC Funds. Our funds lawyers ensure full adherence to the Securities and Futures Act (SFA) and other relevant regulations.
• Comprehensive Legal Documentation: Our team meticulously drafts and reviews all necessary legal documents, including company constitutions, trust deeds, VCC constitutions, shareholders' agreements, and various service agreements. We ensure these documents are robust, legally sound, and precisely reflect your family's intentions.
• Tax Incentive Applications: We assist with the application process for Singapore's attractive MAS tax incentive schemes, such as Sections 13O and 13U, ensuring your family office meets all qualifying criteria to optimize tax efficiencies.
• Family Governance and Succession Planning: Our legal experts help you establish robust family governance frameworks, including drafting Family Charters, defining decision-making processes, and formulating comprehensive succession plans to ensure smooth intergenerational wealth transfer and harmony.
• Investment Legal Advisory: Our investment lawyers provide ongoing legal counsel for your family office's investment strategies, including advice on asset acquisition, disposition, and compliance with investment-related regulations.
• Ongoing Compliance and Risk Management: We help implement and maintain stringent Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) policies, manage Common Reporting Standard (CRS) obligations, and ensure timely tax filings with the Inland Revenue Authority of Singapore (IRAS).
• Coordination with Professional Network: We collaborate seamlessly with other essential professional advisors, including tax specialists, fund administrators, and auditors, to provide a holistic and integrated support system for your family office.

Partner with Triangle Legal to navigate the complexities of establishing and operating your family office in Singapore with confidence, ensuring long-term wealth preservation and growth. Contact us today for a personalized consultation.

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