The Monetary Authority of Singapore (MAS) oversees the regulatory framework for family offices. While family offices do not need a specific license from MAS if they serve only related household members, they should adhere to certain guidelines and ensure proper structuring. For an SFO, the family must setup a legal entity, typically an exclusive limited company, to work the office. The entity must abide by 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 including the household members, their spouses, and direct descendants. The household 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 household 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, at the mercy of meeting specific criteria, such as for instance 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 household office in Singapore involves setting up the correct legal structure. Most families choose for a private limited company due to its flexibility and limited liability protections. The company will need to have one or more director who is ordinarily resident in Singapore, and it must maintain a registered office address in the country. Additionally, the household office must draft an obvious charter or mandate outlining its governance structure, operational guidelines, and investment strategy.
A successful family office requires an experienced team to handle its operations. Singapore's pool of financial professionals, including investment advisors, tax experts, and legal consultants, helps it be a perfect location for staffing a family office. Work must employ at least three investment professionals to qualify for tax incentives. These professionals should have relevant experience and qualifications to handle the family's wealth effectively and conform to regulatory requirements Singapore family office requirements.Compliance with local regulations and ongoing reporting obligations is important for maintaining the operational integrity of a family group office in Singapore. Any office must abide by 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 setting up and managing a household office, engaging professional advisors is crucial. Legal advisors can benefit structuring any office and ensuring compliance with regulatory requirements, while tax advisors can optimize the family's tax position and navigate the application form process for tax incentives. Investment advisors might help develop and execute the family's investment strategy, aligning with their financial goals and risk tolerance. These professionals provide invaluable support, ensuring the family office operates efficiently and effectively.Establishing a family 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 these wealth and securing their financial legacy for future generations.