BUSINESS ARTICLE

How To Set Up a Family Office in Singapore Successfully

How to set up a family office in Singapore successfully

How To Set Up a Family Office in Singapore Successfully

boardroomsuperadmin Business Insights, Corporate Secretarial

The family office is an increasingly popular business entity in Singapore. It provides affluent families with the opportunity to formally safeguard and optimise their wealth for the benefit of future generations.

Family offices are most often used for asset management. However, they are also useful for conducting additional activities such as wealth and succession planning, lifestyle management, and philanthropy.

This article explores the process of setting up a family office in Singapore and outlines reasons you might set up a family office, including the latest tax incentives you may be eligible for.

Types of Family Offices in Singapore

 Family offices in Singapore are generally classified into two main types:

Type Structure Costs Control Privacy
Single Family Office (SFO) Manages wealth for one family Higher setup and operational costs Full control by the family Highly private with no external investors
Multi-Family Office (MFO) Serves multiple families Lower individual costs due to shared resources Shared control Less privacy due to multiple stakeholders

Which type suits your family?

  • SFOs are ideal for ultra-high-net-worth families who seek full control and privacy.
  • MFOs are suitable for HNW families looking for cost efficiency and professional management without establishing their own infrastructure.

Why set up a family office in Singapore?

As an established financial hub, Singapore holds immense appeal for local and overseas high-net-worth (HNW) individuals looking to establish a family office. In 2021, it ranked as the second most competitive location for international wealth management globally. Furthermore, in 2022, it had the world’s third fastest-growing population of HNW individuals.

Singapore’s allure can be attributed to its:

  • open, well-regulated economy;
  • strategic and convenient geographic location – a gateway to Asia with ready access to global and regional financial markets;
  • diverse ecosystem of wealth management talent (e.g., bankers, law firms, and advisors);
  • companies and service providers;
  • economic and political stability;
  • pro-business regulatory system;
  • extensive double tax treaties with more than 80 countries;
  • low corporate tax rate of 17% (and no capital gains tax);
  • abundant tax incentives and exemptions, and
  • quality medical and education systems.
Setting up family office in singapore

What are the family office tax exemptions in Singapore?

The Singapore Government is actively nurturing the growth of private banking locally due to the fast-growing pool of capital it generates, which can be utilised for urgent climate change mitigation efforts. In July 2023, it announced several enhancements to Singapore’s tax incentive schemes for SFOs.

Eligible family offices can now take advantage of these schemes and exemptions:

Global Investor Programme
This scheme grants permanent residency to individuals who possess at least 5 years of entrepreneurial, investment or management track record, and they establish a Singapore-based Single-Family Office with Assets-Under-Management (AUM) of at least SGD 200 million, where a minimum SGD 50 million must be deployed in the 4 stipulated investment categories. Read more about the qualifying criteria for the Global Investor Programme.
Singapore Resident Fund Scheme
Under Section 13O of the Income Tax Act, family offices with an annual local business spending of SGD 200,000 can claim a 100% tax exemption on Singapore-based funds, provided that certain conditions are met.
Enhanced-Tier Fund Tax Exemption
Section 13U of the Income Tax Act provides a tax exemption for income and gains on certain investments, including those in local and offshore funds, with a minimum investment of SGD 50 million.
Philanthropy Tax Incentive Scheme
From 1 January 2024, eligible donors can claim a 100% tax deduction (capped at 40% of the donor’s Singapore statutory income) for overseas donations made through qualifying local intermediaries.

Each entails a set of conditions that family offices must meet to qualify.

Understanding Section 13O and Section 13U

Both schemes offer tax exemptions for qualifying funds managed by single-family offices (SFOs) in Singapore, but they have different eligibility criteria: 

Tax Incentive Section 13O Section 13U
Minimum AUM S$10M at inception, growing to S$20M within two years S$50M at inception
Fund Structure Singapore-incorporated company Any legal entity (e.g., trust, LLP)
Local Business Spend S$200K annually S$200K annually
Investment Professionals At least 2 in Singapore At least 3 in Singapore, with one being a non-family member.

Both schemes also require annual reporting to the Monetary Authority of Singapore (MAS) and adherence to economic substance requirements.

    GST Exemptions for Family Offices

    Family offices managing funds structured under 13O and 13U may also benefit from Goods and Services Tax (GST) exemptions on financial services like fund management and fund advisory. This lowers costs when engaging local asset managers or financial service providers.

      Compliance Considerations

      To maintain tax-exempt status under Sections 130 and 13U, family offices must ensure:

      • Proper governance structures, including independent directors if necessary.
      • Ongoing compliance to economic substance, including local staffing requirements and minimum AUM.
      • Submission of annual Declarations of Continued Eligibility to MAS.

        Example of How a High-Net-Worth Family Can Secure 0% Tax in Singapore

        Background: A high-net-worth family looking to consolidate global investments sought to establish a family office in Singapore for tax efficiency and asset protection.

        Challenges:

        • Selecting an optimal fund structure to maximise tax benefits.
        • Meeting MAS compliance and staffing requirements.
        • Ensuring investments qualify for Singapore’s tax incentive schemes.

        Solution: The family established a Section 13U fund, hiring qualified investment professionals, and incorporating ESG-focused investments to align with Singapore’s tax-exempt designated inventments.

        Outcome: The family successfully secured 0% tax on investment income, enhanced wealth preservation, and leveraged Singapore’s stable regulatory environment for long-term financial security.

          How do I set up a family office in Singapore?

           The company incorporation process for family offices in Singapore can be complex, but the outcome can provide considerable benefits for HNW families.

          “First of all, you need to consider your objective for setting up this family office – whether it is for investment or philanthropy purposes,” says Kevin Cho, Director of Corporate Secretarial for BoardRoom Singapore. “You need to consider what funds will be set aside for philanthropy or charitable purposes.”

          Defining the goal you want to achieve will help guide the structure and operations of your family office and indicate the legal and tax implications you will need to navigate. Potentially, you may realise that a different investment vehicle (e.g., a company limited by guarantee, trust, or VCC) or even a different location will be more suitable.

            5 Steps to Establish a Family Office in Singapore

            1. Define Your Objectives – Determine whether your focus is investment, philanthropy, succession planning, or wealth preservation.
            2. Choose Between SFO or MFO – Select based on your family’s needs, level of control, and costs.
            3. Establish the Legal Structure – Register your entity (e.g., company, trust, or VCC) and ensure compliance with regulatory requirements.
            4. Apply for Tax Incentives – Secure eligibility for tax schemes like 13O and 13U to optimise financial benefits.
            5. Build Your Team & Infrastructure – Hire key personnel (e.g., investment managers, tax advisors) and set up operational processes.

            Family office formation is a significant undertaking. To ensure a smooth process, it is important to partner with an experienced corporate services provider to assist you in navigating Singapore’s complex legal, tax, and regulatory requirements. Working with such a partner will give you access to a team of business specialists, plus a network of trusted advisors and consultants who can guide you through the beginning stages of your family office and beyond.

              Benefits of setting up a family office

              The benefits of setting up a family office in Singapore

              According to Eunice Hooi, Head of Corporate Secretarial for BoardRoom Singapore, the top uses of a family office include asset protection and succession planning.

              “One possible arrangement is to put the assets under a trust structure instead of a standard company structure,” she says. “Having a trust arrangement protects the assets under law, assuming the parents are acquiring the assets for the benefit of the minor child under the trust arrangement.” 

              The trust agreement can set the terms on when and how the child will legally own the assets – this might be when they turn 21 or get married.

              “So the family office structure allows you to plan ahead of time,” Eunice explains. 

              The family office Singapore structure allows for strategic long-term planning, ensuring that wealth is transferred in a controlled manner. Additional uses for a family office can include:

              • consolidated wealth management;
              • customised financial solutions and investment strategies;
              • diversification of assets and risk mitigation; and
              • the preservation of family values and legacies.

              As a centralised hub, the family office provides an efficient, streamlined solution for managing family affairs.

              What are the regulatory requirements for setting up a family office in Singapore?

              Understanding and complying with local regulatory requirements is paramount when establishing any new company in Singapore.

              If you are considering starting an SFO, it will likely be exempt from regulations and won’t need to apply for a fund management licence.

              “As SFOs only manage assets belonging to one family, SFOs in Singapore are not subject to licensing or regulation under the Securities and Futures Act (SFA),” Eunice says. “However, MFOs are. This is to safeguard the interests of the different families that the MFO is serving.”

              Before commencing operation, MFOs need to obtain a Capital Market Services (CMS) licence from the MAS. They then need to conduct their activities in line with regulations. A skilled corporate services provider with extensive knowledge of the local rules can help ensure your company remains compliant from the start.

              While SFOs may not be subject to MAS regulation, they still need to meet certain requirements to qualify for the available tax exemptions under the Income Tax Act 1947.

              When is MAS licensing required?

              A family office may need a Capital Markets Services (CMS) license if it:

              • Manages funds for multiple unrelated families (MFOs), unless exempt.
              • Manages or distributes third-party funds for external clients.
              • Includes external investors in its wealth management activities.

              For full regulatory details, refer to the MAS guidelines.

              Expert guidance for your new venture

              5 Mistakes to Avoid When Setting Up a Family Office

              1. Underestimating Compliance Costs – Failure to meet MAS regulations can result in penalties.
              2. Lack of Succession Planning – Unclear wealth transfer strategies can lead to legal disputes.
              3. Poor Investment Diversification – Over-exposure to one asset class increases financial risk.
              4. OverlookingTax Optimisation – Not leveraging 13O/13U schemes can lead to higher tax burdens.
              5. Choosing the Wrong Legal Structure – Misalignment with goals can create unnecessary complexities.

              Expert guidance for your new venture

              Establishing a family office in Singapore can be an effective way to secure your family’s financial future. At BoardRoom, our experts guide you through every step—ensuring compliance with local regulations while maximizing Singapore’s opportunities. Beyond incorporation and corporate secretarial services, we offer end-to-end support for your business’s entire lifecycle.

              “BoardRoom provides a one-stop shop for family office Singapore clients, offering corporate services like accounting and tax advisory,” says Eunice, Managing Director Asia, Tax & Accounting. “We collaborate with key stakeholders, such as lawyers and fund managers, to deliver holistic solutions.”

              “When clients approach us, we first understand their goals, needs, and investor profile,” Eunice adds. “This ensures their investment location and vehicle align with their objectives.”

              For help establishing your family office in Singapore, contact BoardRoom today.

              Frequently Asked Questions (FAQs)

              1. Can foreigners set up a family office in Singapore?

              Yes, Singapore allows foreign high-net-worth individuals to establish family offices, often under the Global Investor Programme.

              2. Do all family offices qualify for tax incentives?

              No, eligibility depends on meeting MAS guidelines and financial thresholds under 13O/13U.

              3. How long does the setup process take?

              On average, it takes 3–6 months, depending on regulatory approvals, AML/KYC checks and tax incentive applications.

              Contact BoardRoom for more information:

              Eunice

              Eunice Hooi

              Managing Director Asia, Tax

              E: [email protected]

              T: +65 6536 5355

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