Single Family Office in Singapore – 3 Common Misconceptions

Updated as of 8 August 2023

Single Family Office in Singapore – Singapore has reported that the number of single family offices (SFO) in Singapore has risen from 400 in end 2020 to about 1,100 single family offices that have obtained S13O and S13U fund incentives.  In the course of encountering such cases, we note that there are many misconceptions about setting up SFOs and hopefully this article will help to shed some light on this topic.

Single Family Office in Singapore – #1- Applying for a Tax Incentives for the fund vehicle under a SFO under S13O and S13U allow for the family to apply for permanent residency

Many agents and intermediaries in Singapore sell the SFO setup as a way for families to immigrate to Singapore.  This may not be true.  The purpose of setting up a SFO in Singapore is to manage your money from Singapore.  Thus, merely setting up a SFO does not guarantee the family setting up immigration status in Singapore. 

If you wish to apply for permanent residency in Singapore, a family should setup a SFO and also apply for PR under the Global Investor Programme – Family Office Scheme.  We note that as of the current date the minimum assets under management under this GIP – Family Office Scheme is net investible assets of at least S$200 million.

Single Family Office in Singapore – #2- The SFO can invest into all types of investments

The purpose of the SFO structure (which includes an exempt fund manager and a fund entity, both being Singapore companies) is to manage bankable assets and not so much non bankable assets.  Thus, if you wish to set up a family office to own your operating family business, you would need a more bespoke structure (rather than the routine single family office structure).  Do seek legal advice if you wish to know more about setting up a family office structure that can hold both bankable and operating assets.   

Single Family Office in Singapore –  #3- Applying for S13O or S13U with the Monetary Authority of Singapore gives me a licence

We heard a person saying that they were applying for a licence from MAS under S13O or S13U of the Income Tax Act 1947 of Singapore (ITA).  This is not correct.  S13O or S13U is a tax incentive scheme under the ITA.  Obtaining such tax incentive does not imply that the exempt fund Singapore company has obtained any licence from the Monetary Authority of Singapore.

Setting up a single family office in Singapore trigger many direct and indirect legal issues affecting the family members who are shareholders of the single family office.  Do seek proper legal advice when setting up such a SFO structure in Singapore as such structures can help with multi-generation wealth transfer, succession planning and business succession planning.  When in doubt, always check with a lawyer who has expertise in private client legal services.

 

If you need Private Client Legal Services to set up a Single Family Office in Singapore, do click here to schedule a complimentary meeting with our Private Client Legal partner who can look into your specific requirements.       https://www.SingaporeLegalPractice.com is a corporate law and commercial law educational website headquartered in Singapore which aims to demystify business law and 新加坡商业法 for SME Company Owners, Startup Founders and 新加坡新移民老板。The information provided on this website does not constitute legal advice.  Please obtain specific legal advice from a lawyer before taking any legal action.  Although we try our best to ensure the accuracy of the information on this website, you rely on it at your own risk.  Click here to signup for our newsletter today to be kept updated on the latest legal developments in Singapore.