Typical Single Family Office Structure – Key Elements

Typical Single Family Office Structure: Singapore has risen in the private wealth management rankings to become one of the world’s largest wealth management centres. Many families are flocking to Singapore to set up single family offices to manage their family wealth.  Singapore is a global centre for private wealth management and has many law firms and global banks setting up shop here to help clients manage their wealth. Singapore has many global top rankings including one for ease of doing business globally. This begs the question of what is the usual structure for a Single Family Office in Singapore?

The typical single family office structure involves two Singapore companies. 

 

Typical Single Family Office Structure: The exempt fund manager entity

The first company is a family office entity which manages only the family wealth and can either rely on an exemption to the Securities and Futures Act class exemption or the legal adviser can write into the Monetary Authority of Singapore (MAS) to apply for a case by case exemption.

This entity pays tax in Singapore.

Some recent compliance requirements of the family office:

• MAS has also rolled out reporting requirements to deal with money laundering issues in relation to Single Family Offices in Singapore.  There are now annual filing and reporting requirements to MAS.
• Requirement for additional non family member employees to be hired by the family office.

 

Typical Single Family Office Structure: The fund entity

This entity usually needs to apply for a tax incentive under S13O or S13U of the Income Tax Act 1947 of Singapore.  There are many changes to the tax conditions that you need to comply with if you would like to be eligible for these tax incentive schemes. 

• The most important of them being that the minimum assets under management for S13O is SGD 20 million at the point of application and for the duration of the tax incentive.  S13U has a higher requirement of SGD 50 million at the point of application and throughout the incentive period.

• There is now a list of investments that you need to invest into and a 10% investment requirement.

• There has been a push towards encouraging the fund to invest into green renewable investments.
• There is also a minimum spend requirement for this entity.

Typical Single Family Office Structure: In conclusion, there have been many changes to the regulations and administrative conditions imposed on the single family office and the fund entity.  Do remember to check in with your corporate lawyers in Singapore to be updated on the latest legal requirements.  Managing your wealth from Singapore is a good investment that should help you with wealth management for your family.  Singapore has a stable government and robust financial and legal system which helps investors protect their wealth.

Do not hesitate and start planning and taking action to set up your single family office in Singapore today.

 

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