Single Family Office Succession – Single family offices (SFOs) in Singapore have significantly increased since the Economic Development Board (EDB) and the Monetary Authority of Singapore (MAS) established a joint team to review tax incentives in March 2019. By the end of 2023, around 1,400 single family offices had received these incentives. As the family office sector matures, it’s crucial for families to consider effective succession planning to ensure the longevity of their legacy and wealth.

Typical Structure of Single Family Offices

A typical SFO in Singapore consists of two private limited companies: one acts as an exempt fund manager (EFM), while the other is the fund itself. The fund entity typically applies for the S13O/S13U tax incentives.

Major Issues Facing Single Family Offices

1. Single Family Office Succession – Lack of Succession Planning and Corporate Governance

Many family principals tend to overlook comprehensive succession planning. They often believe that transferring assets to their children through a holding company and a will is sufficient. Unfortunately, this lack of structured planning frequently leads to the fragmentation of the family business within two to three generations. Without proper governance, family wealth can dissipate, regardless of the children’s capabilities. A robust family office structure is essential for independent investment management and decision-making.

2. Single Family Office Succession –Real Estate Portfolio Management

Most SFOs apply for the S13O and S13U tax incentives, which stipulate that revenue cannot come from real estate rentals, limiting their ability to hold property. Consequently, many SFOs shy away from owning real estate in Singapore to avoid increased audit and tax costs. This issue can be addressed by establishing a separate real estate holding company under the trust to manage their property portfolio effectively.

3. Single Family Office Succession – Operating Business Integration

The typical SFO structure often fails to accommodate the family’s operating business. S13O and S13U are intended for wealth management rather than serving as tax-free holding structures for operating companies. In many Asian family businesses, succession issues arise when family members occupy key executive roles, leading to conflicts and potential insolvency. A clear example is the Yeo Hiap Seng family saga, where inadequate succession planning resulted in family disputes and the eventual sale of the company.

Conclusion

Establishing a well-structured family office with an eye on Single Family Office Succesion is critical for safeguarding family wealth and ensuring its growth across generations. By implementing effective succession planning, families can prevent potential conflicts and ensure that their legacy is preserved for future generations. A properly designed family office can manage and grow wealth effectively, much like the longstanding Rothschild family.

Final Thoughts

For family office principals in Singapore, addressing these challenges head-on is essential to secure the family’s future and maintain control over their assets. Prioritizing succession planning will ultimately lead to more sustainable and prosperous family businesses.

单一家庭办公室继承：长期成功的有效规划

新加坡的单一家庭办公室（SFO）自2019年3月经济发展局（EDB）和新加坡金融管理局（MAS）成立联合团队审查税收优惠以来，数量显著增加。到2023年底，约有1,400个单一家庭办公室获得了这些优惠。随着家庭办公室行业的成熟，家庭必须考虑有效的继承规划，以确保其遗产和财富的持久性。

单一家庭办公室的典型结构

在新加坡，典型的单一家庭办公室由两家私人有限公司组成：一家作为免税基金管理人（EFM），另一家则是基金本身。基金实体通常申请S13O/S13U税收优惠。

单一家庭办公室面临的主要问题

1. 缺乏继承规划和公司治理

许多家庭负责人往往忽视全面的继承规划。他们常常认为通过控股公司和遗嘱将资产转让给子女就足够了。不幸的是，这种缺乏结构化的规划常常导致家庭企业在两到三代内分崩离析。没有适当的治理，无论子女的能力如何，家庭财富都可能会消散。强有力的家庭办公室结构对于独立的投资管理和决策至关重要。

2. 房地产投资组合管理

大多数单一家庭办公室申请S13O和S13U税收优惠，这要求收入不得来自房地产租金，这限制了他们持有物业的能力。因此，许多单一家庭办公室在新加坡不愿拥有房地产，以避免增加审计和税务成本。可以通过在信托下设立独立的房地产控股公司来有效管理其物业投资组合，从而解决这个问题。

3. 经营业务整合

典型的单一家庭办公室结构通常无法适应家庭的经营业务。S13O和S13U旨在用于财富管理，而不是作为运营公司的免税控股结构。在许多亚洲家族企业中，当家庭成员担任关键执行角色时，继承问题往往会出现，导致冲突和潜在的破产。一个明显的例子是Yeo Hiap Seng家族的故事，缺乏适当的继承规划导致家庭争端，最终公司被出售。

结论

建立一个结构良好的家庭办公室对于保护家庭财富并确保其跨代增长至关重要。通过实施有效的继承规划，家庭可以防止潜在冲突，确保其遗产得以保存。一个设计合理的家庭办公室可以有效管理和增长财富，类似于历史悠久的罗斯柴尔德家族。

最后思考

对于新加坡的家庭办公室负责人，正面应对这些挑战对于保障家庭未来和维护资产控制至关重要。优先考虑继承规划最终将导致更可持续和繁荣的家族企业。

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We work with a Partner of a large well known Singapore law firm who in 2023 won the top prize for the trust law exam from the global Society of Trust and Estate Practitioners (based in the United Kingdom) and is a qualified Trust and Estate Practitioner (TEP).  If you need to engage a Singapore lawyer to advise you on your private wealth matters, please click hereto schedule a complimentary meeting with our lawyers.

我们与一家知名新加坡大律师事务所的合伙人合作，该合伙人在2023年获得了全球信托与遗产从业者协会（总部位于英国）信托法考试的最高奖项，并且是一名合格的信托与遗产从业者（TEP）。如果您需要聘请新加坡律师为您的私人财富事务提供建议，请点击此处安排与我们律师的免费会议。

我们与新加坡一家知名的大型律师事务所合作。如果您需要聘请新加坡律师为您提供私人财富方面的建议，请点击此处安排与我们律师的免费会面。

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