Maiden Capital | Singapore

Being one of the easiest countries in the world to do business, establishing a family office in Singapore is simple and quick.

Singapore is considered as one of the most important financial hubs in South-East Asia, and it has become a favourite location for wealthy families to handle their worldwide assets and interests. Singapore has a reputation as a well-governed and well-regulated financial centre that provides political stability and a business-friendly climate, in addition to the presence of local and international private banks, investment banks, and other financial service providers and specialists.

With Singapore as the Global-Asia Pacific gateway for asset managers and investors, Singapore-based managers' assets under management (AUM) expanded in accordance with global trends. In 2019, it increased by more than 15% to reach S$4 trillion (US$2.9 trillion). In the same year, 76% of AUM was generated outside of Singapore, while 69% of AUM was invested in the Asia-Pacific area.

Singapore's tax structure is very competitive. Singapore-sourced revenue or money repatriated into Singapore is subject to the 17% corporation tax rate. Singapore does not tax capital gains, and a variety of exclusions further restrict the tax base. Foreign dividends that have been subject to some foreign tax and are paid from a jurisdiction with a headline rate of at least 15% are exempt for corporate resident taxpayers. The dividends paid by a Singapore-based corporation are free from further taxes.

Moreover, Singapore has an extensive network of double taxation agreements that may decrease taxes at source on certain kinds of income and profits.

For family offices interested in venture capital, Singapore's startup environment is thriving. Around 3,000 start-ups are connected to a worldwide network of over 300 private equity and venture capital firms, and over 190 incubators and accelerators are headquartered in this city. This creates intriguing investment prospects for family offices in Singapore's emerging businesses, such as the fintech industry, which drew a record S$1.2 billion in 2019.

The Singaporean government has implemented a variety of tax benefit programmes for both offshore and onshore entities controlled by family offices. They need a Singapore manager who is licenced or exempt from local securities legislation in order to provide fund management services. Often, an SFO is established as a "associated company" of the family fund vehicle in order to avoid regulation. A single-family office that can establish that it solely handles the assets of the same family may also be free from licensure.

Why Singapore

Thriving Economy

The startup community in Singapore is thriving. It is home to more than 190 incubators and accelerators, and over 3,000 homegrown startups are connected to a worldwide network of more than 300 private equity and venture capital firms. Singapore's family offices can take advantage of enticing investment possibilities in growing sectors like fintech, which drew a record S$1.2 billion in 2019.

Expanding FO Community

There is a rich and varied group of family offices in Singapore. Family offices from all around the globe can meet, explore new opportunities, and perhaps do business with one another in Singapore

Support Services

When it comes to safeguarding and expanding a family's wealth and assets, an array of specialised tax advisors, law firms and family office specialists like Maiden Capital are within easy reach. These professional firms have the knowledge to guide you in making important choices that will assist maintain and grow your legacy.

Financial Hub

As a result of Singapore's 25 free trade agreements (FTAs) and more than 80 double tax agreements (DTAs), family offices based in the city enjoy a plethora of advantages. For instance, you may use DTAs to effectively handle withholding taxes on investments made in foreign countries.

Global Professionals

Through effective collaboration between public and private sectors, Singapore is constantly attracting skilled global professional talent in finance, law, tax and other professions to relocate to the city to participate in the growth of this industry.

World Class City

Singapore is renowned globally for its world-class healthcare system, state-of-the-art public infrastructure, and top-tier educational opportunities - all factors that contribute to an outstanding quality of life.

Permanent Residence

The Global Investor Programme (GIP) allows eligible family principals to apply for Singapore Permanent Residence status in order to lead the establishment and management of their family offices in Singapore.

What Are The Tax Benefits Of Setting Up A Family Office In Singapore?

Singapore Resident Fund Scheme (Section 13R of the Income Tax Act)

This scheme is tax-exempted from specified income obtained from designated investments in funds managed in Singapore by a licensed or exempt resident fund manager.

It will not apply if all issued securities of qualified Singapore firms are beneficially held by Singapore citizens.

Also, the family office must expend at least S$200,000 annually in worldwide business costs, and the administrator of the fund must be headquartered in Singapore.

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Enhanced-Tier Fund Tax Exemption Program (Section 13X of the Income Tax Act)

This is applicable to funds having a minimum size of S$50 million managed or advised by a Singapore fund manager, which may be an exempted SFO or a licensed multi-family office.

The family office must employ at least three investment professionals in Singapore who are substantively engaged in investment management or advisory functions, and the fund must incur at least S$200,000 in business expenditures in Singapore, which typically includes investment management fees payable to the family office.

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How Do I Set Up A Family Office In Singapore?

Applicants who are successful under the 13R and 13X schemes will be issued employment permits (one for 13R and three for 13X), which may provide a temporary solution awaiting applications for permanent residence.

13R and 13X funds that are authorised for the tax incentive scheme before to 31 December 2024 may enjoy the advantages of the scheme for the duration of the fund's existence, provided that the companies continue to meet the operating requirements.

Family offices established under the 13R and 13X schemes are also permitted to use the new Variable Capital Company (VCC) structure, which came into effect on 14 January 2020. A VCC may be established as either a stand-alone fund or an umbrella fund with two or more sub-funds. A VCC structure is treated as a single business for tax purposes, eliminating the need to file several tax returns.

Shares of a VCC are redeemable at the fund's net asset value (NAV), and VCCs may pay capital-based dividends, which is not permitted for most other corporate vehicles. In addition, the VCC shareholder registration would not be made public, affording investors privacy.

In addition to the 13R and 13X schemes, the Economic Development Board (EDB) of Singapore has launched the Global Investor Programme (GIP) for families relocating to Singapore. The GIP grants Singapore Permanent Resident (PR) status to qualified international investors and provides a family office-specific alternative.

Qualified investors must invest at least S$2.5 million (paid up capital) and maintain the investment for at least five years in a Singapore-based SFO with AUM exceeding S$200 million.

To qualify for this option, investors must have at least five years of entrepreneurial, investing, or managerial experience and a net worth of more than S$400 million as an individual or immediate family. In addition, investors must submit a five-year business plan explaining planned employment and yearly financial expenditures, as well as the activities of the family office, prospective investment sectors, asset kinds, and geographic concentration.

Family offices in Singapore may apply for a tax advantage under the Financial Sector Incentive – Fund Management Scheme (FSI-FM), which encourages fund management and the provision of investment advice services in Singapore. Under this system, a Singapore fund manager's fee income from managing or advising an eligible fund is taxed at a concessionary rate of 10% as opposed to the standard corporation tax rate of 17%.

A fund manager must possess a Capital Markets Services (CMS) licence (unless exempted by the MAS), employ at least three experienced investment professionals earning at least S$3,500 per month, and have a minimum AUM of S$250 million to qualify for the FSI-FM programme. This is particularly pertinent for big family offices, because the scope of activities and revenue from managing or advising qualified assets may be significant.

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Market Insights

Singapore

Why Singapore

What Are The Tax Benefits Of Setting Up A Family Office In Singapore?

Singapore Resident Fund Scheme (Section 13R of the Income Tax Act)

Enhanced-Tier Fund Tax Exemption Program (Section 13X of the Income Tax Act)

How Do I Set Up A Family Office In Singapore?

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