We introduced Singapore family offices in our article last year and launched a series of guides. Statistically, the number of newly established family offices in Singapore doubled to 400 in 2021. In this context, the Monetary Authority of Singapore (MAS) has recently launched a new policy and raised the application threshold. The new policy will take effect on April 18. The main changes are summarized as follows:
变动(一):13O VS 13R
Application threshold
New policy
The application threshold is adjusted to SGD 10 million.
Original policy
The original policy set a threshold as SGD $5 million.
Decipherment：The Inland Revenue Authority of Singapore (IRAS) renamed the tax exemption policy of family offices in the Singapore Income Tax Act in January 2022, and at the same time made an early warning of the increase in the capital threshold of Singapore family offices. This time, the application amount was doubled directly for raising the threshold.
02 Minimum assets under management
New policy
There is requirement of new policy that the scale of asset management be increased to SGD 20 million within two years.
Original policy
There is no requirement of original policy that the scale of asset management be increased.
Decipherment: In fact, when the EP was renewed for the first time, MAS required the scale of the family office to reach SGD 20 million after 2years. Actually, MAS gives customers a two-year buffer time.
03 Hiring investment professionals
New policy
There is requirement of new policy that at least two local tax residents to be employed, and the minimum expenditure has been increased. It is SGD 200,000 when the asset management scale is less than SGD 50 million, SGD 500,000 when the asset management scale is between SGD 50 million and SGD 100 million, and SGD 1 million when the asset management scale is more than SGD 100 million.
Original policy
There is requirement of original policy that at least one local tax residents to be employed.
Decipherment：The two investment managers required by the policy can be family members or non-family members. If the employed investment managers are not Singapore citizens / permanent residents / work permit holders, they can apply for Singapore work permit (EP) simultaneously they can work from home. However, it is required to increase the fixed expenditure every year with the expansion of the scale.
04 Investment scope
New policy
There is restriction on the investment scope of the erection institution of new policy, is that requiring 10% of the total assets or SGD 10 million (whichever is the lowest) to be invested in the local market of Singapore.
Original policy
There is no restriction on the investment scope of the erection institution of original policy.
Decipherment：There is further restriction on the investment scope of companies’ funds, also requires at least some investment in Singapore local products. This revision is to ensure that funds can promote local development, which is understandable and predictable
变动(二):13UVS13X
01 Application threshold
New policy
The application threshold unchanged and remained at SGD 50 million
Original policy
The application threshold is SGD 50 million
02 Minimum assets under management
New policy
There is requirement of new policy about annual expenditure. An annual expenditure should be SGD 500,000, and a scale expenditure of SGD 1 million with an asset size of more than SGD 100 million.
Original policy
There is requirement of original policy about annual expenditure, should be SGD 200,000.
03 Hiring investment professionals
New policy
There is requirement of new policy that at least three local tax residents to be employed, and one of the investment managers must be a non-family member.
Original policy
There is requirement of original policy that at least two local tax residents to be employed.
04 Investment scope
New policy
There is restriction on the investment scope of the erection institution of new policy, is that requiring 10% of the total assets or SGD 10 million (whichever is the lowest) to be invested in the local market of Singapore.
Original policy
There is no restriction on the investment scope of the erection institution of original policy.
MAS (Original text)
Special note：
As such, the following applications/applicants are not subject to the new conditions:
- Applications which have submitted preliminary information before 18 April 2022 and with correspondences with the MAS in the last six months; or
- Applications that the MAS had received formal MASNET application before 18 April 2022, but approved after 18 April 2022; or
- Applications which were formally approved, with the issuance of a formal Letter of Offer from the MAS, before 18 April 2022.
Singapore family office tax exemption scheme
To encourage family office industry development, the Singapore government has granted corresponding exemptions and relevant tax scheme (13o and 13u) for family offices. The high-net-worth group is not only contributes to property management and wealth appreciation, but also helps families obtain overseas identity.
- The financial information exchanging can be circumvented；
- There is tax exemption of Singapore funding, also investment income is not subject to 17% corporate income tax；
- Singapore offers a unique and conducive environment to set up a family office for high-net-worth group；
- Facilitates intergenerational continuity of fortune, wealth preservation and appreciation；
- Working pass (EP) is approved before investment, and renewal is guaranteed.
Specific requirements for Singapore family office：
- Subject to the approval of the monetary authority of Singapore.
- To incur at least SGD 200,000 in total local business spending in each financial year, which can be the salary of EP applicant and affiliated EP of family members.
- Fund management company must be ① based in Singapore and ② hold the capital market service (CMS) license or exempt from the CMS license or have been approved.
- After obtaining the approval from the monetary authority of Singapore, the investment strategy / objective of the fund remains unchanged (the change of investment strategy must be approved by MAS and must have real business reasons).
About us:
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