| Singapore | ||
|---|---|---|
S$ 5.4 trillion |
Assets under Management 2021 |
|
660 |
Variable Capital Companies as of 14 October 2022 |
|
~700 |
Established Family Offices |
|
| Hong Kong | ||
|---|---|---|
US$ 4.55 trillion |
Assets under Management 2021 |
|
510 |
Limited Partnership Fund as of July 2022 |
|
~400 |
Established Family Offices |
|
| Singapore | Hong Kong | ||||
|---|---|---|---|---|---|
|
Judicial System |
Common Law |
Common Law |
|||
|
SFO License Requirements |
License exemption for SFO managing funds for its related corporations or on behalf of a single family only |
License exemption for SFO not providing asset management services to a third party |
|||
|
Personal Tax |
|
Resident Tax Rate |
2 – 17% |
||
|
YA 2023 |
2 – 22% |
||||
|
YA 2024 onwards |
2 – 24% |
||||
|
Corporate Tax |
17% |
First $2 million |
8.25% |
||
|
On remainder |
16.5% |
||||
|
Capital Gains Tax |
No |
No |
|||
|
Tax Incentive Scheme |
130 |
13U |
Family-owned Investment Holding Vehicle |
||
|
Legal Form |
Company incorporated in Singapore |
Company, trust and limited partnership |
Entity that is not a business undertaking for general commercial or industrial purposes |
||
|
Residence |
Singapore |
No restrictions |
No restrictions |
||
|
Managed By |
Singapore-based and holding CMS license, unless exempted |
Singapore-based and holding CMS license, unless exempted |
Eligible Single-Family Office |
||
|
Asset under Management (AUM) |
Minimum S$20 million in Designated Investments at point of application & throughout the incentive period
|
Minimum S$50 million in Designated Investments at point of application & throughout the incentive period
|
HK$240 million in qualifying assets |
||
|
Staffing Requirements |
Minimum 2 Investment Professionals, of whom at least one is not a family member of the beneficial owner(s) at point of application & throughout the incentive period |
Minimum 3 Investment Professionals, of whom at least one is not a family member of the beneficial owner(s) at point of application & throughout the incentive period |
Not less than two full-time employees in Hong Kong to carry out the investment activities and who have the necessary qualifications for doing so |
||
|
Business Expenditure |
Tiered business spending framework |
Not less than HKD $2 million operating expenditure incurred in Hong Kong for carrying out the investment activities |
|||
|
AUM < S$50m |
|||||
|
≥ S$200,000
|
|
||||
|
Minimum S$200,000 Local Business Spending |
|||||
|
S$50m ≤ AUM < S$100m |
|||||
|
≥ S$500,000 |
|||||
|
Minimum S$200,000 Local Business Spending + Eligible donations to local charities + Grants to Blended Finance Structures (recognised as 2x spending) |
|||||
|
AUM ≥ S$100m |
|||||
|
≥ S$1 million |
|||||
|
Minimum S$200,000 Local Business Spending + Eligible donations to local charities + Grants to Blended Finance Structures (recognised as 2x spending) |
|||||
|
Capital Deployment Requirement (CDR) |
Invest S$10 million or 10% of AUM (whichever is lower) in qualifying investments
1.5x or 2x amount invested in eligible investments recognised for Capital Deployment Requirement computation |
NA |
|||
| Singapore | Hong Kong | |
|---|---|---|
|
|
Variable Capital Companies |
Limited Partnership Fund |
|
Structure |
• Stand-alone VCC or umbrella VCC with multiple sub-funds • Open or close-ended |
Limited Partnership |
|
Directors/ Partners |
• At least one director who is ordinarily resident in Singapore • At least one director who is a Qualified Representative or a director of the VCC fund manager |
• One general partner • At least one limited partner |
|
Investment Scope/ Restrictions |
No restrictions |
No restrictions |
|
Re-Domiciliation |
Yes |
Yes |
|
Tax Schemes |
13O/U if conditions are met at umbrella level |
Unified Funds Exemption regime if conditions are met |
|
Double Taxation Agreements |
97 |
40 |
|
How suitable for a SFO? |
Either SFO is a licensed fund manager or appoint a licensed investment manager to manage the VCC |
Requires that not all partners in the fund are corporations in the same group of companies |
As a thriving global wealth management hub, Singapore boasts a multitude of competitive advantages that set it apart from its peers. In an era marked by heightened geopolitical tensions, Singapore’s enduring neutrality, political stability and unwavering commitment to economic resilience make it an ideal wealth management hub.
Its strong rule of law, transparent regulatory framework, and consistent policies provide a solid foundation for investors seeking a secure and predictable environment. Singapore’s unwavering reputation as a bastion of stability amidst global uncertainties gives investors the confidence to navigate the ever-evolving financial landscape. Additionally, its strategic location at the heart of Asia, coupled with its world-class infrastructure and connectivity, positions Singapore as the premier wealth management hub in the region, catering to the diverse needs of both regional and international clients. By harmonizing stability and success, Singapore offers a robust wealth management ecosystem that continues to attract investors and families seeking long-term growth and prosperity.
Distinguished as the gateway to Mainland China, Hong Kong stands at the forefront of global wealth management by leveraging its unique position within the Greater Bay Area and the groundbreaking Wealth Management Connect schemes. Renowned for its dynamic and cosmopolitan environment, Hong Kong serves as the bridge connecting international investors to the vast wealth opportunities found in China, one of the world’s largest and fastest-growing economies.
With its robust financial infrastructure, deep market liquidity, and extensive expertise in wealth management, Hong Kong offers an unrivalled platform for individuals and institutions seeking to tap into the thriving Chinese market. Its strategic location, coupled with its vibrant business ecosystem and international connectivity, makes Hong Kong an ideal springboard for global investors to unlock exceptional growth potential. By embracing the power of the East and harnessing the opportunities that lie within, Hong Kong empowers investors and families to expand their horizons and achieve unparalleled success.
In conclusion, Singapore and Hong Kong bring their own set of compelling advantages as wealth management hubs. Rather than viewing them as purely competitive, it is essential to recognise the complementary nature of these two cities – each caters to different client preferences and objectives. Singapore offers a stable and secure environment with its neutrality, political stability and economic resilience, appealing to those seeking a predictable landscape. Meanwhile, Hong Kong serves as an enticing gateway to Mainland China, leveraging its strategic position and providing access to one of the world’s most dynamic economies.
Recognising this synergy, SingAlliance, with our multi-jurisdictional presence in Singapore and Hong Kong, offers our clients the unique advantage of flexibility. Our clients have the freedom to choose where to book their assets based on their specific needs, harnessing the best of both cities and ensuring a comprehensive wealth management approach that maximises opportunities and achieves their wealth goals. By embracing the complementary strengths of Singapore and Hong Kong, clients can unlock a world of possibilities and thrive in the ever-evolving global financial landscape.
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Effective from 5 July 2023, MAS has introduced revised conditions for Single-Family Offices (SFOs) interested in applying for the 13O/13U tax incentive schemes. The goal of these updated measures is to motivate SFOs to deploy their capital in a more purposeful manner, thereby fostering a purpose-driven approach that enhances the wealth management industry.
The Variable Capital Companies (VCCs) framework is an innovative and flexible investment fund structure that has gained prominence in the global financial landscape. Introduced in 2020 to facilitate the establishment and operation of investment funds.
Hong Kong is poised to become a prime hub for family offices with its well-established financial infrastructure, competitive tax system and robust government support for the industry. Its unique location grants the city unparalleled access to Mainland China and seize opportunities arising from the Greater Bay Area. Find out what Hong Kong has to offer in our latest publication.
The family office landscape in Singapore has continued to flourish and expand with promising potential since our last publication “Singapore as an ideal location for a family office” in 2020. With updated guidelines and criteria for the tax incentive scheme, it is therefore timely for us to revisit this topic to navigate the considerations of setting up a family office in Singapore.
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