WeDigest > Family Office > Singapore Family Office Update 2022: Tax Incentive

Singapore Family Office Update 2022: Tax Incentive

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.

Summary of Singapore’s advantages

  • Skilled and diverse talent pool
  • Well-established global financial hub
  • Heart of Asia with access to a population of 4.6 billion within a 7-hour flight radius
  • Strategic network of 27 free trade agreement
  • Independent sovereign with stable political party
  • Common law jurisdiction
  • Strict privacy rules & comprehensive intellectual property protection
  • Robust ecosystem of wealth management professionals
  • Competitive tax system with 93 double taxation agreement in force
  • High standard of living & low crime rate
  • World-class healthcare system
  • Cosmopolitan and multiracial society conducive for raising a family
  • Reputable education system with focus on multilingual proficiency

Updated tax incentives scheme

The government continues to implement tax incentives to promote the growth of the family office industry and fund flows into Singapore. The section 13O (previously known as 13R) and 13U (previously known as 13X) provide tax exemption on “specified income” derived from “designed investments”. The Monetary Authority of Singapore (MAS) has amended the requirements of section 13O and 13U effective 18th April 2022.

13O - Singapore Resident Fund Scheme 13U - Enhanced-Tier Fund Tax Exemption Scheme
Fund's legal form
Company incorporated in Singapore
Company, trust and limited partnership
Fund's residence
No restrictions
Fund manager
Singapore-based and holding CMS license, unless exempted
Singapore-based and holding CMS license, unless exempted
Asset under Management (AUM)
• Point of application: S$10M
• Commit to increasing AUM to S$20M within 2 years
Point of applicationL S$50M
Staffing requirement of Investment Professionals (IPs)
• Minimum of two IPs
• May be given 1-year grace period to employ the second IP
• At least three IPs with one being a non-family member
• May be given 1-year grace period for non-family member IP
AUM Tier
Minimum total business spending (per year)
Minimum local business spending (per year)
AUM < S$50M
S$50M ≤ AUM < S$100M
AUM ≥ S$100M
Local investments*
• Comprise at least 10% of the fund's AUM or S$10M, whichever is lower at any one point in time
• May be given 1-year grace period

* Local investment products include: i) equities listed on Singapore-licensed exchanges, ii) qualifying debt securities, iii) funds distributed by Singapore licensed/registered fund managers, iv) private equity investments into non-listed Singapore-incorporated companies (e.g., start-ups) with operating business(es) in Singapore.

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