With over 1,100 family offices managing around S$90 billion in assets, Singapore has emerged as a prominent hub for wealth management.
Recognizing the significant contributions made by family offices to the economy, the Monetary Authority of Singapore (MAS) is taking steps to attract and retain them through a range of tax incentives. These incentives not only aim to drive local growth but also encourage purposeful investments that align with Singapore's objectives.
MAS is intensifying incentives and requirements to promote environmental and social causes, as well as job creation within family offices.
Under the revised tax rules, Single Family Offices (SFOs) will now be required to hire at least one professional, who is a non-family member, to qualify for tax incentives. This measure ensures the integration of local talent within the family office sector, fostering employment opportunities for Singaporeans.
Furthermore, the revised tax rules recognize all investments in non-listed Singapore operating companies, including private credit. By providing recognition and incentives for investing in local businesses, MAS aims to stimulate economic growth and job creation within Singapore.
In addition to local investments, the tax incentives focus on global issues such as climate change.
MAS has broadened the scope of eligible investments for SFOs to include climate-related projects worldwide. This expansion allows SFOs to invest in such projects beyond Singapore's borders, while still fulfilling their investment requirements.
By encouraging SFOs to participate in climate-related projects globally, MAS aims to contribute to the global efforts to address climate change.
MAS also emphasizes the importance of philanthropy, urging SFOs to engage in philanthropic activities both locally and overseas. By doing so, family offices can make a positive impact on communities and address societal needs.
To mitigate money laundering risks, MAS is implementing measures that require all Single Family Offices to notify the authority when commencing operations and maintain a business relationship with a regulated financial institution. These measures strengthen surveillance and defense against money laundering, ensuring the integrity of the family office sector in Singapore.
Singapore's enhanced tax incentives for family offices demonstrate its commitment to fostering local hiring and purposeful investments.
By offering favourable tax regulations, Singapore solidifies its position as a global hub for wealth management, attracting and retaining family offices from around the world.