Bestar Reply Setting Up a Single Family Office (SFO) in Singapore Inquiry
- a22162
- Nov 30
- 6 min read
Updated: Dec 4
Bestar Reply Setting Up a Single Family Office (SFO) in Singapore Inquiry
Dear Client,
🇸🇬 Setting Up Your Single Family Office (SFO) in Singapore: Your Path to Global Wealth Management with Bestar
Thank you for reaching out to Bestar Singapore regarding the establishment of your Single Family Office (SFO) in Singapore. We are delighted to guide you through the seamless process of leveraging Singapore's robust regulatory environment and attractive tax incentives.
Singapore remains a premier hub for private wealth management, and a well-structured SFO is the key to managing your family's assets efficiently and strategically.
Here is an overview of the key components of your SFO setup:
1. Dual Entity Incorporation: SFO Management and Fund Vehicle
A standard and efficient SFO structure in Singapore involves setting up two entities:
The SFO Entity (The Manager): This is typically a Singapore-incorporated Private Limited Company. Its primary role is to manage the assets of your family. As it manages only the wealth of a single family, it is generally exempt from the fund management licensing requirements under the Monetary Authority of Singapore (MAS).
The Fund Entity (The Investment Vehicle): This entity holds the actual investments. It can be a Private Limited Company, a Limited Partnership (LP), or a Variable Capital Company (VCC), with the choice depending on your specific succession, investment, and tax planning needs.
Bestar's service includes the end-to-end incorporation of both these entities, ensuring they are correctly structured from a legal, regulatory, and tax perspective right from the start.
2. Securing Key Talent: The Employment Pass (EP) Application
Establishing economic substance is a core requirement for SFO tax incentives. This means having genuine, Singapore-based staff to manage the funds. For your key personnel who are foreign nationals, we will manage the entire Employment Pass (EP) application process.
SFO Requirement: The SFO is required to employ a minimum number of qualified Investment Professionals (IPs) who are Singapore tax residents. For both the 13O and 13U schemes, at least one IP must be a non-family member.
EP Application: The EP is the primary work pass for foreign professionals, managers, and executives. Our team will prepare and submit the necessary documents, including detailed job descriptions and salary benchmarking, to the Ministry of Manpower (MOM) to ensure a high chance of approval for your Investment Professionals.
3. Unlocking Tax Efficiency: Applying for Section 13O and 13U Tax Incentives
The primary draw for SFOs in Singapore is the tax exemption on "Specified Income" derived from "Designated Investments" under the fund tax incentive schemes administered by the MAS.
Feature | Section 13O (Onshore Fund Tax Incentive) | Section 13U (Enhanced-Tier Fund Tax Incentive) |
Minimum AUM | S$20 Million | S$50 Million |
Minimum IPs | 2 Investment Professionals | 3 Investment Professionals |
Local Business Spending | Tiered (Minimum S$200,000) | Tiered (Minimum S$200,000) |
IP Requirement | At least 1 must be a non-family member. | At least 1 must be a non-family member. |
How Bestar can assist you with your 13O/13U application:
Strategic Advisory: We will advise on the optimal scheme (13O or 13U) based on your Assets Under Management (AUM) and investment mandate.
Compliance Management: We ensure all economic substance requirements—including the minimum AUM, Investment Professional (IP) headcount, and Local Business Spending (LBS) criteria—are met both at the point of application and on an ongoing basis.
MAS Submission: We prepare and submit the formal application package to the MAS, including the mandatory screening report (where applicable).
Fees
The fees for setting up a Single Family Office (SFO) in Singapore are categorized into three main components: Setup Fees (One-off), Government Fees (One-off/Annual), and Ongoing Operating Costs (Annual/Tiered).
Since a typical SFO structure involves two entities and a tax incentive application (13O or 13U), our professional fees are comprehensive.
1. Setup Fees (Professional Services - One-off)
These are the fees charged by Bestar for the advisory and execution of the SFO structure. The total cost can vary significantly based on the complexity of the structure (e.g., using a Variable Capital Company or a Trust) and the scope of the tax incentive application.
Service Component | Professional Fee Range (SGD) |
Dual Entity Incorporation | S$2,000 – S$5,000 |
(SFO Management Co. & Fund Entity) | (Includes corporate secretarial for 1st year) |
Employment Pass (EP) Application | S$1,000 – S$2,000 per application |
(For key Investment Professionals) | (Excluding government fees) |
13O/13U Tax Incentive Application | S$20,000 – S$50,000+ |
(Advisory, MAS submission & compliance checklist) | (Varies significantly by complexity) |
Total Setup Fee | S$23,000 – S$57,000+ |
Overall Setup Cost: A simple SFO structure, including the basic dual incorporation and the initial tax incentive application, typically has a total professional fee ranging from S$70,000 to S$150,000 or more, depending on the complexity of the MAS application and any required legal structuring.
2. Government Fees (One-off & Annual)
These are mandatory fees paid directly to the Singapore government authorities:
Component | Fee Amount (SGD) | Frequency | Authority |
Company Incorporation | S$315 (S$15 name + S$300 registration) | One-off | ACRA |
Employment Pass (EP) | S$105 (Application) + S$225 (Issuance) | One-off | MOM |
Annual Filing | ~S$60 (Varies by entity type) | Annual | ACRA |
3. Ongoing Operating & Compliance Costs (Annual)
These are the recurring costs to maintain the SFO's regulatory and tax compliance in Singapore.
A. Mandatory Economic Substance Requirements
To qualify for and maintain the 13O or 13U tax incentive, the SFO must meet minimum economic substance criteria, which form the largest part of the recurring costs:
Requirement | 13O Scheme (Minimum AUM S$20M) | 13U Scheme (Minimum AUM S$50M) |
Investment Professionals (IP) | Minimum 2 | Minimum 3 |
Local Business Spending (LBS) | Tiered, starting at S$200,000 per annum | Tiered, starting at S$200,000 per annum (for AUM $50M-$100M) |
LBS covers local expenses such as salaries for Investment Professionals, rent for office space, corporate secretarial fees, tax/audit/legal advisory fees, and fund administration fees. This is a required minimum spend in the local economy.
Salaries for the required Investment Professionals are typically the single largest annual operating expense.
B. Other Annual Administrative Fees
Service Component | Annual Fee Range (SGD) |
Corporate Secretarial & Compliance | S$1,500 – S$5,000 (Per entity) |
Accounting, Tax & Audit | S$5,000 – S$15,000+ (Per entity, based on transaction volume) |
Fund Administration | S$10,000 – S$30,000+ (Varies by fund complexity) |
Nominee Local Director | S$2,000 – S$5,000 (If needed) |
Ready for Next Steps
You are ready to proceed with the formal steps to establish your Single Family Office (SFO) in Singapore.
The next logical steps involve formalizing the structure, preparing the essential documentation, and initiating the official applications.
The Next Steps for Your SFO Setup
We propose moving forward with the following action plan:
Step 1: Formalize the Advisory Mandate
Action: Execute the Advisory & Service Agreement with Bestar Singapore. This agreement will formally outline the scope of work, the specific fee structure for the dual entity incorporation and tax incentive application, and our commitment to your timeline.
Deliverable: A clearly defined work schedule and deliverables list for the entire SFO setup.
Step 2: Finalize SFO Structure & Entity Incorporation
Action: Decide on the legal form for the Fund Entity (e.g., Private Limited Company, Limited Partnership, or Variable Capital Company (VCC)). This choice impacts the administrative and governance framework.
Action: Submit documentation to the Accounting and Corporate Regulatory Authority (ACRA) for the SFO Management Company and the Fund Entity.
Deliverable: Two legally incorporated Singapore entities, ready to commence operations.
Step 3: Initiate Employment Pass (EP) & Staffing
Action: Identify and secure the intended Investment Professionals (IPs), ensuring at least one is a non-family member, to meet the 13O (min. 2 IPs) or 13U (min. 3 IPs) requirements.
Action: Prepare and submit the Employment Pass (EP) applications to the Ministry of Manpower (MOM) for all foreign IPs.
Deliverable: Approved Employment Passes for your key personnel, establishing the necessary economic substance in Singapore.
Step 4: Prepare for MAS Tax Incentive Application (13O/13U)
Action: Finalize the Investment Strategy & Business Plan for the Fund Entity.
Action: Engage an accredited provider for the mandatory AML/CFT Screening Report on the beneficial owners and key personnel (required for all new SFO applications from October 1, 2024).
Action: Draft the required Legal Opinion confirming the SFO's exemption from the MAS fund management licensing.
Deliverable: A complete, compliant application package ready for submission to the Monetary Authority of Singapore (MAS).
Next Action Item for Bestar
To begin, you'll need to complete forms like a "Company Incorporation Form", "KYC (Know Your Client) Form", and a "PDPA Consent Form" to gather necessary details about your proposed company, directors, and shareholders.
You'll need to provide scanned copies of passports/NRICs and proof of residential address for all directors and shareholders. For foreign documents, these may need to be notarized.
Yours sincerely,
The Bestar Singapore Team
Bestar Reply Setting Up a Single Family Office (SFO) in Singapore Inquiry
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