How to Set Up a Family Office in Singapore Successfully: Step-by-Step Guide & Tax Incentives
How to Set Up a Family Office in Singapore Successfully: Step-by-Step Guide & Tax Incentives
Singapore stands as a primary global wealth hub, offering political stability, a robust legal framework, and competitive tax incentive schemes. Setting up a family office in Singapore allows high-net-worth (HNW) and ultra-high-net-worth (UHNW) families to consolidate asset management, execute succession planning, manage risk, and optimize international tax exposure.
This guide details the structural differences between Single Family Offices (SFOs) and Multi-Family Offices (MFOs), regulatory requirements under the Monetary Authority of Singapore (MAS), qualifying criteria for tax incentive schemes (Sections 13O and 13U), and actionable setup steps.
Single Family Office (SFO) vs. Multi-Family Office (MFO)
The primary distinction between an SFO and an MFO lies in ownership, regulatory oversight, and total operational scope.
Feature | Single Family Office (SFO) | Multi-Family Office (MFO) |
Clientele | Serves 1 single family exclusively | Serves multiple unrelated HNW/UHNW families |
MAS Licensing | Typically exempt from Licensing under SFA | Capital Markets Services (CMS) license required |
Control & Governance | 100% controlled by the family | Shared governance across multiple families |
Privacy Level | Maximum privacy (no external investors) | Moderate privacy (shared operational infrastructure) |
Setup & Maintenance Costs | Higher operational overhead | Lower per-family cost (shared overhead) |
Ideal Profile | Families with S$20M+ to S$50M+ AUM | Families seeking professional management with lower asset thresholds |
Strategic Advantages of Establishing a Singapore Family Office
Favorable Tax Framework: No capital gains tax, no estate duty/inheritance tax, and standard corporate income tax capped at 17%.
Extensive DTA Network: Double Taxation Agreements (DTAs) with over 90 international jurisdictions protect against double taxation on cross-border revenue.
Global Investor Programme (GIP): Direct pathway to Singapore Permanent Residency (PR) for qualifying UHNW principles establishing an SFO with minimum Assets Under Management (AUM) thresholds.
Robust Financial Infrastructure: Access to top-tier global private banks, wealth managers, tax advisors, legal firms, and corporate service providers.
Key Tax Incentives: Section 13O and Section 13U
The Monetary Authority of Singapore (MAS) and the Inland Revenue Authority of Singapore (IRAS) offer specific fund tax exemption schemes under the Income Tax Act 1947 to eliminate corporate tax on qualifying investment gains.
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│ Singapore Family Office Setup │
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┌─────────────────────┴─────────────────────┐
▼ ▼
┌──────────────────────────────────────┐ ┌──────────────────────────────────────┐
│ Section 13O (Resident Fund Scheme) │ │ Section 13U (Enhanced-Tier Scheme) │
├──────────────────────────────────────┤ ├──────────────────────────────────────┤
│ • Min AUM: S$20M (S$10M at launch) │ │ • Min AUM: S$50M at launch │
│ • Entity: Singapore Co. Ltd │ │ • Entity: Any Legal Structure / VCC │
│ • Local Spend: S$200k - S$1M tiered │ │ • Local Spend: Min S$200k │
│ • Professionals: Min 2 │ │ • Professionals: Min 3 (1 Non-Family)│
└──────────────────────────────────────┘ └──────────────────────────────────────┘
Comparative Breakdown: Section 13O vs. Section 13U
Tax Incentive Criteria | Section 13O (Singapore Resident Fund) | Section 13U (Enhanced-Tier Fund) |
Minimum AUM at Application | S$20 Million (minimum S$10M at launch, rising to S$20M within 2 years) | S$50 Million (must be met at time of application) |
Qualifying Fund Vehicle | Singapore-incorporated company (e.g., Pte Ltd) | Any legal entity (Company, Trust, Limited Partnership, VCC) |
Investment Professionals | Minimum 2 investment professionals (can both be family members) | Minimum 3 investment professionals (at least 1 must be a non-family member) |
Local Business Spending | Tiered spend starting from S$200,000 up to S$1,000,000 annually based on AUM | Minimum S$200,000 annual local business spending |
Local Capital Deployment | 10% of AUM or S$10M (whichever is lower) deployed in local qualifying investments | 10% of AUM or S$10M (whichever is lower) deployed in local qualifying investments |
Note on Local Capital Deployment: Qualifying investments include equities listed on Singapore-licensed exchanges, Singapore debt securities, funds managed by Singapore-licensed managers, and direct investments into non-listed Singapore operating companies.
Regulatory Framework and MAS Licensing Guidelines
Single Family Office (SFO) Exemption
Under the Securities and Futures Act (SFA), an SFO managing assets solely on behalf of its related entities or family members typically qualifies for a licensing exemption under Class Exemption rules or by applying directly to MAS for a formal licensing exemption.
Multi-Family Office (MFO) Requirements
An MFO managing funds for multiple unrelated families provides fund management services to third parties. MFOs must apply for a Capital Markets Services (CMS) license for fund management or register as a Registered Fund Management Company (RFMC), adhering to:
Minimum base capital and financial resources requirements.
Fitness and propriety assessments for key directors and executive officers.
Established Risk Management Frameworks and Anti-Money Laundering (AML/CFT) controls.
5 Steps to Establish a Family Office in Singapore
1.Define Goals & Choose Structure: Establish family governance principles.
Determine primary objectives across wealth preservation, succession planning, asset allocation, and philanthropy. Decide between an SFO or MFO structure, and choose the underlying fund vehicle (e.g., Private Limited Company or Variable Capital Company - VCC).
2.Incorporate Corporate Entities: Set up the Management Company and Fund Vehicle.
Incorporate the Single Family Office Management Company (SFO Manager) and the Fund Entity in Singapore via ACRA. Establish internal governance, bank accounts, and corporate secretarial management.
3.Apply for Tax Incentive Schemes (13O / 13U): Submit formal application to MAS.
Prepare the formal tax exemption application and pitch deck for MAS review. Demonstrate compliance with minimum AUM, local business expenditure commitments, investment team headcount, and local capital deployment rules.
4.Recruit Staff & Finalize Operations: Meet economic substance requirements.
Hire required investment professionals and executive team members. Apply for Employment Passes (EP) for family members or expatriate managers through the SFO entity where appropriate.
5.Implement Annual Compliance & MAS Reporting: Maintain continuous eligibility.
Submit annual Declarations of Continued Eligibility (DCE) to MAS, maintain statutory financial audit records, fulfill annual tax filings with IRAS, and execute required anti-money laundering checks.
Common Mistakes to Avoid
Underestimating Ongoing Substance Costs: Failing to factor in statutory audit, legal retainer, local employment salaries, and compliance reporting costs against the minimum business spend threshold.
Ignoring Local Capital Deployment Deadlines: Failing to allocate 10% of total AUM (or S$10M) into qualifying Singapore-based assets within the required timeline.
Improper Governance Frameworks: Blurring the line between personal expenses and family office assets, which can compromise corporate asset protection and statutory tax-exempt status.
Delayed Regulatory Submissions: Missing annual MAS compliance declarations or late filing of tax documentation with IRAS.
Frequently Asked Questions
Can foreign HNW individuals set up a family office in Singapore?
Yes. Foreign individuals can set up an SFO in Singapore. Qualifying principals may also seek Singapore Permanent Residency through the Global Investor Programme (GIP) Scheme 3, which requires a minimum S$200M AUM threshold (with S$50M deployed into local qualifying categories).
How long does it take to set up a Single Family Office in Singapore?
Setting up the corporate entities takes 1 to 2 weeks. Preparing bank accounts, hiring staff, applying for MAS licensing exemptions, and securing preliminary Section 13O/13U approval typically requires 3 to 6 months depending on client readiness and regulatory review schedules.
Is capital gains tax charged on investments made by a Singapore SFO?
No. Singapore does not levy capital gains tax. Investment profits, dividend gains, and interest earnings managed under approved Section 13O or Section 13U fund structures remain tax-exempt.
How Bestar Can Help Your Family Office Setup in Singapore
How to Set Up a Family Office in Singapore Successfully: Step-by-Step Guide & Tax Incentives
Singapore is a premier global financial center, offering high-net-worth (HNW) and ultra-high-net-worth (UHNW) families an ideal environment to preserve, manage, and transfer wealth. Establishing a family office in Singapore involves navigating tax incentive schemes, Monetary Authority of Singapore (MAS) regulatory guidelines, anti-money laundering (AML) compliance, and ongoing governance.
Bestar delivers end-to-end corporate services, regulatory advisory, and structure management to help foreign and local families set up Single Family Offices (SFOs) and Multi-Family Offices (MFOs) efficiently in Singapore.
Why Partner with Bestar for Family Office Setup?
Bestar acts as a single point of contact for the entire lifecycle of your family office, coordinating legal, structural, operational, and tax requirements.
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│ Bestar Advisory Services │
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┌──────────────────────┬──────────────┴──────────────┬──────────────────────┐
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┌───────────────────┐ ┌───────────────────┐ ┌───────────────────┐ ┌───────────────────┐
│ Structure Design │ │ Tax Incentives │ │ MAS Exemption / │ │ Ongoing Operational│
│ & Incorporation │ │ (13O & 13U) │ │ CMS Licensing │ │ & Compliance Support│
└───────────────────┘ └───────────────────┘ └───────────────────┘ └───────────────────┘
Bestar’s Core Family Office Services
1. Structural Advisory & Corporate Incorporation
Bestar assists in defining family governance goals and selecting the optimal corporate vehicle.
Entity Setup: Incorporating Singapore Private Limited Companies, Variable Capital Companies (VCC), or trust structures.
SFO vs. MFO Advisory: Helping families choose between a Single Family Office (100% private control) or Multi-Family Office structure based on Assets Under Management (AUM) and operational budgets.
Corporate Secretarial Services: Managing ACRA compliance, statutory registers, and board resolutions.
2. Tax Incentive Applications (Section 13O & Section 13U)
To maximize returns, Singapore offers tax exemption schemes under the Income Tax Act. Bestar structures your setup to ensure full alignment with MAS criteria:
Section 13O (Singapore Resident Fund Scheme): Guidance on meeting the minimum S$20M AUM threshold (S$10M at launch), S$200,000+ local business spend, and local capital deployment commitments.
Section 13U (Enhanced-Tier Fund Scheme): Advisory for funds targeting S$50M+ AUM across global or local structures, including team staffing requirements.
IRAS Tax Filings: Preparing annual tax returns and applying for GST exemptions on eligible financial advisory services.
3. MAS Regulatory & Licensing Guidance
Licensing Exemptions: Securing SFO licensing exemptions under the Securities and Futures Act (SFA) when managing assets exclusively for a single family.
CMS Licensing for MFOs: Assisting Multi-Family Offices with Capital Markets Services (CMS) license applications, fit-and-proper declarations, and risk management frameworks.
Annual Declarations: Submitting annual Declarations of Continued Eligibility (DCE) to MAS to maintain regulatory compliance.
4. Employment & Immigrant Investor Support
Employment Passes (EP): Securing EPs for family members or external professional investment managers hired by the SFO.
Global Investor Programme (GIP): Supporting UHNW individuals applying for Singapore Permanent Residency (PR) via GIP Scheme 3 (Family Office Track).
5. Accounting, Audit & Ongoing Governance
Bookkeeping & Financial Reporting: Maintaining multi-currency financial records in accordance with Singapore Financial Reporting Standards (SFRS).
Economic Substance Tracking: Monitoring local business expenditure, investment professional headcount, and local capital deployment rules to avoid penalties or loss of tax exemption status.
Key Tax Incentive Schemes at a Glance
Feature | Section 13O (Resident Fund) | Section 13U (Enhanced-Tier Fund) |
Minimum AUM | S$20M (S$10M at launch, rising to S$20M in 2 yrs) | S$50M at application |
Qualifying Entity | Singapore-incorporated company | Any legal entity (Company, VCC, Trust, LP) |
Investment Team | Minimum 2 investment professionals | Minimum 3 professionals (at least 1 non-family member) |
Local Expenditure | Minimum S$200k to S$1M tiered annually | Minimum S$200k annually |
Capital Deployment | 10% of AUM or S$10M (whichever is lower) in local assets | 10% of AUM or S$10M (whichever is lower) in local assets |
Step-by-Step Engagement Process with Bestar
1.Discovery:Initial Consultation & Needs Analysis.
Bestar evaluates your family's objectives, asset scale, investment scope, and governance preferences to recommend an optimal SFO or MFO structure.
2.Incorporation:ACRA Registration & Entity Setup.
We draft necessary constitutional documents and incorporate the management company and fund vehicle in Singapore.
3.MAS & IRAS Filings:Tax Exemption & Regulatory Submission.
Bestar prepares and submits Section 13O or Section 13U applications and manages MAS licensing exemption filings.
4.Operationalization:Work Visas & Staffing.
We handle Employment Pass applications for principals and investment team members and assist in setting up corporate banking facilities.
5.Ongoing Maintenance:Annual Compliance & Financial Audits.
Bestar handles statutory filings, annual MAS DCE submissions, accounting, and ongoing tax compliance.
Frequently Asked Questions
Why should a family office use Bestar instead of managing setup independently?
Establishing a family office requires coordination across corporate law, MAS regulations, tax incentive rules, employment passes, and banking setup. Bestar streamlines this by providing comprehensive, cross-disciplinary corporate services, reducing delays and ensuring strict compliance with local substance mandates.
How long does it take Bestar to complete a family office setup?
Incorporating corporate entities takes 1 to 2 weeks. The entire setup—including banking onboarding, Employment Pass processing, and Section 13O/13U preliminary approval from MAS—typically takes 3 to 6 months.
Can Bestar assist foreign family members in getting Singapore residency?
Yes. Bestar assists eligible principals with Employment Passes through the family office entity and provides structural support for qualifying Global Investor Programme (GIP) Permanent Residency applications.
Ready to establish your family office in Singapore with Bestar? Choose your preferred next step:
Schedule a Family Office Consultation with Bestar
Request a Tailored Fee Proposal & Checklist
Explore Singapore VCC Options with Bestar
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