Setting Up Wealth Management Company in Singapore
- Roger Pay
- 1 day ago
- 14 min read
Singapore Wealth Management Setup Guide
Setting Up Wealth Management Company in Singapore
Establishing a wealth management or fund management presence in Singapore depends heavily on your target client base (single family, high-net-worth individuals, or third-party/retail investors) and whether your activity falls under regulated investment management.
Step 1: Select Your Business Model & Structure
Model | Target Audience | Primary Entity | Key Licensing & Regulatory Framework |
|---|---|---|---|
Single-Family Office (SFO) | One specific family | Private Limited Company (Pte. Ltd.) + Fund Entity | Generally exempt from licensing under the SFA. Subject to anti-money laundering reporting and substance requirements. |
Multi-Family Office (MFO) | Multiple HNW families / accredited investors | Pte. Ltd., VCC (Variable Capital Company), or Limited Partnership | Licensed Fund Management Company (LFMC) holding a Capital Markets Services (CMS) Licence. |
Fund Management Company (FMC) | Institutional, Accredited, or Retail Investors | Public or Private Ltd / VCC Structure | A/I LFMC (Accredited/Institutional), Retail LFMC, or legacy RFMC (Registered FMC). |
Step 2: Ensure Governance & Licensing Compliance (MAS)
If you are setting up a commercial wealth or fund management firm (MFO or FMC):
Capital Requirements: Base capital requirements range from S$250,000 for A/I LFMCs to higher risk-based capital metrics depending on total Assets Under Management (AUM) and activities.
Key Personnel:
Minimum of 2 resident directors with at least 5 years of relevant investment management experience.
At least 2 or 3 full-time local investment professionals.
Clear segregation of back-office, compliance, and risk management functions.
Fit & Proper Criteria: Board members, substantial shareholders, and key officers must pass MAS Fit and Proper guidelines.
Timeline: CMS License applications submitted to MAS typically take 12 to 16 weeks once fully completed.
Step 3: Tax Exemption Schemes (Sections 13O & 13U)
Singapore offers tax exemption schemes for qualifying fund vehicles managed by a Singapore-based manager:
Section 13O (Onshore Fund Tax Exemption):
Minimum AUM: S$20 million (often S$10M at application growing to S$20M within 2 years).
Minimum 2 local investment professionals.
Tiered local business expenditure (min. S$200,000 annually).
Mandatory capital deployment into local investments (e.g., SGX-listed equities, qualifying debt securities, local unlisted funds).
Section 13U (Enhanced-Tier Fund Tax Exemption):
Minimum AUM: S$50 million at application.
Minimum 3 local investment professionals (at least 1 non-family member for SFOs).
Local business expenditure threshold of S$500,000+ annually.
Step 4: Execution Workflow
Incorporate Business Entities: Register the management company (Pte. Ltd.) and fund vehicle (e.g., Variable Capital Company (VCC) or Private Limited) via ACRA.
Apply for Licensing / Exemptions: File CMS License applications via MAS Corporate e-Licensing (CeL) or submit an SFO notification of commencement.
Establish Local Substance: Lease physical office space, hire qualified local talent (or secure Employment Passes), and appoint local service providers (Corporate Secretarial, Fund Administrator, Custodian, Auditor).
Open Banking & Custody Accounts: Set up corporate and client/fund accounts with MAS-licensed financial institutions.
Tax Incentive Application: Submit formal applications to MAS for Section 13O or 13U status before or alongside capital deployment.
What are the exact regulatory exemption conditions and MAS substance requirements for setting up a Single-Family Office (SFO) in Singapore?
The regulatory landscape for Single-Family Offices (SFOs) in Singapore operates under two complementary MAS frameworks: the Licensing Exemption Framework under the Securities and Futures Act (SFA), and the Substance Requirements for Tax Exemption Schemes under Sections 13O and 13U of the Income Tax Act.
Part 1: MAS Regulatory Exemption Conditions (Class Exemption Framework)
The Monetary Authority of Singapore (MAS) enforces a harmonized, structure-agnostic class exemption framework for SFOs. Eligible SFOs are automatically exempt from holding a Capital Markets Services (CMS) fund management license upon meeting standard conditions and completing a notification process.
1. Entity & Operational Scope
Incorporation: The SFO management entity must be incorporated in Singapore.
Exclusive Scope: The SFO may only manage assets for or on behalf of:
Members of a single family.
Qualifying family entities (trusts, foundations, or corporations wholly owned by family members).
Family-funded charitable organizations.
Qualifying key employees (see ownership limits below).
2. Expanded Definition of "Family Member"
Family members include all lineal descendants of a common ancestor, current/former spouses, adopted children, stepchildren, parents-in-law, and siblings-in-law.
The common ancestor must be no more than 5 generations removed from the youngest generation that established the SFO in Singapore. Once established, all future generations remain eligible.
3. Ownership & Key Employee Limits
Non-Family Participation: Key employees (e.g., CEO, CFO, Executive Directors, Investment Professionals) are permitted to coinvest or hold non-controlling stakes in the SFO.
Caps: Assets managed on behalf of key employees—and total equity held by non-family key employees—must not exceed 10% of the SFO’s total Assets Under Management (AUM) or direct/indirect equity.
4. Banking & Administrative Obligations
MAS-Licensed Banking: The SFO and its fund vehicles must open and maintain bank accounts with an MAS-licensed bank in Singapore (foreign fund vehicles may use a bank in an FATF-compliant jurisdiction).
Local Representative: Appoint a designated point of contact resident in Singapore who is directly employed by the SFO to liaise with MAS.
Notification Deadlines:
New SFOs: Submit a Notice of Commencement within 14 days of starting fund management activities.
Existing SFOs: Must submit a Notice of Continuation to transition into the framework.
Annual Reporting: File an annual return with MAS within 4 months of the SFO’s financial year-end detailing AUM, banking details, and ownership updates.
Prohibited Representations: Exempt SFOs are strictly prohibited from holding themselves out as being "licensed, regulated, or supervised" by MAS in marketing decks, footers, or websites.
Part 2: MAS Local Substance Requirements (Sections 13O & 13U Tax Incentive Schemes)
To enjoy tax exemptions on specified investments under the Section 13O or 13U schemes, SFOs must maintain concrete local operational substance throughout the life of the fund.
Substance Parameter | Section 13O (Onshore Fund) | Section 13U (Enhanced Tier Fund) |
Minimum AUM | S$20 million at application and maintained continuously. | S$50 million at application and maintained continuously. |
Investment Professionals (IPs) | Minimum 2 local IPs, with at least 1 non-family member (1-year grace period allowed for the 2nd IP). | Minimum 3 local IPs, with at least 1 non-family member. |
Local Business Expenditure (LBE) | Tiered based on total AUM: • AUM < S50M:∗∗S200,000/yr** • S50M–S100M: S$500,000/yr • > S$100M: S$1,000,000/yr | Tiered based on total AUM: • AUM < S50M:∗∗S200,000/yr** • S50M–S100M: S$500,000/yr • > S$100M: S$1,000,000/yr |
Local Capital Deployment | At least 10% of AUM or S$10 million (whichever is lower) deployed in qualifying Singapore investments. | At least 10% of AUM or S$10 million (whichever is lower) deployed in qualifying Singapore investments. |
Qualifying local investments include SGX-listed equities, Singapore-issued debt securities, local unlisted operating businesses, climate-related investments, and Singapore-licensed fund products. Certain high-impact categories receive a multiplier (e.g., 1.5x–2x) toward meeting the capital deployment threshold.
What are the Employment Pass requirements and COMPASS scoring guidelines for non-family Investment Professionals hired by a Single-Family Office in Singapore?
For a Single-Family Office (SFO) in Singapore hiring non-family Investment Professionals (IPs), the candidate must meet both the general Ministry of Manpower (MOM) Employment Pass (EP) eligibility rules and the points-based Complementarity Assessment Framework (COMPASS).
Part 1: Prerequisites & Salary Thresholds
Before scoring points under COMPASS, the candidate must first clear MOM's baseline requirements:
Financial Services Salary Floor: SFOs fall under the Financial Services sector. The minimum qualifying fixed monthly salary is S$6,200 per month for entry-level candidates, scaling progressively up to S$11,800 per month for candidates aged 45 and above.
COMPASS Exemption Threshold: If the candidate’s fixed monthly salary is S$22,500 or higher, the application is fully exempt from the COMPASS scoring framework. (The candidate still undergoes standard MOM background, qualification, and fit-and-proper checks).
Part 2: COMPASS Scoring Framework
For candidates earning under S$22,500/month, the EP application must score a minimum of 40 total points across six criteria.
Criterion | Category | 20 Points (Exceeds Expectation) | 10 Points (Meets Expectation) | 0 Points (Below Expectation) |
C1: Salary | Individual | Candidate salary sits at or above 90th percentile of local PMETs in Financial Services for their age group. | Candidate salary sits between 65th and 89th percentile of local PMETs in Financial Services for their age group. | Below 65th percentile. |
C2: Qualifications | Individual | Degree from a Top-Tier Institution on MOM's approved list (e.g., Ivy League, Top 100 global universities). | Degree-equivalent qualification from any accredited university, or recognized professional designations (e.g., CFA charter). | Non-degree or unverified/unaccredited qualification. |
C3: Diversity | Firm-level | Candidate’s nationality makes up < 5% of the firm's foreign PMET workforce. | Candidate’s nationality makes up 5% to 24.9% of foreign PMET workforce. | Candidate’s nationality makes up ≥ 25% of foreign PMET workforce. |
C4: Support for Local Employment | Firm-level | Local PMET share (Singaporeans & PRs) sits at or above the 50th percentile for the sector. | Local PMET share sits between 20th and 49.9th percentile. | Local PMET share is below 20th percentile. |
C5: Skills Bonus | Bonus | +20 pts: Candidate fills a role on MOM's Shortage Occupation List (SOL) and has a Top-Tier degree. +10 pts: On SOL, but non-Top-Tier degree. | — | Role not on SOL. |
C6: Strategic Economic Priorities | Bonus | +10 pts: Awarded if the firm participates in eligible government economic transformation or regionalization programs. | — | Not participating. |
Part 3: SFO-Specific COMPASS Considerations
Because SFOs often operate with lean local teams, specific MOM rules apply directly to how C3 and C4 are calculated:
Small-Firm Default Rule (Fewer than 25 PMETs): Most SFOs have small headcounts. If your SFO entity employs fewer than 25 PMET employees, MOM automatically awards 10 points by default for C3 (Diversity) and 10 points by default for C4 (Local Employment).
Impact: A lean SFO effectively enters COMPASS with 20 points already secured. The candidate only needs to secure 20 remaining points across Salary (C1) and Qualifications (C2) to reach the 40-point threshold.
Mandatory Qualification Verification: All educational credentials submitted under C2 must be pre-verified by a background screening provider accredited by MOM (e.g., Dataflow, Veremark) before submitting the EP application.
Mandatory Fair Consideration Framework (FCF) Job Posting: Unless the role pays S$22,500/month or higher, the SFO must advertise the job on MyCareersFuture for at least 14 consecutive calendar days before submitting an EP application.
What are the specific MAS rules regarding the non-family Investment Professional requirement under Section 13O and 13U?
Under MAS tax incentive guidelines, the non-family Investment Professional (IP) requirement is a core operational substance test. Its purpose is to ensure that the Single-Family Office (SFO) engages external professional expertise in Singapore rather than operating solely as an internal family vehicle.
Key MAS Rules for Non-Family Investment Professionals
1. Minimum Headcount by Tax Scheme
Section 13O (Onshore Fund Scheme): Requires at least 2 Investment Professionals in total, of which at least 1 must be a non-family member.
Section 13U (Enhanced-Tier Fund Scheme): Requires at least 3 Investment Professionals in total, of which at least 1 must be a non-family member.
2. Strict Timeline & No Grace Period
Employed at Point of Application: Both the Section 13O and 13U tax incentive guidelines require all mandatory IPs—including the non-family IP—to be fully employed and onboarded at the time of preliminary application submission.
Note on Grace Periods: While historical guidelines permitted a 1-year grace period to hire the non-family IP, MAS eliminated this allowance. SFOs must have their non-family IP on payroll before filing.
3. Qualifying Definition of an "Investment Professional" (IP)
To count toward the mandatory headcount, the non-family IP must meet all of the following criteria:
Tax Residency: Must be a Singapore tax resident (Singapore Citizen, Permanent Resident, or an Employment Pass holder residing in Singapore).
Core Job Functions: Must serve as a portfolio manager, investment analyst, trader, or asset allocator. Admin, operations, compliance, HR, or secretarial personnel do not count as IPs.
Working Time Commitment: Must devote more than 50% of their working time directly to qualifying investment management activities for the SFO.
Salary Floor: Must be paid a minimum fixed monthly gross salary (historically set at a baseline of S$3,500/month, but in practice aligned with MOM Employment Pass qualifying salary floors, which start at S$6,200/month in the Financial Services sector).
4. Qualifications & Background Experience
Professional Credentials: Non-family IPs must possess relevant formal academic qualifications (e.g., a degree in finance, economics, or business) or recognized professional certifications (e.g., CFA charterholder).
Prior Track Record: MAS expects non-family IPs to have direct, verifiable experience in fund management, wealth management, private banking, or capital markets.
5. Exclusivity & Direct Employment
Direct Employment: The non-family IP must be directly employed by the Singapore SFO management company (or an approved management vehicle) and appear on its payroll.
No Executive Dual-Hatting: Non-family IPs may only hold non-executive roles outside the SFO. They cannot hold executive directorships or full-time operational roles in outside operating businesses, preventing family offices from "sharing" or outsourcing an IP on paper.
6. Verification of "Non-Family" Status
A non-family IP must have no family connection to the beneficial owners or principals of the SFO.
Under MAS guidelines, "family member" encompasses lineal descendants of a common ancestor (up to 5 generations), spouses, ex-spouses, adopted children, stepchildren, parents-in-law, and siblings-in-law. The non-family IP must fall completely outside this defined family tree.
How Bestar Singapore can Help setting up wealth management company in Singapore
Setting up a wealth management company or Single-Family Office (SFO) in Singapore offers structural stability, global tax efficiency, and access to dynamic capital markets. However, navigating the strict regulatory standards set by the Monetary Authority of Singapore (MAS), the Accounting and Corporate Regulatory Authority (ACRA), and the Ministry of Manpower (MOM) requires expert, end-to-end operational execution.
Bestar Singapore acts as your single-point strategic partner, handling every phase of corporate setup, regulatory licensing, tax structuring, and ongoing substance compliance.
Complete Guidance for Setting Up a Wealth Entity in Singapore
[1. Legal Structuring] ──► [2. MAS Licensing / SFO Exemption]
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[3. Tax Schemes (13O/13U)] ──► [4. EP & MOM Substance Setup]
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[5. Custody & Banking] ──► [6. Ongoing Audit & Compliance]
Step-by-Step Execution Framework
Phase | Strategic Action | Bestar’s Role & Deliverables |
|---|---|---|
1. Entity Structuring | Select optimal legal vehicles for management co. and fund entity (Pte. Ltd., VCC, LP). | • ACRA dual-entity incorporation • Draft Constitutions and Shareholders’ Agreements • Provision of Corporate Secretarial services |
2. Licensing & Regulatory Exemption | Apply for Capital Markets Services (CMS) License or file SFO Licensing Class Exemption. | • Prepare MAS Corporate e-Licensing (CeL) filings • Draft legal opinions and SFO Notices of Commencement • Accredited AML/CFT screening reports |
3. Tax Incentive Applications | Secure tax exemption under Section 13O (min. S$20M AUM) or Section 13U (min. S$50M AUM). | • MAS tax incentive application dossiers • Local Business Expenditure (LBE) planning • Local Capital Deployment strategy compliance |
4. Workforce & EP Applications | Hire required local Investment Professionals (IPs) and secure Employment Passes for foreign talent. | • MOM COMPASS score verification • Fair Consideration Framework (FCF) job postings • EP, Dependent Pass, and LTVP processing |
5. Operations & Ongoing Substance | Establish physical substance, local banking, and operational governance. | • MAS-licensed corporate banking & custody setup • Statutory financial audit and tax filings • Outsourced Virtual Family Office accounting |
Why Choose Bestar Singapore?
Integrated Turnkey Solutions: From dual-entity incorporation to annual MAS tax filings, Bestar eliminates multi-vendor friction by providing legal, accounting, tax, HR, and audit services under one roof.
Deep MAS & Regulatory Expertise: Bestar navigates complex regulatory demands—such as mandatory AML/CFT screening, non-family Investment Professional hiring rules, and capital deployment tracking—ensuring your structure remains compliant.
Cost Transparency & Competitive Rates: Bestar offers competitive professional fee packages tailored for new SFOs, licensed fund managers (LFMCs), and Variable Capital Companies (VCCs).
What are the estimated professional and statutory fees for setting up a Single-Family Office (SFO) with Bestar Singapore?
Establishing a Single-Family Office (SFO) in Singapore involves one-off setup expenses, statutory government fees, professional service retainers, and ongoing operational costs.
Estimated Cost Summary for SFO Setup in Singapore
Category | Typical Line Items | Estimated Range (SGD) |
ACRA Statutory Fees | Incorporation of Management Entity & Fund/VCC, business name reservations. | S$600–S$1,500 |
Corporate Secretarial & Incorporation | Dual-entity incorporation, provision of registered office address, minute books, local corporate secretary (annual). | S$1,500–S$3,500 |
Legal & Structuring Advisory | SFO constitution, shareholders’ agreements, trust/family governance structuring, tax-exemption legal opinion. | S$30,000–S$80,000+ |
MAS Regulatory & Tax Incentives | MAS CeL filings, Section 13O / 13U application dossiers, MAS licensing class exemption notifications. | S$20,000–S$50,000 |
MOM Employment Passes | Fair Consideration Framework (FCF) job posting, COMPASS assessment verification, EP applications for IPs/Principals (per pass). | S$2,500–S$5,000 per pass |
Annual Accounting & Statutory Audit | Bookkeeping, statutory accounts preparation, annual income tax filing (IRAS), statutory financial audit for fund/SFO. | S$8,000–S$25,000/yr |
Corporate Banking & Custody Setup | Banking resolution drafting, MAS-licensed corporate account opening assistance, local bank compliance coordination. | S$2,000–S$5,000 |
Mandatory Ongoing Operational Substance (Section 13O / 13U Thresholds)
In addition to professional and setup fees, MAS mandates minimum local annual spend thresholds:
Section 13O (Min. S$20M AUM): Requires a minimum of S$200,000 in Local Business Expenditure (LBE) annually (which scales up to S$500,000+ for higher AUM tiers) and at least 2 local Investment Professionals (IPs).
Section 13U (Min. S$50M AUM): Requires a minimum of S$500,000 in LBE annually (scaling up to S$1,000,000+ for > S$100M AUM) and at least 3 local IPs.
LBE includes professional service fees paid to Singapore firms (legal, accounting, tax, secretarial), local office rental, and salaries paid to Singapore tax-resident staff.
Bestar’s Integrated Service Value
Bestar acts as an end-to-end operational partner, bundling legal advisory, corporate secretarial, tax incentive filing, accounting, and MOM EP application services under one roof. By eliminating the need to engage multiple disparate firms for secretarial, accounting, and immigration functions, Bestar helps lower the initial setup overhead for new SFOs.
What is the detailed month-by-month timeline and execution workflow for securing Section 13O tax approval in Singapore?
Securing Section 13O tax exemption status from the Monetary Authority of Singapore (MAS) follows a structured 6-month execution workflow. Because the tax exemption is prospective (it only applies to gains realized after MAS issues the formal Award Letter), adhering to this sequence prevents premature taxable disposals.
Step-by-Step Execution Workflow (Months 1 to 6)
1 Month 1: Legal Structuring, Due Diligence & ACRA Registration
Foundational Entity Setup
KYC & Source of Wealth: Conduct anti-money laundering (AML) screening and compile verified Source of Wealth (SoW) documentation for the principal family members.
ACRA Incorporation: Register the dual-entity structure via ACRA:
SFO Management Company: Private Limited Company (Pte. Ltd.).
Fund Vehicle: Pte. Ltd. or Variable Capital Company (VCC).
Constitutional Drafting: Draft Constitutions, Shareholders' Agreements, and the Investment Management Agreement (IMA) linking the fund vehicle to the SFO management company.
SFO Licensing Class Exemption: Submit the Notice of Commencement to MAS within 14 days of starting operations to confirm class-exempt SFO status.
2 Month 2: Onboarding & Private Banking Setup
Substance & Account Setup
Private Banking Account: Open the fund vehicle’s private banking account with an MAS-licensed financial institution.
Non-Family IP Onboarding: Directly recruit and onboard at least 1 non-family Investment Professional (IP) meeting MOM's Employment Pass (EP) or tax residency criteria (min. salary floor S$6,200/mo for Financial Services).
Local Business Expenditure (LBE) Budgeting: Model the SFO’s annual operating budget to ensure it meets or exceeds the required S$200,000/year LBE threshold.
Capital Deployment Plan: Map out the 10% or S$10M (whichever is lower) capital allocation strategy into qualifying Singapore investments.
3 Months 3–4: MAS Application Dossier Submission
MAS CeL Filing
Application Assembly: Compile the formal Section 13O submission pack via MAS Access / Corporate e-Licensing (CeL).
Key Submission Attachments:
S$20M+ Assets Under Management (AUM) evidence in Designated Investments (DI).
Proof of bank account setup with an MAS-licensed institution.
Verified credentials, contracts, and non-family status declarations for both IPs.
3-year LBE forecast breakdown.
Family tree verification (confirming ≤5 generations from common ancestor).
Filing & Review: MAS logs the application and conducts its initial assessment phase (typically 4–8 weeks).
4 Month 5: MAS Query Resolution & Candidate EP Submissions
Regulatory Review & Work Passes
MAS Clarification Rounds: Respond to 1–2 rounds of MAS queries regarding investment strategy, IP job scopes, or ownership structures.
MOM EP Applications: Submit Employment Pass applications for non-resident family members or foreign IPs via MOM EP eService (utilizing the small-firm default COMPASS points for small headcount SFOs).
In-Principle Approval (IPA): Receive MAS In-Principle Approval for the Section 13O award.
5 Month 6: Formal Award Letter Issuance & Capital Deployment
Final Inception
Final Undertakings: Submit signed acceptance letters and regulatory undertakings back to MAS.
Award Letter Issuance: MAS issues the official Section 13O Award Letter, establishing the effective tax-exemption commencement date.
Capital Injection & Investment Execution: Transfer fund capital into the bank/custody account and commence active investment management.
Key Milestone Checklist
Phase | Duration | Core Deliverable | Regulatory Body |
|---|---|---|---|
Phase 1 | Month 1 | ACRA BizFile & SFO Class Exemption Notice | ACRA / MAS |
Phase 2 | Month 2 | Corporate Private Bank Account & IP Employment Contracts | Licensed Bank |
Phase 3 | Months 3–4 | Section 13O Application Dossier Submission | MAS |
Phase 4 | Month 5 | MOM Employment Passes & Query Clearances | MOM / MAS |
Phase 5 | Month 6 | Final Section 13O Award Letter | MAS / IRAS |
Ongoing Annual Compliance Cycle
Once approved, the Section 13O tax exemption remains valid for the lifetime of the fund, provided the SFO fulfills three annual reporting requirements:
Annual MAS Declaration: File an annual status report within 4 months of financial year-end verifying that the S$20M AUM floor (tested at FY-end), 2 IP headcounts, LBE spending tier, and local capital deployment thresholds were maintained.
Statutory Financial Audit: Complete an annual independent financial audit of the fund vehicle and management company.
IRAS Tax Filings: File annual income tax returns (Form C) with IRAS reflecting exempt income under Section 13O.
Ready to Establish Your Single-Family Office in Singapore?
Navigating MAS class exemptions, Section 13O/13U tax incentive applications, and MOM COMPASS requirements requires clear, coordinated execution. Bestar provides an integrated solution across dual-entity incorporation, regulatory compliance, Employment Pass processing, tax advisory, and annual statutory auditing.
Contact Bestar Singapore
Direct Hotline: +65 6299 4730
Mobile / WhatsApp: +65 8836 4489
Email: admin@bestar-asia.com
Office Address: 23 New Industrial Road, #04-08 Solstice Business Center, Singapore 536209
How would you like to proceed with Bestar?
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