The Ultimate Guide to Setting Up a Single Family Office (SFO) in Singapore (2026 Edition)

Singapore SFO Setup Guide 2026

The Ultimate Guide to Setting Up a Single Family Office (SFO) in Singapore (2026 Edition)

Singapore remains the gold standard for global wealth management. With over 1,600 SFOs as of late 2024, the city-state has evolved from a tax-efficient jurisdiction into a sophisticated ecosystem for legacy planning, philanthropy, and alternative investments.

This guide provides a step-by-step roadmap to establishing your SFO, incorporating the latest MAS (Monetary Authority of Singapore) updates effective 2025.

1. Why Singapore in 2026?

Beyond political stability and a 17% flat corporate tax rate, Singapore offers specific advantages for family offices:

• Regulatory Clarity: Clear exemptions for SFOs from the Securities and Futures Act (SFA).

  
  

• Variable Capital Company (VCC) Framework: A flexible structure allowing sub-funds for different family branches.

  
  

• Global Philanthropy Hub: New tax deductions for overseas donations via the Philanthropy Tax Incentive Scheme (PTIS).

2. Key SFO Structures: Choosing the Right Model

Most families utilize a Twin-Company Structure:

1. The Fund Entity: The vehicle that holds the assets (e.g., a Singapore Private Limited Company or VCC).

   
   

2. The Management Entity (SFO): The entity that manages the fund and employs the family’s investment professionals.

Structure	Best For	Licensing Status
Private Limited	Simple, direct asset holding	Typically exempt
VCC (Variable Capital Co)	Multi-generational sub-funds	Requires licensed manager*
Trusts	Succession & Asset Protection	Statutory clarity under SG Law

*Note: SFOs using a VCC may require a case-by-case exemption or a licensed fund manager (LFMC).

3. 2026 Tax Incentive Requirements (13O & 13U)

The MAS has tightened criteria to ensure "economic substance." To qualify for tax exemptions on specified income, you must meet these thresholds:

Section 13O (Singapore Resident Fund Scheme)

• Minimum AUM: S$20 million at the point of application.

  
  

• Investment Professionals (IPs): Minimum 2 IPs (at least 1 must be a non-family member).

  
  

• Local Business Spending (LBS): Tiered spending starting at S$200,000/year.

  
  

• Capital Deployment: 10% of AUM or S$10 million (whichever is lower) must be invested in "Local Investments" (SG-listed equities, climate-related projects, etc.).

Section 13U (Enhanced Tier Fund Scheme)

• Minimum AUM: S$50 million at the point of application.

  
  

• Investment Professionals (IPs): Minimum 3 IPs (at least 1 must be a non-family member)

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• Local Business Spending (LBS): Minimum S$500,000/year.

  
  

• Capital Deployment: Similar 10% or S$10M requirement but with broader global climate project recognition.

4. The 5-Step Setup Process

Step 1: Define Objectives & Governance

Determine if your SFO is for wealth preservation, growth, or philanthropy. Draft a Family Charter to prevent future disputes regarding succession and decision-making.

Step 2: Incorporate Entities

Register your companies via ACRA.

• Pro-Tip: Ensure the SFO and Fund Entity are "related corporations" to qualify for the automatic licensing exemption under the SFA.

Step 3: The Screening Report (New for 2025)

As of October 2024, all tax incentive applications must be accompanied by a Screening Report from an MAS-approved provider. This audits the "Source of Wealth" and "Source of Funds" before MAS even reviews the application.

Step 4: Open Bank Accounts

Expect rigorous AML/KYC checks. You must maintain a private banking account with an MAS-licensed financial institution to qualify for 13O/13U incentives.

• Current Trend: MAS is actively working with banks to reduce the onboarding wait time (historically 6–12 months) down to ~3 months for qualified applicants.

Step 5: MAS Tax Incentive Application

Submit your formal application through the MAS Tax Scheme Portal (launched Jan 2025).

5. Avoiding Common Pitfalls

• The "Non-Family" IP Requirement: Many families struggle to find the right non-family professional. This person must earn at least S$3,500/month and spend >50% of their time on qualifying activities.

  
  

• LBS Compliance: Ensure your S$200k+ annual spend is strictly local. Overseas travel or advisory fees no longer count toward this threshold.

  
  

• Investment Strategy Shifts: While MAS removed the need for prior approval for strategy changes in 2025, you must still ensure all investments fall under "Designated Investments" to keep the tax exemption.

6. Checklist: Are You Ready for 2026?

• [ ] Minimum S$20M AUM (for 13O) or S$50M (for 13U).

• [ ] Identified at least one non-family investment professional.

• [ ] Secured a Singapore-based fund administrator and auditor.

• [ ] Drafted a clear "Local Capital Deployment" plan.

• [ ] Conducted a preliminary Source of Wealth (SOW) audit.

Expert Insight: The Shift Toward Impact

In 2026, the MAS is prioritizing SFOs that contribute to the "Green Transition." Investing in blended finance or Singapore-based climate startups now grants "multipliers" (e.g., 2x credit) toward your capital deployment requirements.

Want to learn more? Consult with a Bestar qualified Singapore tax advisor before proceeding.

Strategic Wealth Structuring: Why Bestar is Singapore’s Preferred SFO Advisor (2026)

The Ultimate Guide to Setting Up a Single Family Office (SFO) in Singapore (2026 Edition)

As Singapore tightens its regulatory framework for Single Family Offices (SFOs), the role of a qualified advisor has shifted from mere "incorporation agent" to "strategic fiduciary partner." Bestar provides the specialized tax and audit expertise required to navigate the Monetary Authority of Singapore’s (MAS) evolving 13O and 13U landscape.

1. Navigating the 2026 Regulatory Landscape

Effective January 1, 2025, MAS has introduced critical updates to the Asset Under Management (AUM) and Local Business Spending (LBS) requirements. Bestar ensures your SFO remains compliant with these real-time shifts:

• Valuation Standards: AUM is now calculated based on the value of "Designated Investments" (DI) rather than just Net Asset Value (NAV). Bestar’s audit team provides precise DI valuations to protect your tax-exempt status.

  
  

• The Screening Report Mandate: Since late 2024, all applications must include a screening report from an MAS-approved provider. Bestar coordinates directly with these providers to ensure your "Source of Wealth" documentation meets the highest scrutiny.

2. Bestar’s Comprehensive SFO Service Suite

Bestar operates as a "one-stop-shop," integrating the legal, financial, and administrative pillars of a family office:

Service Pillar	Bestar’s Specialized Value-Add
Structuring & Setup	Customizing "Twin-Company" structures or Variable Capital Companies (VCC) for multi-generational wealth.
Tax Incentive Advisory	Expert management of Section 13O and 13U applications, including meeting the new tiered spending requirements.
Fiduciary Services	Providing resident nominee directors and high-level corporate secretarial support to satisfy local residency nexus.
HR & Recruitment	Assisting families in hiring the mandatory "Non-Family" Investment Professional (IP) required by MAS.

3. The Bestar Edge: Beyond Compliance

While many firms offer basic tax filing, Bestar’s advisory team focuses on legacy preservation and impact:

A. Local Capital Deployment Strategy

MAS now requires SFOs to invest 10% of AUM (capped at S$10M) in local investments. Bestar identifies qualifying opportunities, including Singapore-listed equities and MAS-approved "Green" blended finance structures, which offer 2x multipliers toward your spending goals.

B. Philanthropy Tax Incentive Scheme (PTIS)

Bestar helps families leverage the PTIS, allowing for 100% tax deductions on overseas donations made through Singapore-based intermediaries—aligning your global charitable goals with Singapore’s tax efficiency.

C. Source of Wealth (SOW) Readiness

A primary cause for SFO application delays is insufficient SOW documentation. Bestar conducts a pre-application audit, identifying gaps in your financial history before they become roadblocks with MAS or private banks.

4. The Setup Roadmap with Bestar

1. Phase 1: Diagnostic (Weeks 1-2): Assessment of AUM, family goals, and eligibility for 13O vs. 13U.

   
   

2. Phase 2: Incorporation (Weeks 3-6): Legal setup of the Fund and Management entities.

   
   

3. Phase 3: Bank Onboarding (Months 2-4): Bestar assists with KYC/AML protocols for Singapore private bank account opening.

   
   

4. Phase 4: MAS Submission (Months 5-8): Procurement of the Screening Report and formal tax incentive application.

   
   

5. Phase 5: Ongoing Compliance: Annual tax returns, LBS tracking, and IP employment pass management.

5. Contact Bestar Today

Setting up a family office in Singapore is no longer a "set-and-forget" process. It requires active management and deep local insight.

Would you like Bestar to conduct a 2026 Readiness Assessment for your family's assets? Our team of qualified tax advisors is ready to secure your legacy in Asia’s premier financial hub.

Expert Note: "The 2025 AUM calculation shift means many SFOs may fall out of compliance if their 'Designated Investments' drop below thresholds. Bestar provides the quarterly monitoring needed to avoid tax clawbacks."

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