Guide to Setting Up a Family Office in Singapore

setting up family office

High net worth individuals and their families often give significant thought to succession planning by setting up structures such as trusts or foundations to ensure wealth management and stewardship for future generations. If you are thinking of setting up a family office in Singapore to manage your family or your client’s financial and estate needs, here are some key factors for consideration. 

What is a family office?

A family office is an entity set up to manage the wealth of high net worth individuals and their families. It supports wealthy families by providing specialised services in various areas such as investment management, trust and estate planning, legacy planning and wealth transfer, tax and financial planning, budgeting, insurance, risk and compliance management, philanthropy and governance. 

Why set up a family office in Singapore?

Singapore is a choice location for asset and wealth management. It has a stable political and business environment, as well as an attractive tax regime with several tax treaties and free trade agreements that would work to your family office’s advantage. Singapore also does not impose inheritance or capital gains tax. 

There are also robust policies in place to promote the city-state’s financial and asset management sector, and keep it well-regulated. Take for instance the Variable Capital Companies (VCC) structure, which provides greater flexibility in the establishment of investment fund structures. 

Types of Family Offices

Wealthy families typically hold their assets and investments via holding companies or special purpose vehicles. However, managing these entities may not be as efficient as they usually straddle across multiple jurisdictions for confidentiality and tax purposes.

To circumvent these shortcomings, wealthy families are instead forming single family offices comprising a mix of specialists such as investment advisers, insurance directors, lawyers, property managers, and tax and philanthropy directors. In some cases, these advisers do not provide assistance themselves but rather, ensure that any external specialists engaged by the family are well instructed and managed. 

Families may also choose to join hands with other families to establish a multi-family office. A family office can be made up of as few as two staff, or as many as hundreds. 

Why set up a family office?

By restricting knowledge on family wealth and family officers to trusted staff, a family office can ensure confidentiality. A team of specialists would also ensure that wealth management would also be more structured. Another benefit is that whenever there are incoming requests for donations, capital or political contributions, such requests can be politely declined on behalf of the family. 

The next key reason for setting up a family office in Singapore is that the family would be able to set the policies and practices for managing their family wealth. They would be able to retain control over matters such as philanthropy, investment, and the distribution of dividends and income from their family business. By leaving these in capable hands, the family can free up time for other pursuits such as starting new businesses, charitable endeavours and networking. 

Finally, family officers will be able to provide highly customised services. For instance, family offices may be tasked with leadership development for successors. 

How to get started with a family office?

To get started with a family office, discuss and set out the office’s role, mission, scope and accountability. To help you through this process, here are some key questions:

  1. What are the needs of the family that are not met? (e.g. identify investing opportunities, property management, wealth conservation, personal services, medical needs, tax, etc?) 
  2. What are new activities, interests and responsibilities that the family wishes to undertake? 
  3. Which assets will be managed by the family office? (e.g. real estate, trusts, investment portfolios, private yachts and planes, rare artworks or family heirloom items?)
  4. What is the overall investment strategy and mandate for the family office? 
  5. What specialists are required, and what profile of people would the family work best with? 
  6. Who will oversee the family office, and provide leadership, oversight and direction? 
  7. Is a governing board required? 

For your information, running a family office typically costs 1% to 2% of a family’s total active assets (e.g. investment portfolios and trust assets), or more. 

Key Points for Consideration

As there is no basic template for setting up a family office, it can be a challenge to navigate the steps on your own. You could instead consider finding external support by partnering with tax advisers and corporate secretarial services providers such as Corporate Services Singapore to navigate Singapore’s wealth management sector for you. 

At Corporate Services Singapore, our experts can help you set up a family office easily and seamlessly as well as guide you on the different reporting requirements and tax exemption schemes. 

We will be able to provide holistic advice from suitable structures for your family office, as well as the Monetary Authority of Singapore’s (MAS) guidelines for licensing and tax exemption (e.g. Section 13X – Enhanced Tier Fund Tax Exemption Scheme), while complying with all due regulatory requirements. 

If you wish to keep your family office lean, you can set up a discussion with Corporate Services Singapore to review if any key functions such as accounting, corporate secretarial services and tax can be outsourced. Through outsourced services, your family office managers will be able to access an entire team of experienced professionals as well as ancillary services such as external CFO, financial reporting and accounting solutions. 

By partnering with a trusted corporate services solutions provider like Corporate Services Singapore, you will be able to build a strong foundation for your family office, set out a clear roadmap and benefit from a peace of mind. 

Access expert financial advice and solutions and stay on top of your business with Corporate Services Singapore. To reap the benefits of up-to-date financial strategies and better access to a wide variety of accounting solutions and tax expertise, give us a call at 6602 8286 or email us at info@corporateservicessingapore.com to get started today. 

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