(Singapore, Feb 15, 2023) The purpose of Singapore’s tax incentives for single family offices is to provide them certainty that the funds they set up will not be taxed on income derived from investments managed in Singapore, the Monetary Authority of Singapore announced in a statement today.
Without such certainty, funds of a single family office may be taxed in Singapore in addition to the tax that the family (as an investor) may be subject to. This would make it unattractive for single family offices to set up and invest in funds in Singapore, the statement said.
To qualify for the tax incentives, applicants must be able to demonstrate their contribution to Singapore’s economy. They also have to meet minimum requirements on business spending, assets under management, and creating investment professional jobs here.
MAS regularly reviews its tax incentives schemes. In April 2022, MAS raised the minimum criteria for single family offices by increasing hiring requirements and introducing a new requirement for family offices to invest at least 10% or S$10 million of their assets (whichever is lower) in local investments.
Single family offices often start with small teams of investment professionals.
“Hence the more meaningful way to create local jobs is through their positive spillover effects in creating demand for anciliary services like legal, custody and tax services, and fund administration.” the statement says.
As elaborated in this House previously, government agencies are developing initiatives to tap the growing interest from family offices to provide capital to support enterprise financing, ESG investments, and philanthropic activities.
MAS will continue to review the fund tax incentive schemes to ensure that they are relevant and that single family offices can contribute meaningfully to Singapore as they set up their presences here.