🚀 Guide to Setting Up a Single Family Office (SFO) in Singapore: Your Gateway to Asian Wealth Management

Guide to Setting Up a Single Family Office (SFO) in Singapore: Your Gateway to Asian Wealth Management | Bestar

Singapore SFO Setup Guide

Guide to Setting Up a Single Family Office (SFO) in Singapore: Your Gateway to Asian Wealth Management

Singapore has firmly established itself as a premier global hub for wealth management and family offices. With a robust legal system, political stability, a pro-business environment, and attractive tax incentives, the city-state is the jurisdiction of choice for Ultra-High Net Worth Individuals (UHNWIs) seeking to centralise and manage their intergenerational wealth.

This comprehensive guide walks you through the essential steps and key considerations for setting up a Single Family Office (SFO) in Singapore.

What is a Single Family Office (SFO)?

A Single Family Office (SFO) is a private company established to manage the assets and financial affairs of one specific wealthy family. Unlike a Multi-Family Office (MFO), which serves multiple clients, an SFO offers highly customized services and unparalleled privacy, control, and alignment with the family's long-term values and legacy goals.

Typical SFO functions include:

• Investment Management: Developing and executing investment strategies, portfolio management, and oversight.

  
  

• Financial & Tax Planning: Consolidated accounting, tax compliance, and strategic structuring.

  
  

• Succession Planning & Governance: Drafting a Family Charter, establishing governance structures, and managing wealth transfer.

  
  

• Philanthropy: Advising on charitable giving and setting up foundations.

  
  

• Lifestyle Management: Handling non-financial administration and private affairs.

  
  

🇸🇬 Why Choose Singapore for Your SFO?

Singapore's appeal as an SFO destination is based on several compelling factors:

Feature	Benefit for SFOs
Political & Economic Stability	Strong rule of law, low corruption, and a stable government provide a secure operating environment.
Favorable Tax Regime	No capital gains tax, no estate duty, and a low flat corporate tax rate (17%).
Financial Ecosystem	Deep talent pool of financial, legal, and tax professionals, supported by the Monetary Authority of Singapore (MAS).
Strategic Location	A gateway to Asia, offering easy access to high-growth investment opportunities across the region.
Regulation Exemption	SFOs that manage only one family's assets can typically be exempt from licensing under the Securities and Futures Act (SFA).

Step-by-Step Guide to Setting Up Your SFO

The process of establishing an SFO in Singapore requires meticulous planning and consultation with experienced professional advisors.

Phase 1: Planning and Defining the Structure

1. Define Objectives and Scope: Clarify the core purpose of the SFO (e.g., wealth preservation, active investment, philanthropic focus).

   
   

2. Determine Legal Structure: The SFO is typically set up as a Private Limited Company incorporated in Singapore. For the fund vehicle that holds the assets, a popular option is the Variable Capital Company (VCC), due to its flexibility in capital distribution and ring-fencing of sub-funds.

   
   

3. Establish Family Governance: Create a Family Charter and governance framework to outline the family's values, decision-making processes, and succession plan.

   
   

Phase 2: Incorporation and Regulatory Compliance

1. Incorporate the SFO Entity: Register the company (e.g., Private Limited Company) with the Accounting and Corporate Regulatory Authority (ACRA).

   
   

2. SFA Licensing Exemption: A key advantage for SFOs. You will typically rely on the related corporation exemption from the MAS licensing requirement, provided the SFO is wholly owned and controlled by members of the same family and manages only their assets.

   
   

3. Open Bank Accounts: Establish banking relationships with MAS-licensed financial institutions for both the SFO (operational) and the fund vehicle (custody/investment).

   
   

Phase 3: Securing Tax Incentives

The primary draw for SFOs is the suite of fund tax incentive schemes offered by the MAS. These schemes exempt specific investment income derived by the fund vehicle from Singapore income tax.

Scheme	Focus	Minimum AUM	Investment Professionals (IPs)	Annual Spending
Section 13O (Singapore Resident Fund)	Onshore, Singapore-based funds.	S$20 million	Minimum 2 IPs (at least 1 non-family member)	Tiered, starting from S$200,000 in local business spending.
Section 13U (Enhanced-Tier Fund)	Larger, often global funds.	S$50 million	Minimum 3 IPs (at least 1 non-family member)	Tiered, with higher overall spending requirements.

Key Requirements for Both Schemes (from July 2023 onwards):

• Capital Deployment Requirement (CDR): The fund vehicle must invest the lower of S$10 million or 10% of AUM in specified local or climate-related investments per year.

  
  

• IPs: Must be Singapore tax residents with relevant experience, earning a minimum salary, and substantially engaged in the qualifying activity.

  
  

Phase 4: Operational Setup and Team Building

1. Recruit Key Professionals: Hire qualified staff (Investment Managers, Accountants, Compliance Officers) to meet the tax incentive requirements. The minimum headcount often requires non-family member Investment Professionals.

   
   

2. Secure Work Passes: Apply for relevant work passes, such as the Employment Pass (EP) or the Overseas Networks & Expertise Pass (ONE Pass), for relocating principals and key staff.

   
   

3. Implement Infrastructure: Set up robust IT systems, data protection protocols, and back-office processes for accounting and compliance reporting (e.g., Common Reporting Standards - CRS, FATCA).

   
   

Key Considerations for UHNWIs

1. The Global Investor Programme (GIP)

The GIP Family Office Option offers a pathway to Singapore Permanent Residency (PR) for principals of an SFO.

• Investment: A minimum of S$2.5 million into a new or existing Singapore-based SFO.

  
  

• AUM Requirement: The SFO must have an AUM of at least S$200 million.

  
  

• Track Record: The applicant must have a substantial entrepreneurial, investment, or management track record.

  
  

2. Philanthropy and Legacy

Singapore supports philanthropic activities with a Philanthropy Tax Incentive Scheme, allowing qualifying donors with an incentivised fund vehicle (13O/13U) to claim 100% tax deduction for overseas donations (capped at 40% of statutory income) made through qualifying local intermediaries.

3. Compliance and Ongoing Reporting

While SFOs are exempt from licensing, they must maintain strict compliance with anti-money laundering (AML), counter-financing of terrorism (CFT) regulations, and the ongoing requirements of the 13O/13U schemes (e.g., annual declaration of continued eligibility to MAS, minimum local business spending, and AUM thresholds).

Assessing your Eligibility for the 13O/13U Schemes

Assessing your eligibility for the Section 13O (Singapore Resident Fund Scheme) or Section 13U (Enhanced-Tier Fund Scheme) tax incentives for a Single Family Office (SFO) in Singapore involves meeting specific criteria set by the Monetary Authority of Singapore (MAS).

These schemes grant tax exemption on specified investment income from designated investments for the fund vehicle managed by your SFO.

Key Requirements for SFOs (Sections 13O & 13U)

The following table summarizes the updated conditions for SFOs applying for the 13O and 13U schemes (effective from July 5, 2023, for new applications).

Feature	Section 13O (Singapore Resident Fund)	Section 13U (Enhanced-Tier Fund)
Minimum Assets Under Management (AUM)	S$20 million in Designated Investments (DI), maintained throughout the incentive period.	S$50 million in Designated Investments (DI), maintained throughout the incentive period.
Investment Professionals (IPs)	Minimum 2 IPs, of whom at least 1 is not a family member of the beneficial owners.	Minimum 3 IPs, of whom at least 1 is not a family member of the beneficial owners.
Local Business Spending (LBS)	Tiered Requirement, with a minimum S$200,000 in LBS per year.	Tiered Requirement, with a minimum S$200,000 in LBS per year.
Capital Deployment Requirement (CDR)	Required. Must invest the lower of S$10 million or 10% of AUM in specified local investments per year.	Required. Must invest the lower of S$10 million or 10% of AUM in specified local investments per year.
Fund Structure	The fund vehicle must be a Singapore tax resident.	The fund vehicle can be either onshore or offshore.
Private Banking Account	Must maintain a private banking account with a MAS-licensed financial institution.	Must maintain a private banking account with a MAS-licensed financial institution.

Detailed Look at Key Criteria

1. Investment Professionals (IPs)

The quality and role of the IPs employed by the SFO are strictly defined:

• Singapore Tax Resident: All IPs must be tax residents in Singapore throughout the incentive period.

  
  

• Qualified: They must have relevant formal work experience or academic qualifications.

  
  

• Role: They must be employed as a portfolio manager, research analyst, or trader.

  
  

• Salary & Engagement: Must earn more than S$3,500 per month and engage for more than 50% of their time in the qualifying activity.

  
  

• Non-Family IP: The requirement for at least one IP to be a non-family member ensures the SFO brings external talent and expertise to the Singapore financial sector.

2. Local Business Spending (LBS)

The LBS requirement ensures the SFO contributes to the local economy. The requirement is tiered based on the SFO's AUM in Designated Investments (DI):

AUM in DI	Minimum Total Annual Spending	Minimum Local Business Spending (LBS)
Less than S$50 million	S$200,000	S$200,000
S50millionto<S100 million	S$500,000	S$200,000
S$100 million and above	S$1 million	S$200,000

• Note: The total annual spending can include the minimum LBS, as well as eligible donations to local charities and grants to blended finance structures (which are recognised at 2x their value).

3. Capital Deployment Requirement (CDR)

This new requirement mandates local investment to deepen Singapore's capital markets. The fund must deploy capital into specified Singapore-focused assets, such as:

• Equities, REITs, Business Trusts, or ETFs listed on MAS-approved exchanges.

  
  

• Qualifying Debt Securities (QDS).

  
  

• Investments into non-listed Singapore operating companies.

  
  

• Climate-related investments and blended finance structures.

SFO Exemption from Licensing (SFA)

Before applying for the tax incentives, your SFO company must meet the conditions for exemption from the requirement to hold a Capital Markets Services (CMS) Licence under the Securities and Futures Act (SFA).

The key SFA exemption is the Related Corporation Exemption, which requires the SFO to:

1. Be wholly owned by members of the same family.

   
   

2. Manage the assets of only one family.

If this condition is met, the SFO is exempt from licensing and can proceed with the 13O or 13U tax incentive application for its fund vehicle.

Conclusion

Establishing a Single Family Office in Singapore is a sophisticated and rewarding undertaking that positions a family for long-term wealth preservation and growth in the heart of Asia. By leveraging Singapore's stability, favourable tax regime, and robust support from the MAS and EDB, UHNWIs can create an enduring structure tailored to their specific intergenerational goals.

How Bestar Singapore Can Guide Your Single Family Office (SFO) Setup

Guide to Setting Up a Single Family Office (SFO) in Singapore: Your Gateway to Asian Wealth Management

Setting up a Single Family Office (SFO) in Singapore is a sophisticated process that requires deep expertise across corporate law, tax, regulatory compliance, and immigration. Bestar Singapore specializes in providing the integrated, end-to-end solutions necessary for Ultra-High Net Worth Individuals (UHNWIs) to successfully establish their SFO and maximize the benefits of Singapore's attractive wealth management framework.

Here is a guide on how Bestar Singapore supports the SFO setup process:

1. Optimal Structuring and MAS Exemption

The foundation of a compliant and efficient SFO is the correct legal structure. Bestar's advisory team provides expert guidance on the initial setup phase:

• SFO Structuring: Advising on the optimal legal vehicles—typically a Private Limited Company in Singapore (the SFO) managing a dedicated fund vehicle (e.g., a Variable Capital Company, or VCC)—to achieve the family’s goals for wealth preservation, succession, and tax efficiency.

  
  

• SFA Licensing Exemption: Crucially, Bestar guides the SFO to qualify for the "Related Corporation" exemption under the Securities and Futures Act (SFA). This ensures the SFO remains exempt from the rigorous regulatory licensing requirements of the Monetary Authority of Singapore (MAS) by managing assets for only one family.

  
  

• Trust and Governance Setup: Integrating the SFO with associated family trusts and preparing a Family Charter to clearly define governance, succession rules, and family values for long-term alignment.

2. Securing MAS Tax Incentives (13O & 13U Schemes)

The primary reason UHNWIs choose Singapore is the suite of fund tax incentives. Bestar Singapore specializes in navigating the stringent application process for the Section 13O and Section 13U schemes.

Incentive Scheme Support	Bestar’s Critical Role
Eligibility Assessment	Conducting a preliminary review of your Assets Under Management (AUM) and investment plan to determine the most suitable scheme (13O or 13U).
Application Submission	Preparing and submitting the complex application package to the MAS, ensuring all disclosures are accurate and compliant.
Economic Conditions	Advising on the strategy to meet the strict quantitative requirements, including: Investment Professionals (IP) Headcount: Ensuring the right mix of Singapore tax resident staff, including the minimum required non-family IPs. Local Business Spending (LBS): Calculating and advising on eligible local expenditures to meet the tiered LBS requirement. Capital Deployment Requirement (CDR): Formulating a plan to meet the mandatory local investment thresholds (e.g., in Singapore-listed securities or qualifying non-listed local operating companies).
Ongoing Compliance	Providing annual compliance support to ensure the fund vehicle continues to meet the AUM, IP, LBS, and CDR criteria throughout the incentive period.

Bestar’s experience helps minimize risks of non-compliance and ensures the SFO benefits from tax exemption on specified investment income.

3. HR, Immigration, and Staffing Solutions

An SFO requires a dedicated, compliant team. Bestar supports the critical manpower aspect of the setup:

• Work Pass Applications: Assisting with the application of Employment Passes (EP) and the Overseas Networks & Expertise Pass (ONE Pass) for the Principal, key family members, and non-family Investment Professionals.

  
  

• Payroll and HR Outsourcing: Providing end-to-end payroll outsourcing and HR advisory to ensure compliance with Singapore labour laws for locally hired and relocated staff.

  
  

• Recruitment Advisory: Advising on the minimum salary and job function requirements for Investment Professionals to satisfy the MAS's criteria for the 13O/13U incentives.

4. Virtual Family Office and Administrative Support

Once the structure is in place, the SFO requires robust operational support. Bestar functions as a "Virtual Family Office" by handling crucial back-office functions, allowing the family to focus purely on investment strategy:

• Corporate Secretarial Services: Managing all statutory compliance with the Accounting and Corporate Regulatory Authority (ACRA), including filing annual returns, maintaining registers, and managing changes in directorships/shareholders.

  
  

• Accounting and Bookkeeping: Providing consolidated financial reporting, accurate accounting, and bookkeeping for both the SFO entity and the underlying fund vehicle.

  
  

• Tax Compliance: Handling all corporate income tax and Goods and Services Tax (GST) filings, ensuring full compliance with the Inland Revenue Authority of Singapore (IRAS).

  
  

• Audit and Assurance: Providing independent Audit and Assurance services, which are often required for the SFO’s fund vehicle and/or underlying corporate structures.

Bestar Singapore acts as a single-point-of-contact partner, offering licensed expertise and a seamless, integrated approach to establishing and maintaining your Single Family Office in Singapore.

Ready to launch your SFO in Singapore? Would you like to schedule an introductory consultation with Bestar's Family Office Advisory Leader?

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