Family offices looking to benefit from Singapore’s tax incentives are set to face tighter requirements including greater asset size and more string hiring criteria.
The Monetary Authority of Singapore announced the tightening of requirements for family office-related tax incentives earlier this week and the changes will come into effect on Monday next week on April 18.
For family offices registering under Section 13O – locally incorporated structures – the minimum fund size has been set at S$10 million ($7.4 million) at the point of application and with the commitment to increase to S$20 million within two years. Currently, there is no minus asset size for 13O applicants.
In addition, such family offices must have a minimum of two investment professionals with a 1-year grace period for hiring the second professional and minimum local business spending of S$200,000, subject to tiered criteria based on the assets under management.
13U Applicants
As for family offices seeking the 13U qualification – family office structures that can be under offshore jurisdictions – there is a new rule to employ at least one non-family member out of the three required investment professionals.
The minimum local business spending has been raised from S$200,000 to S$500,000.
In addition, both 13O and 13U entities must make local investments equivalent to at least 10 percent of assets under management or S$10 million, whichever is lower, which includes Singapore-listed stocks, qualifying debt securities, funds distributed by Singapore-licensed fund managers and private equity from Singapore-incorporated companies.
