For Ultra High Net Worth (UHNW) individuals or families, there is plenty of choice when it comes to choosing a strategic location to set up a family office. Some countries in the region, such as Thailand and Malaysia, are introducing various measures to attract investments from high-net-worth individuals and welcoming them to set up family offices in these countries.
Singapore is becoming an attractive location for establishing a family office, judging by the growing number of family offices being set up in the country. The number of Single Family Offices grew from 400 in 2020 to 700 as at end-2021, according to estimates by the Monetary Authority of Singapore (MAS).
Interest in setting up family offices in Singapore is likely to grow further as the country as well the ASEAN region gradually recover from the COVID-19 pandemic.
Here are 5 top reasons why you should consider setting up a family office in Singapore instead of other countries in the region:
1. Economic and Political Stability
Singapore offers a stable economic and political environment, strong rule of law and clarity in tax and regulatory regime. The regulations that relate to family offices are clearly communicated. For example, since April 2022, new rules require a family office to set a minimum fund size of S$10 million at the point of application for tax incentives, and the fund must commit to increase its assets under management to S$20 million within a two-year period.
2. Growing Ecosystem for Family Office
Singapore is developing expertise to enhance the family office ecosystem through partnerships with the public and private sectors. In order to support the development of talent pool in Singapore with the relevant skillsets to service the needs of family offices, the Economic Development Board (EDB) has developed competency standards dedicated to family office. The Monetary Authority of Singapore (MAS) also collaborates with the Institute of Banking and Finance (IBF), to develop skills roadmap to raise the level of competency of professionals working in family offices. In addition, the SMU Business Families Institute launched a series of masterclasses accredited by the IBF.
3. Vibrant Start-up Scene
With a vibrant start-up ecosystem, Singapore offers exciting opportunities for family offices with an interest in venture capital. There are over 3,900 start-ups within a global network of over 300 private equity and venture capital managers, and more than 200 incubators and accelerators. The startup ecosystem is also supported by government agencies such Startup SG as well as leading local universities such as National University of Singapore (NUS) and Nanyang Technological University (NTU).
4. Wide Network of Trade Agreements
Family offices established in Singapore can benefit from a wide network of 25 free trade agreements and Double Taxation Agreements (DTAs) with 80 countries. For example, the DTAs enable family offices to better manage withholding taxes from overseas investments. Among the latest free trade agreement is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that links Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
5. Strong Financial Hub
Singapore has a strong reputation as a regional financial hub. According to the recent Global Financial Center’s Index’s (GFCI), Singapore has overtaken Hong Kong to become Asia’s top financial center. Most renowned private banks such as J.P. Morgan, Lombard Odier, UBS, Goldman Sachs and Credit Suisse have their presence in Singapore.
Besides the key advantages mentioned above, it’s likely that you may have other reasons for listing Singapore as a top choice for setting up a family office. Despite the increasing global economic uncertainty and geopolitical risks, Singapore has always maintained its reputation as a safe haven for wealth and attractive tax incentives. We at Healy Consultants Group PLC will be happy to assist you to set up a family office in Singapore, or wherever your choice location is.
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