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Family Office
A family office is essentially a corporate tool designed to plan and manage investments for the preservation and transfer of family wealth. In Singapore, family offices come in two forms: Single Family Offices (SFOs) and Multi-Family Offices (MFOs). SFOs provide services exclusively to a single affluent family and are typically set up and equipped with their own professional teams to handle the specific family's affairs. MFOs, on the other hand, consolidate resources to manage the affairs of two or more unrelated families.
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Single family office
In its purest form, an SFO is a private company managing the finances of a single family. A well-functioning SFO may engage in the family's entire or partial investments, trusteeship, trusts, and estate management. Many family offices also have stewardship functions. Over time, an SFO may evolve into an MFO, often a result of the successful operation of an SFO that prompts other families to actively engage. Through the structure of an MFO, achieving economies of scale becomes easier, leading to families incorporating other families into their family office structure.
Multi family office
An MFO, or Multi-Family Office, is responsible for managing the finances of multiple unrelated families. Like an SFO, an MFO may manage the trusteeship, trusts, and estate affairs of multiple families. Some also offer stewardship services. Most family offices operate as commercial entities, selling services to other families. A few are private, providing specialized services exclusively to a select few families and are not open to others.
13O
Threshold for Application
The minimum asset under management for a family office applying for registration is 10 million SGD at the time of application, and it should increase to 20 million SGD within two years.
Increase in Minimum Standard for Investment Managers
A Singapore family office must employ at least two investment managers (who can be family members or non-family members). If there is only one investment manager at the time of application, the employment of the second investment manager can be given a grace period of one year to fulfil this requirement.
Raise in Minimum Spending Threshold for Family Office
Fund companies managed by family offices are required to incur the following annual local expenditure:
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If the assets under management are less than 50 million SGD, the annual local expenditure must reach 200,000 SGD.
If the assets under management are more than 50 million SGD but less than 100 million SGD, the annual local expenditure must reach 500,000 SGD.
If the assets under management are more than 100 million SGD, the annual local expenditure must reach 1 million SGD.
Restrictions on Fund Company Investment Scope
The new policy requires that funds managed by family offices must ensure that at least 10% of the total assets or 10 million SGD (whichever is lower) is allocated for local investments in Singapore, such as investing in:
Securities listed on the Singapore Exchange (SGX)
Specific Singapore bonds.
Funds issued by qualified local fund management companies in Singapore.
Private equity in unlisted local Singapore companies.
13U
Threshold for Application
50 million SGD
Inclusion of Non-Family Members in Investment Management Team
Under the new policy, in the 13U framework of family offices, at least one investment manager out of the three must be a non-family member. If it is not possible to hire non-family member investment managers at the time of application, a grace period of one year can be granted to fulfil this requirement.
Increase in Minimum Spending Threshold for Family Office
The new policy requires fund companies managed under the 13O framework of family offices to incur the following annual local expenditure:
If the assets under management are more than 50 million SGD but less than 100 million SGD, the annual local expenditure must reach 500,000 SGD.
If the assets under management are more than 100 million SGD, the annual local expenditure must reach 1 million SGD
Restrictions on Fund Company Investment Scope
The new policy mandates that funds managed by family offices must ensure that at least 10% of the total assets or 10 million SGD (whichever is lower) is allocated for local investments in Singapore, such as investing in:
Securities listed on the Singapore Exchange (SGX).
Specific Singapore bonds.
Funds issued by qualified local fund companies/managers in Singapore.
Equity in local entities or startups in Singapore.