To akkWith effect from 18 April 2022, funds that are managed and / or advised directly by a family office which is:-
- An exempt fund management company which manages assets for or on behalf of the family(ies); and
- Is wholly owned or controlled by members of the same family(ies),
must meet, in addition to the current requirements outlined in the relevant Monetary Authority of Singapore’s circulars and Singapore Income Tax legislation for the Section 13O (Resident Fund tax exemption scheme) / Section 13U (Enhanced-Tier Fund tax exemption scheme), the following conditions:-
| Section 13O | Section 13U | |
| Minimum Asset Under Management (“AUM”) | a) The fund has a minimum fund size of S$10million at the point of application.
b) The fund commits to increasing its AUM to S$20million within a 2-year grace period. |
a) The fund has a minimum fund size of S$50million at the point of application. |
| Section 13O | Section 13U | |
| Investment Professionals (“IPs”) | a) The fund is managed or advised directly throughout each basis period relating to any year of assessment by a family office in Singapore, where the family office employs at least two IPs.
b) In the event that the family office is unable to employ two IPs by the point of application, the fund would be given a one-year grace period to employ the second IP. |
a) The fund is managed or advised directly throughout each basis period relating to any year of assessment by a family office in Singapore, where the family office employs at least three IPs with at least one IP being a non-family member.
b) In the event that the family office is unable to employ one non-family member as an IP by the point of application, the fund would be given a one-year grace period to do so. |
| Business Spending | a) The fund will incur at least S$200,000 in total business spending in each basis period relating to any year of assessment, subject to the tiered business spending framework as set out below. | a) The fund will incur at least S$500,000 in local business spending in each basis period relating to any year of assessment, subject to the tiered business spending framework that is set out below.
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| Local Investment | The fund managed by the family office will invest at least 10% of its AUM or S$10million, whichever is lower, in local investment at any one point in time.
In the event that the fund is unable to invest at least 10% of its AUM or S$10million, whichever is lower, in local investments by the point of application, the fund would be given a one-year grace period to do so. |
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Tiered business spending framework
| Minimum Total Business Spending | Minimum Local Business Spending | |
| AUM Range | 13O | 13U |
| AUM below S$50million | S$200,000 | S$500,000 |
| AUM more than or equal to S$50million but less than S$100million | S$500,000 | |
| AUM more than or equal to S$100million | S$1million | |
In what appears to be a set of additional stringent requirements being introduced, it is however, not inconceivable as the country continues to experience and enjoy a proliferation of family office structures being setup. The additional requirements are introduced to, amongst others, direct more foreign capital into Singapore, further spur the hiring of investment professionals (creating more jobs) and to extend a helping hand to local companies in need of funding. All of which serve a broader policy intent of the current Government and we expect to see players in the family office eco-system to work even closer in helping families / individuals to meet the additional requirements.
Our asset management and private wealth tax team is committed to assist individuals and families alike in helping you achieve your family office aspirations and is here to help you in assuaging the tedium of this application process. Come talk to us today!
Contact Our Asset Management and Private Wealth Tax Specialists for A Discussion
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Edwin Leow Director, Head of Tax edwinleow@sg.cla-ts.com |
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Shaun Zheng Director, Private Wealth and Asset Management Tax Lead shaunzheng@sg.cla-ts.com |
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Zhao Peixi Assistant Manager, Tax peixizhao@sg.cla-ts.com |
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Jasmine Lee Assistant Manager, Tax jasminelee@sg.cla-ts.com |
