Singapore has cemented its position as Asia’s leading wealth management hub, with the number of single family offices growing from around 400 in 2020 to more than 2,000 by 2025. If you are a high net worth family considering Singapore as the base for your wealth structure, you are looking at one of the most sophisticated regulatory environments in the world, but also one of the most demanding. This guide walks through everything you need to know: the tax incentive schemes (Section 13O and Section 13U), MAS licensing exemptions, the corporate setup, the costs, the timeline, and the common mistakes families make.
A family office is a private wealth management entity that manages the assets, investments, and affairs of a single wealthy family (Single Family Office, or SFO) or multiple families (Multi-Family Office, or MFO). In Singapore, most family office structures are set up to enjoy the tax incentives under Sections 13O and 13U of the Income Tax Act 1947, which grant exemption on qualifying investment income for approved fund vehicles.
What Is a Family Office in the Singapore Context?
In Singapore parlance, “family office” typically refers to a structure comprising a Fund Vehicle (usually a Singapore private limited company, VCC sub-fund, or Cayman company) that holds the family’s investable assets, a Fund Management Company (a Singapore private limited company) that manages the fund vehicle, and optionally a Holding Vehicle at the top for governance and succession purposes.
The fund management company acts as the family office and is the entity that engages investment analysts, portfolio managers, and family office professionals. It is licensed or exempted by the Monetary Authority of Singapore (MAS).
Section 13O vs Section 13U: Choosing Your Tax Incentive
The two flagship tax incentive schemes for family offices in Singapore are the Onshore Fund Tax Incentive Scheme (Section 13O) and the Enhanced-Tier Fund Tax Incentive Scheme (Section 13U). Both grant tax exemption on specified income from designated investments, but the eligibility bars are different.
Section 13O: Onshore Fund Tax Incentive Scheme
Section 13O is designed for smaller family office structures. Key requirements as at 2026:
- Minimum Fund Size: S$20 million in Assets Under Management (AUM) at the point of application, to be increased to S$50 million within two years.
- Local Investments: The fund must invest at least 10% of AUM or S$10 million (whichever is lower) in local investments (Singapore-listed equities, qualifying debt securities, unlisted funds distributing in Singapore, or investments in Singapore-based non-listed operating companies).
- Business Spending: Minimum local business spending of S$200,000 per financial year.
- Investment Professionals: At least two investment professionals (rising to three within two years), at least one of whom must be a non-family member.
- Fund Vehicle: Must be a Singapore-incorporated company or VCC.
Section 13U: Enhanced-Tier Fund Tax Incentive Scheme
Section 13U is targeted at larger family offices. Key requirements:
- Minimum Fund Size: S$50 million in AUM.
- Local Investments: Same 10%/S$10 million test as Section 13O.
- Business Spending: Tiered by AUM. S$500,000 for funds of S$50m to S$100m; S$1,000,000 for S$100m to S$1bn; and S$1,500,000 for AUM above S$1bn.
- Investment Professionals: At least three, one of whom must be a non-family member.
- Fund Vehicle: Can be Singapore-incorporated, Singapore VCC, or a foreign fund vehicle (offering flexibility for pre-existing offshore structures).
The core trade-off is straightforward. Section 13O has a lower AUM threshold and lower business spending requirement, but is Singapore-fund-vehicle-only. Section 13U demands more but permits offshore fund vehicles and offers greater flexibility.
MAS Licensing: Do You Need a Capital Markets Services Licence?
The default position under the Securities and Futures Act is that fund management activities require a Capital Markets Services (CMS) licence. Family offices, however, typically rely on the Single Family Office (SFO) exemption from licensing.
The exemption applies where the fund management company manages funds for its own related corporations. Where all beneficial owners of the fund are family members within the meaning of MAS guidelines (up to five generations from a common ancestor), the SFO can operate without a CMS licence. Since 2023, MAS has required SFOs relying on the Section 13O or Section 13U exemption to obtain a Class Licence Exemption via a formal notification to MAS at the point of application.
If your structure serves multiple unrelated families (a Multi-Family Office), you will need a full CMS licence for Fund Management or, at minimum, a Registered Fund Management Company (RFMC) status. The RFMC framework was replaced by a streamlined Licensed Fund Management Company (LFMC) framework in 2024, so speak to a licensed corporate service provider about the current pathway.
Step-by-Step: How to Set Up a Family Office in Singapore
Below is the standard sequence we walk clients through:
Step 1 – Structuring and Governance Design (Weeks 1-4)
Before any incorporation, the family sits down with their advisers (legal, tax, corporate services) to decide on the entities, jurisdictions, and governance principles. Key questions include: Do we want a VCC or a plain private limited company? Do we need a Private Trust Company on top? Who are the settlors and beneficiaries? What is our long-term relocation plan?
Step 2 – Incorporate the Fund Management Company and Fund Vehicle (Weeks 4-6)
Both entities are incorporated in Singapore. The fund management company must have at least one Singapore-resident director. If the family principals are not yet resident, a nominee resident director is engaged in the interim. Registered office, corporate secretary, and initial constitution are all put in place.
Step 3 – Section 13O or 13U Application to MAS (Weeks 6-16)
The application to MAS for the Section 13O or 13U tax incentive is the critical path. It comprises a detailed business plan, an investment mandate, KYC on the family members, a professional profile of the investment team, a projection of AUM growth and local business spending, and an SFO exemption notification. Processing typically takes 3-6 months, though complex family structures can take longer.
Step 4 – Employment Passes for Investment Professionals (Weeks 8-12)
Concurrently, Employment Pass (EP) applications are filed for the family principals and the non-family investment professionals. From September 2023, EP applicants must pass the COMPASS framework, so the fund management company must be set up correctly to score well on the diversity criterion.
Step 5 – Open Bank Accounts and Custody (Weeks 6-14)
Private banking relationships take time. Most families pre-select their private bank and start onboarding in parallel with the MAS application. Singapore banks are generally cautious with fund management company accounts and want to see the MAS approval letter in hand before opening the fund vehicle account.
Step 6 – Fund the Vehicle and Commence Operations (Weeks 16-24)
Once the MAS letter is issued, capital is transferred into the fund vehicle. The fund management company commences its investment activities, ensuring at least 10% or S$10 million of AUM is deployed into local investments within the required timeframe.
Costs: A Realistic Budget for Setting Up and Running a Family Office
Below is an indicative budget for a mid-sized family office structure (~S$50m AUM). Actual costs vary based on complexity, professional appointees, and premises.
| Cost item | One-off (S$) | Annual (S$) |
|---|---|---|
| Incorporation of FMC + Fund Vehicle | 5,000 – 15,000 | – |
| MAS Section 13O/13U application and legal advisory | 60,000 – 150,000 | – |
| Corporate secretarial and compliance | – | 8,000 – 20,000 |
| Bookkeeping, accounting, tax filing (both entities) | – | 25,000 – 60,000 |
| Fund audit | – | 15,000 – 40,000 |
| Investment professional salaries (2-3 pax) | – | 500,000 – 1,200,000 |
| Office rental (CBD, 500-1500 sq ft) | – | 60,000 – 250,000 |
| Bank charges and custody fees | – | 15,000 – 80,000 |
Plan for total year-one cost of S$700,000 to S$1.8 million, depending on scale and headcount. A Section 13U structure with S$100m+ AUM typically runs S$1.5-3m annually all in.
Timeline Summary: How Long Does It Take?
| Phase | Duration |
|---|---|
| Structuring and design | 4 weeks |
| Incorporation of entities | 1-2 weeks |
| MAS Section 13O/13U approval | 3-6 months |
| EP approvals for family principals | 2-3 months |
| Bank account opening (private banking) | 2-4 months |
| Total end-to-end | 6-9 months |
Common Mistakes Families Make
Even sophisticated families trip up on the same issues repeatedly. The most frequent:
- Underestimating local business spending. Section 13O and 13U require ongoing minimum local expenditure. Families who plan bare-bones offices often fall short in year two once the honeymoon setup costs disappear.
- Not hiring the non-family investment professional early enough. The rule requires a non-family investment professional. Families sometimes assume that in-laws or distant cousins qualify. The MAS definition is strict.
- Skipping the tax incentive application to save time. Without Section 13O/13U approval, investment gains and dividends flowing to the fund vehicle may be subject to Singapore corporate tax at 17%. That is a permanent structural tax leakage.
- Choosing the wrong vehicle for the family’s needs. A Singapore private limited company versus a VCC versus a Cayman entity has significant implications for tax residency, redomiciliation flexibility, and reporting under FATCA/CRS.
- Neglecting succession planning. The family office is the family’s balance sheet for the next 100 years. Constitutions, shareholders’ agreements, family charters, and PTC structures all need to be built up front.
Related Reading
- Single vs Multi-Family Office in Singapore
- How to File Your ACRA Annual Return
- Statutory Registers Every Singapore Company Must Maintain
- Singapore Corporate Tax 2026 Complete Guide
Conclusion
Setting up a family office in Singapore is a substantial undertaking. The tax incentives are generous, the regulatory environment is robust, and the ecosystem of professionals is world-class. However, the initial and ongoing compliance requirements are demanding, and mis-steps at the setup stage compound into meaningful costs over the years. Engage experienced advisers early, plan the structure holistically, and treat the MAS application as the critical path. Done well, a Singapore family office is a durable, tax-efficient foundation for multi-generational wealth stewardship.
— The Editorial Team, Raffles Corporate Services