A single family office (SFO) setting up in Singapore faces two separate MAS questions that are easy to confuse. The first is regulatory: may the SFO manage the family’s money without a capital markets services licence? For a qualifying SFO the answer comes from MAS’s class exemption, which needs no approval, only a notification. The second is tax: will the family’s fund vehicle be exempt on its investment income under section 13O or 13U of the Income Tax Act 1947? That needs an application to MAS and an award with conditions. Passing one test says nothing about the other.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
Why do founders mix up the two questions?
Both questions involve MAS, both use the words “family office” and both are usually raised in the same first meeting with advisers. Families also hear about them as a package: “set up an SFO and get 13O”. In law, however, they come from different statutes and test different things.
- The licensing question arises under the Securities and Futures Act 2001. Fund management is a regulated activity, so a company that manages assets needs a capital markets services licence unless an exemption applies. It is a question about the manager: the SFO company.
- The tax question arises under the Income Tax Act 1947. Sections 13O and 13U exempt specified income of an approved fund from tax. It is a question about the fund vehicle: the company or VCC that holds the family’s investments.
A typical structure therefore has two entities facing two different tests.
Question one: does the SFO need a licence?
Since 15 June 2026, MAS has applied a revised, structure-agnostic licensing exemption for SFOs. According to MAS’s FAQs on the licensing exemption framework for single family offices, the conditions are set out in paragraph 5(1)(ba) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations. In summary, the SFO must:
- manage assets only for family members (including family trusts and wholly owned family companies), charities funded exclusively by the family, and certain key employees;
- be funded only by the same family, directly or indirectly, with non-family key employees allowed a non-controlling stake of up to 10%;
- be incorporated in Singapore; and
- ensure that the SFO and the investment vehicles it manages each keep a bank account with a MAS-licensed bank (foreign-incorporated vehicles may instead use a regulated bank in a jurisdiction meeting FATF-consistent standards).
There is no application and no approval. A new SFO files a Notice of Commencement of Business with MAS within 14 days of starting operations in Singapore, and receives a system-generated acknowledgement. MAS states that no legal opinion is required with the notification, but the SFO must be sure it meets every condition before filing. It then files an annual return within four months of each financial year end. MAS has also said it will generally not grant case-by-case exemptions to SFOs that fall outside these conditions, and that it does not intend to license SFOs that manage only family assets.
If your SFO was already operating before 15 June 2026, the timetable is different. Our guide to the 15 June 2027 transition deadline for existing SFOs covers that situation. This article focuses on families setting up now.
Question two: will the fund be tax exempt?
The tax incentive is optional. A family can run a fully lawful SFO without ever applying for 13O or 13U. If it does apply, the fund vehicle seeks an award from MAS, and the award comes with economic conditions. The current terms are in MAS Circular FDD Cir 05/2026 dated 31 July 2026, and MAS summarises them on its fund tax schemes for family offices page. For SFO funds, the headline conditions include:
- minimum assets under management in designated investments of S$20 million for 13O, or S$50 million for 13U, at application and at the end of each basis period;
- qualifying investment professionals employed by the SFO: two for 13O and three for 13U, at least one of whom is not a family member, who must be Singapore tax residents earning more than S$3,500 a month;
- a minimum level of local business spending, tiered by fund size, starting at S$200,000 a year for funds under S$250 million;
- a capital deployment requirement to invest the lower of 10% of AUM or S$10 million in qualifying Singapore-linked investments; and
- a private banking account with a MAS-licensed institution.
Once awarded, the fund must confirm each year that it met the conditions. Our guide to what happens when a 13O or 13U fund misses an annual condition explains the consequences.
How do the two questions compare side by side?
| Point | Licensing exemption | 13O or 13U tax incentive |
|---|---|---|
| What it answers | May the SFO manage family money without a licence? | Is the fund’s specified investment income exempt from tax? |
| Law | Securities and Futures Act 2001 and its regulations | Income Tax Act 1947, sections 13O and 13U |
| Which entity | The SFO (the manager) | The fund vehicle (company or VCC) |
| Process | Notification to MAS; no approval | Application to MAS; award with conditions |
| Timing | Within 14 days of starting operations | When the fund is ready to meet the entry conditions |
| AUM threshold | None | S$20 million (13O) or S$50 million (13U) |
| Staffing | No headcount condition | Qualifying investment professionals |
| Ongoing filing | Annual return within four months of year end | Annual declaration of conditions |
| Optional? | Needed if the SFO manages assets in Singapore without a licence | Yes; the family chooses whether to apply |
What if you get one but not the other?
Exempt from licensing, no tax award. This is a perfectly lawful position. The SFO can operate, but the fund’s income is taxed under the ordinary rules unless another exemption applies. Some families start this way because their AUM or team is not yet large enough for 13O, and apply later.
Tax award, but the SFO does not meet the licensing conditions. This is the dangerous combination. The SFO fund conditions require the fund to be managed or advised directly by an SFO in Singapore, and that SFO must itself be operating lawfully. A tax award does not cure a licensing problem. If, for example, the SFO starts managing a friend’s money, it may fall outside the exemption entirely; our article on a family office asked to manage a friend’s portfolio discusses that boundary. Take regulatory advice before the position drifts.
Neither. If the SFO cannot meet the class exemption conditions, MAS has indicated it will generally not grant individual exemptions, so the family would need to restructure the arrangement or use a licensed manager.
In what order should a new family office deal with them?
- Map the money. List whose assets will be managed and who is funding the SFO. If anyone outside the family (other than permitted key employees) is involved, stop and get advice first.
- Choose the structure. Decide on the SFO company and the fund vehicle. Our comparison of a VCC or private company as the fund vehicle covers that choice, which is separate from both MAS questions.
- Incorporate and open bank accounts. MAS’s FAQs note that the notification asks for bank account details of the SFO and its investment vehicles, so the accounts should be open before filing.
- File the Notice of Commencement of Business within 14 days of starting operations, with the signed declaration.
- Decide whether to apply for 13O or 13U. Check AUM in designated investments, hiring of investment professionals and the local spending budget before applying.
- Diarise both annual filings. The SFO’s annual return and the fund’s annual declaration run on separate tracks.
Which documents does each process need?
| Licensing notification (SFO) | Tax incentive application (fund) |
|---|---|
| SFO’s Singapore incorporation details | Fund vehicle’s constitution and incorporation documents |
| Bank account details for the SFO and each investment vehicle | Evidence of AUM in designated investments |
| Declaration signed by the family member providing the assets and an SFO director (one signature if the same person) | Details of the investment professionals and their employment by the SFO |
| Family tree and funding map showing the assets come from one family | Business spending plan and capital deployment plan |
| Records supporting each condition, kept for the annual return | Banking account with a MAS-licensed institution |
MAS’s FAQs say a service provider may file the notification and annual returns using its own Corppass, but it cannot sign the declaration on the SFO’s behalf. The family member and director remain responsible for what is declared.
Where do immigration and the VCC decision fit?
Neither MAS question gives anyone the right to live or work in Singapore. Work passes for the family’s staff are decided by MOM, and the Global Investor Programme is administered by EDB. The link is practical: the 13O and 13U conditions require investment professionals who are Singapore tax residents, so hiring and work pass planning affect whether the tax conditions can be met. Our guide to meeting the investment professional headcount while holding ONE Pass or GIP looks at that overlap.
Example: a foreign family setting up from scratch
Example: A family based overseas plans to move S$30 million into Singapore. They incorporate an SFO company and a private company as the fund, open Singapore bank accounts for both, and start operations in February. Within 14 days they file the Notice of Commencement of Business, with the declaration signed by the patriarch, who is also a director. That settles the licensing question. They have only one investment professional so far, so they hold off on 13O. In the meantime the fund’s income is taxed under ordinary rules. Once a second investment professional who is not a family member joins and the spending plan is in place, they apply for 13O. Their adviser keeps two calendars: the SFO’s annual return and the fund’s annual declaration.
Frequently asked questions
Does MAS approve our SFO before we start?
No. Under the current framework, a qualifying SFO notifies MAS within 14 days of starting operations and receives an automated acknowledgement. There is no approval step, which is why the family must check the conditions carefully itself.
Does getting a 13O award mean our SFO is properly exempt from licensing?
No. The tax award concerns the fund vehicle’s income. The SFO’s licensing position depends on meeting the class exemption conditions and filing the notification.
Is there an AUM minimum for the licensing exemption?
No AUM threshold applies to the licensing exemption itself. AUM minimums apply only to the 13O and 13U tax schemes.
Do we need to tell MAS when our shareholding changes?
MAS’s FAQs say the licensing framework does not require SFOs to update MAS on changes to shareholding or operational arrangements, but the tax incentive schemes have their own notification requirements under the award terms. Check both.
Need help with your family office’s MAS filings?
If you are setting up a single family office, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133. We can incorporate the SFO and fund entities, maintain registers and corporate records, keep the accounts and records that support the annual return and annual declaration, and track both filing calendars. Where you need regulatory advice on the licensing exemption or the tax incentive conditions, we can coordinate with regulatory advisers and law firms on our panel. Raffles Corporate Services is not licensed by MAS, and this article is general information, not legal or tax advice.
The Raffles Corporate Services Editorial Team, Raffles Corporate Services