Every year, a handful of Singapore-based wealth management outfits, multi-family offices and specialist administrators discover the hard way that “we help families manage trusts” is not the same thing as “we are licensed to carry on trust business.” The Trust Companies Act 2005 (TCA) is the piece of legislation the Monetary Authority of Singapore (MAS) uses to draw that line, and it draws it firmly: carrying on trust business in or from Singapore without a licence, or without qualifying for an exemption, is a criminal offence, not a compliance footnote.
Because the TCA sits in the shadow of better-known regimes like the Securities and Futures Act and the Financial Advisers Act, it gets far less public commentary — which means the mistakes that sink applications tend to repeat themselves year after year. This article continues our chapter-explainer series on Singapore’s licensing statutes, following the same format we used for the Companies Act 1967, the Securities and Futures Act, and the Financial Advisers Act.
Below, we walk through what the TCA actually regulates, the key sections that matter to an applicant, the financial and personnel requirements MAS applies, and the recurring mistakes that lead to rejected or delayed trust business licence applications.
What the Trust Companies Act Actually Regulates
The Trust Companies Act 2005 is “an Act to provide for the licensing and regulation of trust companies.” Section 3 sets out the core restriction: a person must not carry on, or hold itself out as carrying on, any trust business in or from within Singapore unless it is a licensed trust company. “Trust business” is defined by reference to the First Schedule and broadly covers creating express trusts, acting as trustee, arranging for someone else to act as trustee, and providing trust administration services.
Contravening section 3 is not a slap on the wrist: it carries a fine of up to $75,000, imprisonment of up to three years, or both, with a further daily fine of up to $7,500 for a continuing offence. Structures that quietly drift from “family office administration” into unlicensed trust business are exactly the kind of exposure we flag when reviewing Singapore trust structures for HNW families.
Part 2: Licensing of Trust Companies — The Chapter That Matters Most
Part 2 of the Act (sections 3 to 15) is the chapter every applicant needs to understand before submitting a single form.
Application for a Trust Business Licence (Section 4)
Applications are made to MAS using Form 1 under the Trust Companies Regulations, accompanied by a non-refundable application fee of $1,000. MAS can require any further information or documents it considers necessary — and in our experience, incomplete responses at this stage are the single biggest cause of processing delay.
Grounds MAS Can Refuse Your Application (Section 5)
Section 5(1) restricts the grant of a licence to a company incorporated under the Companies Act 1967, or a foreign company registered under Division 2 of Part 11 of the Companies Act. Beyond that basic eligibility filter, section 5(3) gives MAS a long list of discretionary refusal grounds, including where the applicant:
| Refusal Ground (s.5(3)) | What It Covers |
|---|---|
| Incomplete or missing information | Failure to provide information MAS requires about the applicant or associated persons |
| False or misleading information | Any document provided to MAS that is inaccurate |
| Winding up or dissolution | Applicant or substantial shareholder in the course of being wound up, in Singapore or elsewhere |
| Unsatisfied judgment debt | An enforcement order against the applicant or a substantial shareholder returned unsatisfied in whole or part |
| Receivership or judicial management | A receiver, receiver and manager, or judicial manager appointed over the applicant or its substantial shareholder |
| Compromise or scheme of arrangement | An unresolved arrangement with creditors still in operation |
| Fraud-related convictions | Convictions of the applicant, substantial shareholder or an officer involving fraud or dishonesty |
Resident Managers and Fit-and-Proper Directors (Section 13)
Section 13 requires MAS approval of a licensed trust company’s resident managers and directors. In practice, MAS expects a minimum of two resident managers, at least one with five or more years of relevant experience and the others with at least three years, all assessed against the fit and proper criteria in the Trust Companies Regulations. Applicants regularly under-resource this requirement, nominating a single experienced individual and one junior hire, which does not satisfy the two-resident-manager expectation.
Exempt Persons (Section 15)
Not everyone providing trust-related services needs a full licence. Section 15 exempts banks and merchant banks licensed under the Banking Act (for specified trust services), holders of a capital markets services licence providing fund management or custodial services, and — critically for family offices — “any other person” whom MAS agrees to exempt on application under section 15(1)(e). This is the route most private trust companies use, and it is frequently confused with automatic exemption. It is not automatic: it requires a written application and MAS’s written notice of exemption. We cover the private trust company route in detail in our PTC setup common mistakes and rejection reasons guide.
Financial and Ongoing Requirements
| Requirement | Detail |
|---|---|
| Minimum paid-up capital / qualifying assets | S$250,000, maintained on an ongoing basis as minimum net asset value |
| Application fee | S$1,000, non-refundable, payable on submission of Form 1 |
| Annual fee | S$4,000 for a licensed trust company |
| Resident managers | Minimum 2; one with 5+ years’ relevant experience, others with 3+ years |
| Professional indemnity insurance | Required, commensurate with the level of risk of the trust business |
| Typical processing time | Up to 6 months for a straightforward, complete application; longer for complex cases |
Common Mistakes That Trigger Rejection or Delay
- Applying through the wrong entity type. Individuals, unincorporated partnerships, or foreign entities not registered as a Companies Act foreign company cannot be granted a licence under section 5(1).
- Under-resourcing the resident manager bench. One senior hire and a junior support staff member does not meet MAS’s expectation of at least two resident managers meeting the experience thresholds.
- Submitting Form 1 with gaps. Missing beneficial ownership, group structure, or business plan detail is treated by MAS as a section 5(3)(a) deficiency and stalls the six-month processing clock rather than speeding it up.
- Overlooking shareholder financial history. Undisclosed winding-up proceedings, unsatisfied judgments, or receivership involving a substantial shareholder — even in a foreign jurisdiction — are refusal grounds under section 5(3)(c) to (e).
- Confusing the PTC exemption with “no MAS involvement.” The section 15(1)(e) exemption still requires a formal written application, ongoing adherence to the connected-persons boundary, and can be revoked if the structure drifts into servicing unconnected settlors.
- Under-capitalising the business plan. Projections that assume growth well beyond what the $250,000 minimum net asset value and PII cover can sustain invite closer MAS scrutiny of the whole application.
- Weak internal compliance systems. MAS explicitly assesses the strength of an applicant’s compliance function as part of admission criteria — a policy manual copied from an unrelated financial institution rarely survives review.
Licensed Trust Company vs Exemption: Which Route Fits?
| Route | Best Suited To | Key Trade-Off |
|---|---|---|
| Full trust business licence (s.4-5) | Firms offering trust services to unrelated third-party clients | Full capital, resident manager and compliance requirements |
| Bank / merchant bank exemption (s.15(1)(a)-(b)) | Banks already licensed under the Banking Act | Limited to procedural, non-discretionary trust administration |
| CMS licensee exemption (s.15(1)(c)) | Fund managers providing custodial or fund management-linked trust services | Scope tied strictly to fund management/custodial activity |
| Individual MAS exemption / PTC (s.15(1)(e)) | Single or private family offices acting as trustee for a connected family’s own trusts | Must stay within the connected-persons boundary or risk losing exempt status |
Where This Fits in Singapore’s Wider Licensing Landscape
The TCA rarely operates in isolation. Family offices structuring around a licensed or exempt trust company often also need to consider business trust structures, MAS’s fit-and-proper and AML/CFT expectations that run across all its licensing regimes, and the corporate secretarial obligations that apply to the underlying Companies Act entity regardless of its MAS licensing status. If your structure also touches capital markets or financial advisory activity, our chapter explainers on the Securities and Futures Act and Financial Advisers Act cover the parallel licensing tracks in the same level of statutory detail as this article.
Getting Your Application Right the First Time
A rejected or stalled trust business licence application costs more than the $1,000 fee — it costs months of runway and, often, the confidence of the family or institutional clients you were trying to onboard. Whether you are pursuing a full trust business licence, structuring a private trust company under the section 15 exemption, or simply need the underlying Singapore corporate vehicle set up correctly before you approach MAS, getting the statutory detail right from the outset matters.
Raffles Corporate Services supports family offices and trust structures through the corporate secretarial and compliance groundwork that sits alongside a Trust Companies Act application or exemption request.
— The Editorial Team, Raffles Corporate Services