Date Published: 11 November 2023
The Monetary Authority of Singapore (“MAS”) announced on 5 July 2023 that incentives for single family offices (“SFOs”) will be adjusted to encourage them to deploy capital more purposefully for the benefit of Singapore and the broader region. The enhancements will be made in five areas:
- Blended Finance Structures – MAS will encourage SFOs to participate in blended finance structures that support the region’s net zero carbon transition. In this regard, three new features will be introduced, namely, (a) broadening the scope of eligible investments to include blended finance structures; (b) increasing recognition of concessional capital; and (c) recognising grants from SFOs to support such blended finance structures.
- Climate-Related Projects – For the purpose of assessing if the SFO has met MAS’ investment requirement, MAS will recognise climate-related investments made by SFOs, not only in Singapore but anywhere in the world, in order to address global climate change issues.
- Local Investments – SFOs will be encouraged to invest in Singapore companies and the local equity market, with two enhancements to support this goal, namely, (a) expanding the scope of recognised investments to include all investments in non-listed Singapore operating companies; and (b) recognition of twice the amount invested in Singapore-listed equities as well as eligible Exchange Traded Funds and unlisted funds investing primarily in Singapore-listed equities, for the purpose of meeting investment requirements.
- Job and Value Creation – MAS will encourage SFOs’ contribution to job and value creation in Singapore through two enhancements, namely, (a) mandatory hiring of at least one non-family member investment professional; and (b) requiring SFOs to meet their business spending requirement solely from local spending, where this previously could be met with overseas spending.
- Philanthropy – Singapore will encourage SFOs to conduct philanthropic activities both locally and overseas. MAS will recognise donations to local charities alongside normal business spending. The Philanthropy Tax Incentive Scheme for family offices will also be introduced, allowing qualifying donors to claim tax deductions for overseas donations made through local intermediaries.
These tax incentive adjustments are part of MAS’ continuing efforts to support the growth of family offices in Singapore, create more jobs, channel capital into the country’s enterprises and encourage more environmental forward and charitable endeavours.
- MAS, Remarks by Mr Ravi Menon, Managing Director, MAS, at the MAS Annual Report and MAS Sustainability Report 2022/2023 Media Conference on 5 July 2023: https://www.mas.gov.sg/news/speeches/2023/mas-annual-report-and-mas-sustainability-report-2022-2023
- MAS, Philanthropy Tax Incentive Scheme for Family Offices: https://www.mas.gov.sg/schemes-and-initiatives/philanthropy-tax-incentive-scheme-for-family-offices
Disclaimer: This update is provided to you for general information and should not be relied upon as legal advice. The editor and the contributing authors do not guarantee the accuracy of the contents and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents.
Generally, a family office is an entity that assumes the day-to-day management and administration of the assets and wealth of high net worth individuals or families. Wealth preservation and growth are common objectives when establishing a family office, and clients may consider using such a vehicle to focus on the functions of investment management, tax planning, estate and succession planning, and philanthropic planning.
As clients will often enter into arrangements with professional advisors for wealth management services, we work closely with our corporate practice and funds practice to advise our clients on the structure of their family office, ensuring that such arrangements achieve our clients’ goals and are in compliance with Singapore law.
We advise both private and public (whether listed or non-listed) companies on corporate governance and compliance issues to help them acclimatise and thrive in a regulatory landscape that is becoming increasingly complex.
Besides providing general advice on director duties and corporate secretarial matters, we help our clients better appreciate the licensing and compliance regimes applicable to the industries that they operate in and review our clients’ administrative and operational procedures for consistency with industry standards.