Why is the number of family offices rising in Singapore?

Singapore has been ranked as one of the most secure and leading financial centres in the world. With its tax incentives, stable government, and strategic location, Singapore has naturally attracted many HNWIs to the country.

What should I ask myself when setting up a family office?

Before setting up a family office, you should ask yourself these questions: 1. What assets am I investing in? 2. How much risk can I take? 3. Is there any licensing requirement? 4. What tax exemptions are available?

How does a family office work?

A family office invests the individual’s or family’s assets in different places while also providing financial management services to the HNWI.

How much time will I need to set up a family office?

If all the necessary documentation is ready and signed, you will only need a few hours to register a family office as a legal entity.

How Family Offices in Singapore Can Secure HNWIs’ Legacy

Despite, or perhaps in some cases, even because of unprecedented disruption in the global economy, the high-net-worth (HNW) sector in Asia has grown by 7.9% in 2019, with China becoming home to the planet’s second-largest group of billionaires. Beyond that, the world as a whole welcomed 589 new billionaires in the same year, expanding that exclusive club by 38.9%.

With these figures in mind, it’s little surprise that HNW and ultra high-net-worth individuals (UHNWI) are looking to make firm plans for the growth and security of their holdings. The ultimate goal, of course, is to secure the intergenerational transfer of that wealth down to their children and grandchildren in years to come.

High Demand for Family Offices in Singapore

When dealing with such significant holdings belonging to one individual or family, a traditional fund manager may not be able to cater to the discerning and particular goals of a traditional fund. Hence the family office coming to the fore — a complete service for UHNWI that can take care of everything from family budgeting, to wealth transfer, to charitable donations.

Compared to the traditional use of holding companies or special purpose vehicles, family offices are simpler, more efficient, and crucially, just as confidential. There is also the ability for more direct input from the UHNW family, where the next generation of family members can be involved in the investment process, giving them vital experience in managing their own wealth for the future.

Singapore as Growing Hub for Family Offices

With the continued uncertainty of the traditional investment Asian hub of Hong Kong, Singapore has risen to be the prime choice for many UHNWI seeking security, transparency, and diversification of their interests.

The benefits of Singapore as a base for an ultra high-net-worth (UHNW) family office are clear as day; an established and renowned financial services industry, low tax rates, an extremely stable political environment, and an excellent reputation for transparency. In reality, every benefit Singapore has as a superior Asian investment hub translates into tangible benefits for a family office.

By creating a Single-Family Office (SFO) in Singapore, that family can expect to have their own dedicated staff servicing the full spectrum of financial needs, completely tailored to that family. While that team of experts are devoted to the goals of wealth growth, security, and succession, the family retains full control and privacy of all financial matters, in order to keep operations in line with their values, goals, and interests.

What to Consider When Setting up a Family Office in Singapore

When setting up a family office in Singapore, you should expect your family office provider to go over the following questions to ensure your family’s objectives are met.

What are your ultimate goals for the family office? Is your number one priority privacy? Perhaps it’s simplifying your wealth management, or ensuring your children and grandchildren have the tools and resources to live well into the future. By having a good understanding of your underlying goals, you can be sure your family office will be set up for optimal performance for your needs.
Be clear about the assets that you will be putting into your family office. Not only is this important for the utilisation of these assets, but it will also help in creating the best possible scenario for reducing the burdens of tax and legal responsibilities.
What is your appetite for risk? Will your children and grandchildren be suited to handling that risk profile if they are involved?
Find out what tax exemptions are available. A good family office will have expert tax advice on what is available to you.
What are your licencing requirements? Make sure the family office has sufficient compliance and regulatory advice to be in accordance with the Monetary Authority of Singapore (MAS).
There will be a veritable shopping list of family office services available to you — from accounting to information technology, to human resources. What can be done in-house, and what has to be outsourced?

How can SCI help you?

While the goals of a family office will vary depending on the values of that UHNW family, one thing is clear — Singapore is rapidly becoming the favoured hub for family offices in Asia.

Though the technicalities of a home office can be complex, the actual construction of a family office as a legal entity can be done in Singapore in just a few hours.

SCI’s expert team of advisors consists of accountants, bankers, and HR specialists, and are primed and ready to help you make your move to the secure shores of Singapore for your family office.

If you have any questions at all about how a family office could work for you and your family, please do contact us to see how we can help secure your future and the future of your descendants.