Setting up a Single Family Office (SFO) in Singapore is a complex yet rewarding process, offering a tailored approach to managing the assets of high-net-worth families. An SFO is a private entity designed to manage the wealth, assets, and investments of a single family, providing a range of financial, legal, and administrative services.
Step-by-Step Guide to Establishing a Single Family Office
The process of establishing an SFO in Singapore involves several critical steps, each requiring careful consideration to ensure the success of the family office.
Define the Purpose of the Family Office
The first step in setting up an SFO is to clearly define its purpose. Whether it’s for managing investments, providing legal and financial advice, or handling administrative tasks, understanding the office's objectives will help in determining the necessary staff and resources.Establish Your Family Charter
Develop a family charter that outlines the core goals and principles guiding your SFO. This charter acts like a constitution, setting the tone for how the office operates, whether it's focusing on market leadership, philanthropy, or other family values.Choose a Legal Structure
Selecting the appropriate legal structure is crucial. Options include a private limited company, partnership, or trust, each with its own set of advantages and considerations. The choice should align with the specific needs and goals of the family.Register the Family Office
Once the legal structure is determined, the next step is to register the family office with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore and obtain a business license.Hire Qualified Staff
Building a capable team is essential. The SFO will require financial advisors, lawyers, accountants, and administrative personnel. It’s important to carefully select staff who will be instrumental in the office’s success.Implement Systems and Processes
Efficient management of the family’s wealth and assets necessitates robust systems and processes. This includes financial software, accounting systems, and other tools to ensure smooth operations.Ensure Transparency and Accountability
Maintaining transparency and accountability is vital. Regular reporting to the family and compliance with relevant laws and regulations are key to the long-term success of the SFO.
By following these steps and seeking professional advice, families can establish a successful SFO in Singapore, efficiently managing their wealth and assets.
Securing Tax Exemptions for Your SFO
Once an SFO is established, families may explore creating an investment fund through the Singapore Variable Capital Company (VCC) to manage assets in a tax-efficient manner. SFOs incorporated in Singapore may qualify for the 13O (Resident Fund Scheme) tax exemptions, provided they meet the following criteria:
Licensed Singaporean Fund Manager
The VCC fund must be managed or advised by a fund management company (FMC) licensed under Singapore's Securities and Futures Act 2001.Purpose of the Family Office
The SFO must solely manage the wealth, assets, and investments of the family and not engage in unrelated business activities.Ownership of the Family Office
The SFO must be owned and controlled by family members or a trust established for the family’s benefit.Exclusive Use of the Family Office
The SFO must be used exclusively for managing the family’s wealth and assets.
Eligible SFOs may apply for 13O tax exemptions but must fulfill specific criteria, including:
Minimum AUM: S$10 million at application, with a commitment to increase to S$20 million within two years.
Local Investments: At least 10% of AUM or S$10 million (whichever is lower) must be invested locally in Singapore.
Minimum Staffing: At least two investment professionals must be employed.
Annual Business Spending: Tiered spending requirements based on AUM, ranging from S$200,000 to S$1 million.
Exploring Alternatives: Engaging Multi-Family Offices
For families seeking a less intensive and cost-effective approach, engaging a Multi-Family Office (MFO) may be an ideal alternative. MFOs manage the assets of multiple high-net-worth families and are licensed fund managers familiar with the unique needs of these families. They offer a streamlined solution, removing the need to hire and manage a dedicated team for an SFO.
MFOs can also assist in incubating an SFO or managing a family’s investment fund through Singapore’s VCC framework, providing experienced professionals to administer assets efficiently.
Why Choose Morgan Vantage Group (MVG)?
At Morgan Vantage Group (MVG), we specialize in helping high-net-worth families establish and manage their Single Family Offices with a focus on long-term success and financial security. Our global team of professionals, including experts from prominent consulting firms, governments, international organizations, and investment banks, brings unparalleled expertise in capital market advisory, fund management, and regulatory compliance.
MVG Services Include:
Comprehensive SFO Setup: From defining your family charter to registering with ACRA, MVG provides end-to-end support for establishing your family office in Singapore.
Tax Efficiency Strategies: We help you navigate the complexities of tax exemptions under the 13O scheme, ensuring your SFO operates in the most tax-efficient manner.
Multi-Family Office Solutions: For those preferring a streamlined approach, MVG offers MFO services that provide expert management without the need for a dedicated SFO.
Get Started with MVG Today
If you’re looking to establish a Single Family Office or explore Multi-Family Office services, Morgan Vantage Group is here to guide you every step of the way. Contact us at info@mvgtrust.com to connect with our team and learn more about how we can support your family’s financial goals.
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