Family Offices and Their Evolution

Family offices have undergone significant transformation in recent years, evolving beyond mere wealth preservation and succession planning to offer a diverse range of integrated services. These services include tailored governance solutions and access to exclusive networks, positioning family offices as formidable competitors to traditional wealth management firms. With the rise of high-net-worth individuals and families across Asia, Singapore has emerged as the jurisdiction of choice for establishing family offices.

Singapore as a Family Office Hub

Singapore has solidified its status as a key hub for family offices, attracting an increasing number of them due to favorable conditions for wealth management. According to the Monetary Authority of Singapore (MAS), the number of Single Family Offices (SFOs) has surged from 700 in 2021 to approximately 1,400 in 2024, driven by the appeal of tax incentives and government initiatives. This growth underscores Singapore’s attractiveness as a destination for wealth management and family office setup.

(source: EDB Singapore)

Reasons to Choose Singapore for Family Offices

Stable Political and Regulatory Environment

Singapore is renowned globally as a business-friendly destination, offering a stable socio-political environment, a free market economy, and an attractive tax regime. Its transparent business and regulatory landscape simplifies the market research process for international investors, allowing for seamless entry. This stability is crucial for family offices looking to manage and grow their assets effectively.

Furthermore, Singapore serves as a strategic hub for the holding and management of regional assets. With over 37,000 international companies and 7,000 multinational corporations headquartered in the city-state, it provides a stable platform for investors to navigate the more speculative markets in Asia.

(source: ASEAN Briefing)

Connectivity to the World

Geographically positioned within a six-hour flight radius of most Southeast Asian countries, Singapore is poised to become one of the world’s leading economic centers by 2030. Changi Airport, Singapore’s main international airport, services over 100 airlines flying to more than 400 cities across 100 countries. With a passenger capacity of 85 million annually and plans for a new Terminal 5 to add 50 million more, Singapore’s connectivity is unparalleled.

In addition to logistical advantages, Singaporeans share cultural and linguistic ties with many ASEAN nations, facilitating smoother interactions and business negotiations. English, being the primary working language, further enhances communication, making Singapore an ideal base for family offices targeting investments across Asia.

(source: ASEAN Briefing)

Quality of Life

Singapore consistently ranks as one of the best places to live in Asia, boasting a high quality of life and a robust healthcare system. The country is recognized for its top-tier education system, which benefits the next generation of family office members. Additionally, Singapore’s efficient commuting system enhances daily life for residents, contributing to its appeal as a family office hub.

(source: EDB Singapore)

The Role of Government Initiatives

Recognizing the importance of family offices in the economy, MAS and the Singapore Economic Development Board (EDB) established the Family Office Development Team (FODT) in 2019. This initiative aims to enhance Singapore’s standing as a premier family office hub by leading efforts to attract and support these entities. Recent government initiatives have focused on promoting sustainable and impactful family office operations within the local economy.

Recent Changes to Regulations

In July 2023, the Singapore government implemented stricter conditions under the S13O and S13U schemes, including minimum assets under management (AUM) requirements and enhanced employment criteria. These regulatory adjustments are designed to ensure that family offices significantly contribute to the local economy and create quality job opportunities. While these changes may pose challenges for some family offices, they also present an opportunity to strengthen the overall framework and sustainability of the sector.

(source: Monetary Authority of Singapore (MAS))

(source: Dentons Rodyk)

Conclusion

As the family office landscape continues to evolve, Singapore stands out as an attractive destination for high-net-worth individuals seeking to establish their family offices. With its stable political environment, exceptional connectivity, high quality of life, and supportive government initiatives, Singapore offers a unique combination of advantages that few other jurisdictions can match.

Looking ahead, the future of family offices in Singapore appears promising, bolstered by a proactive regulatory environment and a growing network of resources and support. For those considering establishing a family office, Singapore undoubtedly represents a compelling choice.