With the growth of wealth in Asia over the last several decades, many wealthy families are now considering transferring their assets to the next generation. However, there is still a significant lack of planning in how to do it successfully at this moment.
Singapore, being one of Asia’s most renowned financial centers, has jumped on this trend and has introduced a number of appealing measures to entice wealthy families to use it as a base to manage their assets by boosting the family office sector in Singapore. Kaiyy Immigration offers a variety of resources and frameworks that enable families to utilize these regulations to guarantee tax compliance and effective wealth management.
Singapore’s government has granted tax exemptions for assets handled by family offices. As a result, practically all investment profits made by assets handled by family offices will be exempt from Singapore income tax. The following are the supporting guidelines:
1. Onshore Fund Tax Incentive Scheme (13O)
2. Enhanced-Tier Fund Tax Incentive Scheme (13U)
3. Global Investor Program Family Office Option (GIP-FO)
The Monetary Authority of Singapore (MAS) manages the 13O and 13U schemes under the Singapore Income Tax Act (SITA). Qualified applicants will be given employment passes (EP) as well as tax exemptions on specified revenue earned by an authorized company/person from funds managed by a Singapore-based fund manager.
| 130 | 13U | |
|---|---|---|
|
Fund's Residence
|
Singapore Tax Resident
|
No Restrctions
|
|
Fund's Manager
|
Singapore based with a Capital Markets Services (CMS) License
|
|
|
Investors |
Cannot be 100% owned by Singaporean
|
No restrictions
|
|
Asset Under Management (AUM) |
Minimum S$10million |
Minimum S$50million |
|
Fund Expenditure |
Minimum S$200K business spending in a year |
Minimum S$500K Local business spending in a year |
|
Approving Authority |
MAS approval required |
|
|
Reporting Requirements |
Annual reporting to investors |
No reporting required |
|
Income Tax Filing |
Annual Tax returns to IRAS |
|
|
No. of EP granted |
1 |
3 |
Additionally, the 13O and 13U schemes have been recognized as part of the Variable Capital Companies (VCCs) program, which was established by the MAS to promote Singapore as a regional domiciliation centre.
VCCs provide more structural and functional versatility. It enables the creation of a master umbrella framework with several sub funds beneath it.
Enables for share payouts from NAV and dividend distributions from capital VCC shareholders registration will not be made public, providing investors with discretion.
Along with the 13O and 13U schemes, Singapore’s Economic Development Board (EDB) also launched the Global Investor Program (GIP). This program also enables tax-free investments and the chance of acquiring permanent residency in Singapore. The GIP program includes a special option for family offices: invest at least S$2.5 million (paid up capital) in a Singapore-based Single Family Office with an AUM more than S$200 million. Investors must have the following qualifications to invest under this option:
– Personal or immediate family net worth of over S$400 million and;
– Minimally 5 years of entrepreneurship, investment or managerial track record
In addition, investors must provide a 5-year business plan covering targeted employment and yearly financial expenditures. It should also identify its family office’s functions, planned investment sectors, asset categories, and regional focus.
Singapore has clearly recognized the rising demand for such programs and schemes among wealthy Asian families. As a result, they are making full use of this chance to bring in new investors to Singapore. Kaiyy Immigration is well knowledged to advise and provide assistance to clients who wish to pursue the aforementioned possibilities. These attractive policies, along with Singapore’s favorable economic environment, provide a win-win situation for all involved parties.
