Singapore, often called the “Switzerland of Asia,” has cemented its position as a global wealth hub, attracting family offices with tax incentives and a stable financial ecosystem. As of November 2024, the number of Single-Family Offices (SFOs) in the city-state has surpassed 1,600, driven by government support and favorable policies.
However, recent corruption scandals have prompted regulators to strengthen oversight. The Monetary Authority of Singapore (MAS) introduced a new framework last November, aiming to enhance transparency and compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.
Key Changes Under the New SFO Framework
Previously, SFOs operated under exemptions that weren’t tailored to their unique structures. Under the new framework, key updates include:
- Ownership Structure: SFOs must be entirely family-owned, though executives like CEOs, CFOs, and investment professionals can hold up to a 10% non-controlling stake.
- Fund Management Scope: SFOs can exclusively manage wealth for family members and family-funded charitable organizations.
- Local Incorporation: All SFOs must be registered in Singapore to ensure regulatory oversight.
- Banking Requirements: SFOs must maintain a business relationship with at least one MAS-regulated financial institution, ensuring AML/KYC compliance through established banking mechanisms.
How Does This Impact Singapore’s Family Office Landscape?
By balancing regulatory oversight with operational flexibility, the new framework enhances clarity for SFOs while leveraging Singapore’s banking infrastructure for compliance. Experts believe these measures will bolster Singapore’s reputation as a premier wealth management destination while mitigating financial risks.
With these changes in place, Singapore remains a compelling jurisdiction for family offices looking for regulatory certainty and strategic advantages.
