North Asian families remain at the forefront of Singapore’s family office expansion, even as stricter regulations and a high-profile money laundering case have raised concerns about a potential shift back to Hong Kong.
Singapore had over 2,000 family offices by the end of 2024, with Greater China families still making up the majority of tax incentive applicants, according to industry experts.
Changing Priorities: Beyond Migration to Tax Efficiency
Traditionally, North Asian families have been key drivers of Singapore’s family office sector. However, their motivations are evolving—moving away from migration goals toward tax optimization and asset protection.
Pearlyn Chew, a partner at KPMG Singapore, noted that while tax incentives play a role, stability and asset diversification are more significant factors influencing decisions between Singapore and Hong Kong.
Kylie Luo, executive director at BDO, added that while the proportion of Greater China applicants has declined slightly over the past five years, they still outnumber applicants from other regions. Hong Kong remains geographically convenient, but its family office policies—introduced in 2023—came too late and still carry regulatory ambiguities, she said.
Despite interest in Hong Kong, actual family office setups there remain limited, often focusing on holding local securities rather than broader investment strategies.
A spokesperson for the Monetary Authority of Singapore (MAS) confirmed that most applicants come from the Asia-Pacific region, with some from beyond. Meanwhile, analytics firm Handshakes found that applicants span various industries, including technology, pharmaceuticals, and venture capital.
PwC Singapore also reported strong demand across Asia, particularly from Southeast Asia, Greater China, and South Asia. However, Yi Lee of Stephenson Harwood emphasized that while North Asia has significant wealth, family offices are just one part of a broader strategy that often includes succession planning tools like trusts and wills.
Despite Stricter Oversight, Growth Continues
Singapore’s reputation as a global wealth hub was tested in 2023 when a $2.2 billion money laundering scandal implicated several family offices. In response, MAS introduced tougher oversight, including stricter tax incentive requirements, mandatory private banking relationships, and third-party background checks by firms such as KPMG, PwC, and BDO.
While these measures may have prompted some wealthy Chinese families to explore Hong Kong or Dubai, Singapore still saw 600 new family office applications in 2024—the largest annual increase since MAS began tracking the sector in 2019.
Hong Kong, on the other hand, is working to catch up. Since launching a dedicated family office initiative in 2021, the city has attracted over 140 family offices and aims to reach 200 by 2025, according to InvestHK. UBS Global Wealth Management reported that Hong Kong’s family office inquiries remained steady in 2024 after surging in 2023.
A Shift in Strategy: Testing the Waters Before Committing
With global tax transparency increasing, family offices are placing greater emphasis on tax efficiency rather than migration. Singapore’s stringent residency requirements make it difficult for families to use family offices as a pathway to permanent residency, said Lee of Stephenson Harwood.
Instead, asset diversification has become the primary driver. More families are opting for offshore fund managers rather than setting up full-fledged family offices due to tighter tax rules, according to KPMG’s Chew and PwC’s Anuj Kagalwala.
Kagalwala noted that while the number of new applications has slowed, this is more about post-pandemic recalibration than regulatory deterrence. He added that the family offices that do proceed tend to be larger and more sophisticated in their investment approach.
