Family Offices Undeterred By Singapore’s More Stringent Rules
SINGAPORE – Extremely affluent families planning to park some of their wealth in the city-state by establishing family offices are undeterred by the tougher rules to qualify for tax breaks, are facing issues on staffing and approvals, reported The Business Times on Thursday afternoon (9 June, SGT).
In April, the Monetary Authority of Singapore (MAS) raised the bar for family offices to be eligible for tax incentives in Singapore. The tougher rules included setting minimum requirements for capital and asset under management (AUM), in addition to local investments.
Nonetheless, industry players revealed that family offices are undeterred in their commitment to operate in Singapore.
Tommy Leung, Co-head of global family and institutional wealth for Asia Pacific at UBS, shared that family offices understand that regulations change along with the needs of a country.
“Frankly, I have not seen any changes in sentiment as a result of these changes in MAS’ requirements. I think most of these family offices are very sensible.”
He told this to reporters after UBS published its third annual Global Family Office Report on Thursday (9 June).
Moreover, Leung disclosed that the city-state’s recent property cooling measures only had a marginal effect on family offices’ aspiration to set up shop in Singapore.
“For a lot of our clients, when they set up a family office in Singapore, their goal is to diversify their wealth out of this region, so to the extent that they decide to make property investments, they tend to cast their net quite wide. They tend to invest globally. So far, I haven’t really seen a lot of impact on any of these family offices, as a result of these cooling measures,” he explained.
However, Leung shared that family offices operating in Singapore could face staffing issues amid the massive growth of the industry in the past few years.
As of the end of 2020, MAS estimates that Singapore had about 400 family offices, and for the first four months of the year, the central bank had approved more than 100 applications from family offices.
Recruiting the right talent for family offices is a challenge with the spike in demand for such professionals, and also because the sector is still relatively new in Singapore. Based on MAS data, the number of family offices here had surged by five times from 2017 to 2019.