Singapore has become a haven for the ultra-wealthy, providing a secure and dynamic environment for growing and managing fortunes. By the end of 2023, the number of single-family offices (SFOs) in Singapore awarded tax incentives soared to 1,400, marking a 27 per cent increase from the previous year.

Family offices in Asia are expected to double their assets by 2025, and with Singapore housing 59 per cent of these offices, the city-state is at the forefront of this expansion. This presents both opportunities and challenges for family offices navigating a landscape shaped by stringent regulations and evolving policies.

Why family offices choose Singapore

Regulatory environment and political stability

Singapore offers a stable socio-political environment, a free market economy, and a transparent regulatory framework. The Monetary Authority of Singapore (MAS) and the Singapore Economic Development Board (EDB) have formed the Family Office Development Team (FODT) to strengthen the country’s standing as a hub for family offices. This stability and support make Singapore a prime location for managing regional assets and international operations.

Targeted support and tax incentives

The nation provides robust support to family offices through incentives such as the Offshore Fund Exemption Scheme (Section 13D), the Onshore Fund Incentive Scheme (Section 13O), and the Enhanced Tier Tax Incentive Scheme (Section 13U). These incentives allow for the exemption of most investment profits from income tax, enhancing the ability to retain and reinvest earnings.

Strong trade and tax networks

Singapore’s comprehensive network of free trade agreements (FTAs) and double taxation avoidance (DTA) agreements greatly benefit businesses. These agreements facilitate access to preferential markets, reduce import tariffs, and strengthen intellectual property regulations, ensuring efficient operations and strategic advantages due to Singapore’s location within Southeast Asia.

Adapting to changing policies

Recent policy changes by MAS have prompted family offices to invest more purposefully in local enterprises, sustainable development projects, and philanthropy. This alignment with global trends towards impact investing and sustainable finance is reshaping investment strategies, promoting both financial returns and positive social outcomes.

Additionally, the increased scrutiny in approvals for family offices due to concerns over money laundering has added complexity to establishing new family offices.

Tiger Fund Management offers Discretionary Product Management, catering to bespoke investment solutions for high-net-worth accredited investors. One differentiating factor of the strategy is the use of option writing that provides income enhancement for the investment we provide for our clients. The investment strategy is based on macroeconomic and fundamental analysis while leveraging the capabilities of its proprietary artificial intelligence model.

Also Read: Navigating wealth management: The emergence of new family offices in Singapore

One case study is that of Tiger Income Absolute DPM, which focuses on option-writing on Treasury Bond ETFs, which enhances investors’ portfolios of conservative US treasuries and money market equivalent assets.

Tiger Fund Management also launched the Tiger-Yuanta USD Liquidity Fund on 7 Feb 2024, which offers investors exposure to high quality short-term money market instruments which are designed to optimise liquidity, manage risk and achieve returns comparable to USD short-term deposits. The fund’s gross annualised return since inception has been consistent at around 5.4 per cent.

Wealth management with confidence

As family offices navigate these changes, partnering with wealth management services becomes crucial. These firms offer essential expertise and resources:

• Expert guidance: Tailored advice that aligns with the unique goals and risk tolerance of family offices, aiding in informed investment decisions amidst evolving regulations and market conditions.
• Diversified investment strategies: Using comprehensive data to identify key investment trends and opportunities, prioritising diversification and long-term growth to help family offices navigate market volatility.
• Advanced financial tools: Sophisticated tools and platforms offer deep insights into market trends and financial strategies, helping family offices optimise their portfolios and enhance financial efficiency.
• Regulatory compliance: Staying informed about regulatory updates and tax incentive changes is critical. Wealth management firms ensure that family offices remain compliant with local regulations, optimising tax efficiency and reducing potential risks.
• Global market access: Access to a broad array of global markets allows family offices to seize opportunities worldwide, ensuring a diversified and robust investment portfolio.

Stepping into the spotlight

As Singapore continues to emerge as Asia’s premier hub for family offices, understanding the factors driving this rise and the strategies for navigating this landscape is crucial.

By partnering with experienced wealth management professionals, family offices can effectively respond to challenges and capitalise on opportunities, ensuring their long-term success in this dynamic environment.

This proactive approach will not only enhance the growth of individual family offices but also contribute to the continued rise of Singapore as a global wealth management hub.

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