28 May 2022
Singapore has emerged as a key beacon attracting ultra high net worth individuals who are hunting down deals scattered throughout Asia..
Offering a strong regulatory framework, and providing access to a wide range of investment opportunities through various financial institutions, Singapore has attracted, quite literally, some of the Smartest Money in the World selecting Singapore to host their Family Offices, including the likes of Li Ka-shing, Mukesh Ambani, Ray Dalio and James Dyson and Sergey B
For many successful families, a family fund brings more transparency and more efficiency to the financial planning of family wealth. A family office is created to effectively manage the money flowing through the family fund.
Through the Family Office structure, proper and institutionalised structures are put in place to determine how family assets should be recorded, thus ensuring professional management of the family’s future financial interests.
With the Family Office setup, this then allows the families to recruit in-house expertise, and leverage third-party experience in deal sourcing and the related due diligence in when dealing with instruments and marketplaces that may be new to the Leaders of the Family.
The Family Office Setup can be executed in the form of a Single Family Office or a Multi-Family Office.
A typical SFO structure would involve a holding company, or investment vehicles held directly or via a trust, and the family office would serve as the fund manager of the investment vehicles.
Multi-Family Offices will find benefits applying for the Variable Capital Company regime, which offers some tax exemptions, and flexibility in how the fund distributes capital.
There are tax incentives for funds managed by family offices, such that they are exempted from tax on a broad range of income. These include Non-Resident Fund Exemption (13CA), Resident Corporate Fund Exemption (13O, formerly known as 13R) and Enhanced Tier Fund Incentive Schemes (13U, formerly known as 13X). The exemption schemes are currently available until Dec 2024, but as long as the fund is approved for the tax incentive schemes by that date, it can continue to enjoy the exemption for the life of the fund.
How can Leading Edge help?
We are an experienced Fund Adminstration firm who can assist Family Offices and Fund Managers with their compliance requirements in Singapore.
We can provide a comprehensive solution to VCCs in the following ways:
Incorporate VCCs by assisting with structuring and advising from the perspective of tax, legal, regulatory and operational requirements of the VCC.
Assist with VCC drafting policies and procedures and VCC manager compliance.
Assist with fund manager licence application and providing outsourced compliance support.
For more information, please contact us today at Wayne@YourLeadingEdge.Asia.