Parliamentary Replies
Published Date: 14 February 2023

Oral reply to Parliamentary Question on Family Offices

Date: For Parliament Sitting on 14 February 2023

Name and Constituency of Member of Parliament

Mr Yip Hon Weng, MP, Yio Chu Kang SMC

Question

To ask the Prime Minister (a) whether the Government will consider raising the hiring requirements for family offices beyond two investment professionals and incorporate creation of local jobs as a criterion; (b) how does the Ministry ensure that financial assets held by family offices in Singapore are anchored here; and (c) what is the cost-benefit analysis of the tax benefits provided to family offices in Singapore.

Answer by Mr Alvin Tan, Minister of State, Ministry of Trade and Industry and Ministry of Culture, Community and Youth, and Board member of MAS, on behalf of Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1. The purpose of our tax incentives for single family offices is to provide them certainty that the funds they set up will not be taxed on income derived from investments managed in Singapore. Without such certainty, funds of a single family office may be taxed in Singapore in addition to the tax that the family (as an investor) may be subject to. This would make it unattractive for single family offices to set up and invest in funds in Singapore.

2. To qualify for the tax incentives, applicants must be able to demonstrate their contribution to Singapore’s economy. They must meet minimum requirements on business spending, assets under management, and creating investment professional jobs here.

3. MAS regularly reviews its tax incentives schemes. In April 2022, MAS raised the minimum criteria for single family offices by (i) increasing hiring requirements and (ii) introducing a new requirement for family offices to invest at least 10% or S$10 million of their assets (whichever is lower) in local investments.

4. Single family offices often start with small teams of investment professionals. Hence the more meaningful way to create local jobs is through their positive spillover effects in creating demand for anciliary services like legal, custody and tax services, and fund administration. As elaborated in this House previouslyReply to Parliamentary Question on working with family offices to deepen investments in local companies , government agencies are developing initiatives to tap the growing interest from family offices to provide capital to support enterprise financing, ESG investments, and philanthropic activities.

5. MAS will continue to review the fund tax incentive schemes to ensure that they are relevant and that single family offices can contribute meaningfully to Singapore as they set up their presences here.

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