On closer examination, many business families have established a Family Office as the cornerstone for their multigenerational wealth legacy planning and execution. Equally striking was quite a few of the HNWIs and UHNWIs do not know about Family Offices. Those who know about them were under misunderstanding and were generally not in a position to establish a Family Office that best suits their time, interests, needs, budget, risk profile, and values. Yet others believe that the prerequisites for setting up a Family Office require vastly more wealth, more complexity, and more specialized knowledge than is actually the case. We have extensive cross-cutting knowledge, skills, and experience in the Business Family, Private Wealth Management, Corporate and General Advisory, Investment, Corporate Services, Trust & Estate, and Family Office industry, to disseminate up-to-date and valuable Singapore Family Office information. Our firm specializes in family office set up in Singapore, offering bespoke solutions tailored to your needs.
Understanding Family Offices
Family offices can vary significantly in structure and strategy according to the needs and values of a particular family. Broadly, family offices can be split into two main types. The first is the single family office (SFO), which serves the interest of a single, high net worth family. SFOs are usually set up at the request of the family, often because they are looking to escape the burdens of wealth concentration, and/or because they are in need of a common administrative center for tax, accounting, and financial matters. The second main type of family office is the multi-family office (MFO). An MFO is a commercial entity that family wealth managers are likely to recognize – a wealth management service that supports several high net worth families. Typically, an MFO’s range of services derives from the economies of scale that can be achieved through shared services, pooling resources, multi-family best practice governance and investment process, and advanced technology. Navigating the complexities of a family office Singapore has never been easier with our expert guidance and support.
Regardless of whether the family office has been established for a particular family or multiple families, it takes on a multiplicity of roles and functions to support the family. As aforementioned, family wealth preservation and structuring services continue to be the priority of a family office but the definition has evolved to include several differing outcomes. Now, the safely guarded wealth of the family is soon to be parceled out to several family members and loved ones. The family office must continue to preserve wealth but must also then pivot to concerns of wealth utilization and family governance, transferring those who stand to inherit into worthy stewards of their financial legacy. Social and environmental considerations are increasingly influencing investment decisions, and the next generation, in particular, is concerned with ‘impact investing’ and wealth for good initiatives, looking for their investments to contribute to a better society or environment. A family office can educate and support this growing interest in social investing as it evolves. The existing demands mandate broader personal and emotional services to be rendered to effectively serve the member needs. Thus, the family office needing someone or someone with a team of individuals well versed and practiced in the areas of tax, accounting, financial planning, and portfolio management are necessary. The key is open communication, trust, and a fully defined scope of services, provided in an anticipatory, personal way. We provide comprehensive services for establishing a single family office Singapore, ensuring a seamless and efficient process.
Definition and Purpose
A family office is an investment and administrative center that is organized and overseen by the family. It serves to centralize a wealthy family’s wealth management and financial affairs, such as managing investments, estate administration, tax compliance, philanthropy, and global family governance-related activities. Running a family office is not a new concept. In the past, this requirement was met by information gathering by a team of advisors. Today, a family office arranges and consolidates the activities of a diverse team of professional advisors, such as domestic and international legal advisors, accountants and tax advisors, insurance agents, investment bankers, private bankers, and estate planning professionals, to achieve the family’s specific goals.
As a result, the family maintains a centralized structure for receiving advice and guidance. For some families, a family office is formed after the occasion of a major liquidity event, such as the sale of a successful business. For others, a family office is a way of keeping their wealth among family members and achieving cohesion in the management of their investments and other affairs.
Benefits of Setting Up a Family Office in Singapore
By establishing a family office in Singapore, a global family will benefit from the enhanced reputation of Singapore in the global arena as well as reap the advantages of Singapore’s impartial business surroundings. Singapore’s established infrastructure, business network, financial and wealth administration specialists are designed to offer integrated and advanced family office facilities to global families who either live outside Singapore or are Asia-centric. Singapore’s institute cultivated a robust wealth administration network offering vast industry know-how and an executive, legislative and administration environment that is reliable and created, to promote the expansion of the place of private asset management.
Family offices are private advisory firms established by trading families to control their finance. Their aim is generally to either invest their own wealth or promote wealth for its shareholders by supplying other expert services such as succession preparation, domain management, investment maintenance, accounting administration, tax and legal assistance, and the management of a plethora of associated assistance. There are various groupings for the governance of family offices regarding the advantages being sought by the business household included. Some concentrate on the company, others on preparing, and others on personal wealth planning. There are concerns on single family offices and multi-family offices. The development objectives of the company lead to operational differences. A company that is preparing for life would make vastly separate choices from a firm that seeks to react to a hostile takeover bid.
Key Considerations for Establishing a Family Office
Family offices have grown from being mere status symbols to sophisticated governance and investment platforms. As generational wealth transference becomes more complex, the contemporary family office is increasingly called upon to offer family members a range of critical support and counsel beyond traditional investment services. The family enterprise has needs across various facets such as philanthropy management, estate planning, succession planning, governance management, and legacy preservation. Singapore offers a conducive environment for a family office. There are tax incentives, grants, and talent incentives being offered to incentivize single and multi-family offices to set up in Singapore.
This guide would provide you with an overview of the considerations and requirements on setting up a family office in Singapore. The purpose of this guide is to provide family office leaders and family members intending to establish a single-family or multi-family office or restructure by relocating to Singapore an understanding of the tax and grant incentives. This guide will also address other considerations such as engagement and retaining of professional advisors and solutions. We hope this guide would assist you in making an informed decision and be part of the community of family offices in Singapore.
Conclusion
The flexibility of the regime, the low effective tax rate, and the broad range of services mean that Singapore is an ideal location for a professionally run family office. Setting up a single-family office is more appropriate for a family with a reasonably large fortune to manage, whereas a multi-family office or a boutique single-family office leverages expertise and services provided by seasoned family office professionals. The fact that a large number of the world’s super-rich are looking to set up family offices to manage their investment, succession planning, and risk management requirements, plus the aspirations of the rapidly growing commercial client base in Singapore, who are also seeking similar services, support the continued growth and development of the family office regime in Singapore.
It is clear that wealth engineering is equally, if not more, important than the wealth creation process. The professionally run and organized family office has to form part of the new wealth mentality in this rapidly changing world. The efficiency of the family office and the usage of proper wealth structuring take precedence over the absolute return on investment net of fees, with the long-term preservation of family capital naturally being of prime concern. The delivery needs to be about success that spans across generations. Singapore has put in place a broad church of rules, regulations, and incentives types that have been carefully driven by a well-designed policy and direction for the wealth management industry. The wide range of applicable tax rates and available tax exemptions means that Singapore can easily accommodate all types and levels of family office services.
