News that wealthy families interested in setting up single family offices (SFOs) in Singapore and tapping tax incentives offered by the Monetary Authority of Singapore (MAS) may face tougher checks should not come as a surprise. A key factor behind these moves could have been the recent $2.8 billion money laundering case where investigations suggest that one or more of the accused persons may have links to SFOs awarded tax incentives. The enhanced checks will involve widening due diligence checks conducted at the point of application to a larger group of individuals and entities associated with the SFOs applying for the MAS tax incentives. These checks will be performed by a panel of specialised firms. The MAS will swiftly withdraw tax incentives should subsequent monitoring and events detect adverse activities.

Private family wealth has surged in recent years, both in Asia as well as globally, with Singapore successfully winning a significant share of the pie to manage such assets. As at June 2022, the SFOs that have applied for and been awarded MAS tax incentives employ about 1,400 Singaporeans and permanent residents, according to a July 2023 parliamentary reply. While the SFOs enjoy tax incentives, their activities translate to benefits for the economy through the hiring of investment professionals, and the business spending incurred by the family offices as well as the management of funds and the increased availability of investment capital for local enterprises. All told, the family office segment has played a significant part in building up Singapore’s stature as a wealth management and financial hub.