In recent years, Singapore has emerged as a prime destination for establishing family offices, attracting high-net-worth individuals and families from around the globe. With 1,100 family offices established in Singapore as of 2022, the city-state has solidified its reputation as a preferred hub for wealth management and investment activities. But what exactly makes this city-state so appealing for setting up such entities? Let’s delve into the reasons why Singapore could be the perfect choice for you to start your family office journey.
Reasons Why Singapore is an Ideal Destination for Establishing a Family Office
1. Strategic Location and Connectivity:
Singapore’s geographical location at the crossroads of major trade routes in Southeast Asia makes it an unparalleled hub for business incorporation and investment activities. Its well-developed infrastructure, including world-class seaports and Changi Airport, consistently ranked among the best globally, ensures seamless connectivity with markets across Asia and beyond. This accessibility facilitates efficient logistics and enhances trade, making Singapore an attractive choice for businesses looking to expand their reach.
According to the World Bank’s Ease of Doing Business report for 2019, Singapore ranks second globally, highlighting its business-friendly environment and efficient regulatory framework. This recognition underscores Singapore’s commitment to fostering a conducive ecosystem for businesses to thrive, further solidifying its appeal as a premier destination for investment and commerce.
2. Political Stability and Regulatory Environment:
Singapore boasts a stable political climate characterized by sound governance and a transparent legal system. Its strong rule of law and robust regulatory framework provide a safe and secure environment for businesses and investments. This stability instils confidence among investors, contributing to Singapore’s reputation as a trusted financial centre.
The country’s regulatory environment is consistently recognized for its efficiency and effectiveness. In the Global Financial Centres Index (GFCI) for 2023, Singapore was ranked third globally, reflecting its status as a leading global financial hub. This ranking underscores Singapore’s commitment to maintaining regulatory excellence and reinforces its attractiveness as a destination for financial services and investment activities.
3. Taxation Advantages:
Singapore offers attractive tax incentives and a competitive tax regime, making it an ideal location for family offices. With its low corporate tax rates and various tax exemptions and incentives, including the Global Investor Programme (GIP), Singapore provides ample opportunities for optimizing tax planning strategies effectively.
According to the Inland Revenue Authority of Singapore (IRAS), the headline corporate tax rate in Singapore stands at 17%, significantly lower than many other developed economies. This favourable tax regime, coupled with Singapore’s reputation as a transparent and well-regulated jurisdiction, enhances its appeal as a preferred destination for wealth management and investment activities.
4. Wealth Management Expertise:
Singapore has emerged as a prominent wealth management hub, boasting a thriving ecosystem of financial institutions, asset managers, and private banks. The presence of top-tier professionals and advisors with deep expertise in wealth management, investment strategies, and succession planning further strengthens Singapore’s position as an attractive destination for family offices.
According to a report by Deloitte, as of 2020, Singapore ranked fourth globally in terms of assets under management (AUM) in the private banking sector. This underscores the city-state’s reputation as a preferred wealth management destination, offering sophisticated solutions and services tailored to the diverse needs of affluent individuals and families.
5. Access to Talent and Resources:
Singapore’s cosmopolitan environment and highly skilled workforce make it an ideal location for family offices seeking access to top talent. The city-state’s emphasis on education and continuous learning ensures a steady supply of skilled professionals in areas such as finance, law, and technology, supporting the diverse needs of family offices.
According to the IMD World Talent Ranking 2023, Singapore ranked first in Asia for talent competitiveness, underscoring its ability to attract and retain skilled professionals from around the world. This rich talent pool, combined with Singapore’s vibrant business ecosystem and supportive infrastructure, positions the city-state as a preferred destination for family offices looking to build and grow their operations.
6. Government Support and Initiatives:
Singapore’s commitment to fostering the growth of family offices is evident through various government-led initiatives aimed at providing support and building a conducive ecosystem for their development.
The Wealth Management Institute (WMI) plays a crucial role in this endeavour by organizing the Family Office Discovery Series. This onboarding program offers valuable insights into Singapore’s investment and impact ecosystem, equipping family offices with the knowledge and resources needed to navigate the local landscape effectively. By facilitating networking opportunities with peers and providing access to workshops and roundtables covering diverse topics such as private market investments and social impact discovery, the Family Office Discovery Series accelerates capital deployment for co-investment opportunities and meaningful social causes.
Moreover, the Family Office Development Team (FODT), formed jointly by the Economic Development Board (EDB) and the Monetary Authority of Singapore (MAS) in 2019, spearheads initiatives to enhance Singapore’s position as the Global Family Office Hub in Asia. The FODT adopts a three-pillar strategy to achieve this goal:
- Enhancing the operating environment for Family Offices: The FODT focuses on creating a conducive regulatory and operational environment that supports the establishment and growth of family offices in Singapore. By streamlining processes and providing regulatory clarity, the team aims to attract more single-family offices (SFOs) to the city-state.
- Developing capabilities in the financial professional services industry: Recognizing the importance of skilled professionals in servicing the needs of family offices, the FODT works to develop and enhance capabilities within Singapore’s financial professional services industry. This involves providing training, fostering talent development, and promoting best practices to ensure that professionals are well-equipped to cater to the unique requirements of family offices.
- Building a connected Family Office community in Singapore: Collaboration and networking play a vital role in fostering a vibrant family office ecosystem. The FODT facilitates the formation of a connected community of family offices in Singapore, encouraging knowledge-sharing, collaboration, and collective growth. By bringing together industry stakeholders and fostering synergies, the team strengthens Singapore’s position as a preferred destination for family offices.
Through these concerted efforts and initiatives led by the government, Singapore demonstrates its commitment to supporting the growth and development of family offices, further enhancing its appeal as a premier hub for wealth management and investment activities in Asia and beyond.
Conclusion
In conclusion, Singapore offers a compelling proposition for individuals and families considering the establishment of a family office. From its strategic location and stable political environment to its tax advantages and wealth management expertise, Singapore provides the ideal ecosystem for managing and preserving wealth for future generations.
Whether you’re seeking to optimize your tax planning strategies, access global markets, or tap into a pool of top talent, Singapore stands out as a premier destination for establishing your family office.
Furthermore, navigating the complexities of setting up and managing a family office can be daunting. This is where a reputable corporate service provider can be invaluable. These providers offer a range of services tailored to the specific needs of family offices, including company incorporation, regulatory compliance, accounting and bookkeeping, and administrative support. By partnering with a corporate service provider in Singapore, families can leverage their expertise and experience to streamline the establishment and operation of their family office, allowing them to focus on their core objectives of wealth preservation and succession planning.
In essence, with the support of a trusted corporate service provider and the myriad advantages that Singapore offers, establishing a family office in this dynamic city-state can pave the way for long-term financial success and generational prosperity.
