Singapore’s tax regime is based on a modified territorial system. Unlike jurisdictions that tax residents on their worldwide income, Singapore generally taxes only income sourced within its borders or foreign income remitted to Singapore, subject to conditions. Foreign-sourced dividends, branch profits, and service income received by Singapore tax-resident companies may be exempt if they meet specific requirements, including having been taxed abroad at a headline rate of at least 15% or being derived from substantive economic activities in the source jurisdiction.
For HNWIs, this means that offshore capital gains and investment income can often be kept outside Singapore’s tax net, provided these are not remitted to Singapore or meet exemption conditions when remitted. Moreover, Singapore does not levy any capital gains tax, wealth tax, inheritance or estate tax, making it one of the most tax-efficient jurisdictions globally.
Taxation in practice: Individuals and entities
For individuals, Singapore’s personal income tax is progressive and capped at 24% for income above SGD 1 million per year. The country taxes non-resident individuals at a flat rate of 15% on employment income or the resident progressive rates (whichever is higher). Passive income, such as director fees, is taxed at 24%.
For companies, the headline corporate tax rate is 17%, with exemptions for new startups and partial tax exemptions for SMEs. Most importantly for family offices, income earned from investments in designated financial assets under approved fund structures (explained below) may be fully tax-exempt.
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Singapore as a family office hub: Beyond tax
While tax efficiency is a powerful motivator, Singapore’s appeal goes far deeper:
- Political and economic stability
- World-class infrastructure and connectivity
- Rule of law and robust legal frameworks
- A large and mature financial services ecosystem
- Residency pathways tied to business and investment activities (e.g., via the Global Investor Programme)
These factors create the ideal conditions for establishing and operating a family office, particularly a Single Family Office (SFO), an entity dedicated to managing the wealth and affairs of one family.
Establishing a family office in Singapore
A family office in Singapore typically serves a wide range of functions, including investment management, concierge services, family governance, philanthropic administration, and succession planning. The setup can be customised to include trust structures, holding companies, and charitable foundations, depending on the family’s goals.
From a regulatory standpoint, SFOs are often exempt from fund management licensing requirements under the Securities and Futures Act. This can be achieved either by operating under the “related corporations” exemption or by applying for a licensing exemption with the Monetary Authority of Singapore (MAS).
Key tax incentive schemes for SFOs: Sections 13O and 13U
Singapore outlines its tax incentives for fund vehicles in the Income Tax Act and administered by MAS. Two primary schemes benefit family offices:
Section 13O – Singapore Resident Fund Scheme
- Minimum assets under management (AUM): SGD 20 million
- At least 2 investment professionals, one of whom must be unrelated to the family
- Minimum local business spending of SGD 200,000 – 1 million/year, depending on AUM
- Investments in prescribed Singapore-based assets required (e.g., local equities, REITs, debt instruments, VC/PE funds, ESG-linked assets)
Section 13U – Enhanced-Tier Fund Scheme
- Minimum AUM: SGD 50 million
- At least 3 investment professionals, including one non-family member
- Higher local expenditure requirements (up to SGD 1 million/year)
- Ideal for larger and more complex wealth management structures
Both schemes exempt qualifying funds from tax on income and gains from designated investments. Importantly, these exemptions do not apply to income derived from Singapore real estate or financial instruments indirectly linked to such real estate.
Integration with trust and estate planning
Singapore’s flexible legal environment makes it easy to integrate an SFO into international trust structures. Trusts administered in Singapore can hold investment entities, adding a layer of asset protection and succession planning benefits. Proper structuring can ensure that assets are outside the personal estate of family members, thereby shielding them from estate tax or creditor claims in foreign jurisdictions.
Residency and immigration benefits
Family offices can also support immigration planning. For instance, establishing an SFO may allow the sponsoring of Employment Passes for family members and key staff. Additionally, Singapore’s Global Investor Programme (GIP) offers a path to permanent residency for individuals who commit substantial investments into the local economy, including through a family office.
Compliance and reporting: A transparent yet business-friendly approach
Singapore is fully aligned with international standards on transparency and anti-money laundering, including CRS and FATCA compliance. However, the regulatory burden is generally lower than in Western jurisdictions, and advance tax rulings and APAs are available for those seeking legal certainty.
Importantly, while Singapore has implemented OECD’s Pillar Two rules for large multinational groups, family offices are generally outside the scope of these rules, unless they are part of very large international conglomerates.
Conclusion: A strategic base for generational wealth
With its modified territorial tax system, investor-friendly regulatory framework, and globally respected governance environment, Singapore offers an exceptional base for wealthy families to structure and preserve their wealth. In addition, for families seeking a hub in Asia to manage intergenerational capital, philanthropy, and succession, a Singapore-based family office is not just a tax play; it is a strategic move for long-term legacy.
In a world of increasing complexity, Singapore provides clarity.
