The Singapore government is encouraging family offices to make investments in local firms as the city-state gains momentum as a model destination for a growing number of global family offices.
Singapore has become an ideal location for families looking to develop investment opportunities in Southeast Asia as it provides a stable political environment and a supportive regulatory system for private wealth management, coupled with a number of tax incentives.
When questioned in parliament recently on how the government has been working with the ultra-wealthy family offices in Singapore to secure a share of the newly attracted wealth for investment in local companies, Alvin Tan, minister of state for the Ministry of Trade and Industry and the Ministry of Culture, Community and Youth, noted that single family offices (SFOs) applying for tax incentive schemes in the city-state have been required since April of this year to allocate at least 10% or S$10million (US$7.02 million) of their assets (whichever is lower) to local investments.
The local investments eligible include equities listed on Singapore exchanges, private equity investments in unlisted Singapore-incorporated companies or qualifying debt securities.
The Monetary Authority of Singapore and Enterprise Singapore, Tan added, have also set up a number of platforms to connect local companies to potential investors, including family offices. These include Deal Fridays, FinTech Investor sessions, and the Singapore Week of Innovation and Technology. Matchups are also being encouraged during this year’s Singapore Fintech Festival.
As well, he highlighted that the MAS and Economic Development Board have supported the Wealth Management Institute’s Global-Asia Family Office Circle, which aims to encourage family offices established in Singapore to make co-investments in companies as well as develop strategies in areas like philanthropy and sustainable investments.
While these may not result in a direct investment in a local institution, Tan pointed out that a number of family offices have moved to Singapore to access investment and philanthropic opportunities in the broader Asian region, and that overall they add to the city-state’s status as a financial centre.