Patrick Tan

Chief Executive Officer

T: (65) 6645 4500

E: patrick.tan@fortislaw.com.sg

Fortis Law Corporation

24 Raffles Place, #29-05 Clifford Centre, Singapore 048621

T: (65) 6535 8100

F: (65) 6535 3700

E: mail@fortislaw.com.sg

What is a Family Office?

A family office is a private company that manages the day-today administration and management of a family’s financial matters, which would usually include management of the family’s assets and wealth.

Family offices typically handle the following matters on behalf of the family:

• Investments

• Liaison with private banks

• Tax planning

• Property management

• Philanthropic planning

• Family governance

• Succession planning

There are two types of family offices: the single family office or the multi-family office. There are also two ways in which the assets may be held – either in personal name(s) or through a holding company.

In deciding whether to use a family office, there are various factors to be considered. We set out below the advantages and disadvantages of using a family office, as well as brief information on the setting up of a family office in Singapore.

Advantages of Using a Family Office

• Maximises privacy as the family maintains control over their advisors

• Advice received will be more objective if external financial advisers are consulted

• Pooled purchasing power across a family group

Disadvantages of Using a Family Office

• Expensive to operate

• Privacy of the family may be compromised

• Risks of siphoning of family assets

Setting Up a Family Office in Singapore

The setting up of a family office in Singapore is gaining popularity because of Singapore’s attractive tax regime, which includes the following:

• Dividends are tax-exempt

• Interest on monies in banks is tax-exempt if the assets are held in personal name(s) (which is subject to approval by the Monetary Authority of Singapore). However, the interest is taxable if the monies are held in a company’s name

• Capital gains are tax-exempt

• For family office companies, specified income (including trading gains) from designated investments could be tax-exempt if certain guidelines are met

Structuring a family office in Singapore is very much a bespoke exercise. It depends on a range of factors including, inter alia, the size of the family, the amount of assets and the financial objectives of the family. There is no one size that fits all. Family offices are also much easier to set up than trust companies, as the latter requires licences and a considerable amount of paperwork to be executed. Conversely, establishing a family office is similar to the incorporation of an ordinary company and is relatively straightforward. The challenge is to incorporate the company in a manner that meets the specific objectives of the family, and it is here that such families stand to benefit from engaging trusted professional advisors.