Family offices in Singapore will enjoy an extension of tax benefits for another five years. This move will help high-net-worth individuals plan for long-term investments and attract investors interested in long-term investments in Singapore. Despite stricter regulations for setting up family offices over the past two years, the quality of assets has improved. The government has further strengthened its support for family offices in this fiscal year's budget, demonstrating Singapore's commitment to retaining high-quality family offices.
Last Friday's (February 16) budget statement announced some adjustments, including extending the tax benefits under the Income Tax Act's 13D, 13O, and 13U schemes for eligible funds from December 31 this year to December 31, 2029. These benefits include tax-exempt specific investment income and Goods and Services Tax claims for related expenses.
In this round of adjustments, the government also strengthened the 13O scheme by including locally registered limited partnership companies. At the same time, the economic conditions required to meet the 13D, 13O, and 13U schemes were adjusted. These changes will take effect from January 1 next year, and the Monetary Authority of Singapore will announce more details in the third quarter of this year.
Industry players expect the emergence of more long-term-oriented family offices. Over the past two years, Singapore has tightened the conditions for setting up family offices, leading to a decrease in the number of newly established family offices, but at the same time, the quality of local family offices has improved. How the government can further promote the development of family offices, one possible strategy is to allow family offices more flexibility in investment structures.
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